Advisory firm of the year, Asia: Baringa Partners

Energy Risk Asia Awards 2020: Baringa registers 50% growth in Apac clients and expands regional power price forecasting model

Brynne Parker

Over the past year, Baringa Partners has registered more than 50% growth in client numbers in the Asia-Pacific region and has increased headcount at both its Apac offices. And this is just the start of its ambitions for Asia. Brynne Parker, a partner in the consultancy’s energy trading and commodity practice who leads the Singapore business, says the firm is planning to double its existing teams in Singapore and Sydney, Australia, over the next two to three years and expand its offering into more Asian countries.

“Baringa is a growth business and we are looking to now grow into new markets and take the culture and the differentiation we have as a consultancy to those markets,” he says.

Parker attributes this culture to the firm’s use of market specialists – “geeks” as he calls them – many of whom have decades of experience in the market. “We give our clients really senior, experienced people to work with,” he says. “Our senior project leads have all been in this business for a very long time.” Parker has been working with energy and commodity trading companies as a consultant for 20 years.

Peter Sherry

Having long-standing experience is extremely useful in today’s challenging marketplace as is the ability to adapt quickly to new situations and risks. Much of Baringa’s work in 2020 has involved helping clients form new strategies and techniques that will enable them to navigate today’s new landscape, while quickly adapting their own business model and offerings.

At the start of this year, for example, the firm was working with an integrated energy player in the Apac region to build a commodities trading and risk management function from scratch. When a national lockdown was imposed in Singapore to limit the spread of Covid-19, the team was forced to complete the trickiest part of the project remotely.

“We had already helped this client to select a trading system and designed it and then we went into lockdown,” Parker recounts. Baringa’s Singapore team then had to take the client’s traders live for the first time on a new system to start trading in a new business area – all remotely.

“I am extremely grateful to the team who not only guided us to a successful go-live during the Covid-19 circuit breaker period, but also made sure this was done to a high degree of quality,” the energy firm’s head of trading says. The company has now engaged Baringa for a critical project in the UK.

As well as the abrupt change brought about by Covid, energy fims are also grappling with the longer term shift away from fossil fuels. Helping clients to navigate this will underpin much of Baringa’s work going forward, says Parker. The effects of the energy transition are being felt particularly keenly in the power sector and Baringa has ramped up resources here too, increasing headcount in its Sydney-based power markets advisory four-fold since January 2019. The business, led by Peter Sherry, a partner, provides in-depth analysis of power markets, including a wholesale power price projection model.

“These power market reference cases are core to our offering, both in Europe and now in Apac,” says Sherry. “Our team of quantitative experts builds models of electricity markets to project future power prices, using key inputs such as demand, current and planned generation, storage, policy and market design, and network capacity constraints.”

Clients use the models to build a case for asset purchases or new projects, for example, or when negotiating power purchase agreements. Sherry says more than 20 lenders in the Apac region have used the projections to finance new projects since the start of 2019, supporting more than three gigawatts of new-build renewables deals. The models, which currently cover Australia and 15 countries in Europe, are now being developed for Thailand, Vietnam and the Philippines, says Sherry.