Energy Market Advisory: Optimizing Cost & Risk

Energy Market Advisory: Optimizing Cost & Risk

ERM helps organizations cut through the complexity surrounding energy solutions. We work with clients to identify the best-fit contracting solutions that will help them meet their decarbonization and energy goals while managing risks and optimizing economic outcomes.  

Mitigating costs and risks in increasingly volatile commodity markets

Switching to clean energy is a cost-effective and impactful pathway to achieving climate goals at a time when sustainability leaders are facing tight deadlines related to public climate change commitments.

Clean energy represents a major departure from traditional electricity procurement and risk management practices and can present unique risks. Both traditional and clean energy should be contemplated and managed together to unlock hidden value – including cost savings and long-term risk mitigation through appropriate hedging strategies within energy portfolios. Energy buyers must navigate the needs and risk tolerance of internal stakeholders, and the challenges associated with complex contracts, including power purchase agreements, retail and wholesale energy, and environmental commodities. 

Not all products offered by clean energy developers, utilities, or other suppliers are the same. Risk allocation between the buyer, the load-serving entity/electricity retailer, and the renewable energy generator varies, as does the related pricing mechanism.

The market is complex and competitive. Identifying the best-fit energy options, negotiating bespoke contracts, and striking the right balance between price and risk, requires savvy negotiation skills, advanced risk management experience, analytical capabilities and market intelligence.

Fast-track your energy transition by implementing a robust and forward-looking procurement and contracting approach optimized for rapidly evolving energy markets

Define and communicate strategic goals

Internal misalignment and a lack of strategic buy-in hampers success. Our experts support stakeholder engagement and organizational change management, at the outset and throughout strategy and implementation efforts, to enable successful project execution.

Access tailored and independent advice

We help clients objectively assess all available energy solution options, including retail power and gas, green tariffs, virtual power purchase agreements, structured products, community energy and storage arrangements, unique energy risk management contracts, and behind-the-meter energy and storage initiatives, while maintaining independence and transparency. Our advice is tailored to each client's risk tolerance and operational capabilities.

Manage cost & risk and avoid pitfalls

We assess key sources of cost and risk – such as portfolio construction, price, volume, shape risks, market volatility, project delays, asset performance, and counterparty risk – and recommend targeted mitigants in contract negotiations and broader investment decisions. Illustrative approaches include risk diversification, mixing short- and long-term hedging instruments, time-to-market risk management, implementing behind-the-meter flexible demand solutions, and built-in optionality in contracts. Our approach focuses on securing optimal terms at competitive prices.

Why partner with ERM for Energy Procurement & Risk Management

Comprehensive market intelligence and regulatory guidance

Forward-looking guidance

Robust quantitative risk analytics informing practical hedging decisions

Cutting edge energy risk management and hedging framework

Product and contract design process tailored to your risk tolerance

Economic and financial modelling

Technical and commercial due diligence (project development and counterparty)

Contract negotiation and ongoing performance management support

Stakeholder engagement

Licensed to provide advice on regulated financial energy derivatives and various carbon products

Outcomes

Unlock financial savings opportunities on both individual contracts and your broader energy portfolio

Reduce financial risk in increasingly volatile commodities and pivot in response to the market as needed

Contribute to decarbonization targets

Build more sustainable business models

Secure stakeholder trust

Our partnerships

ERM has an ever-expanding ecosystem of partners across each key area of the energy value chain, enabling us to meet our clients’ evolving needs and scale our impact.

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ERM in numbers

Our experience and insights are cross-industry and on a global scale

+700

nature projects worked on in 50+ countries in FY25

$1.5bn

in capital investments to meet carbon emission reduction targets

8,000+ 

people across 44 countries globally

Insights

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Projects

How we've helped global businesses from vision to implementation

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ERM Australia Sustainability Pty Ltd (ABN 67 001 204 039) (formerly Energetics Pty Ltd), trading as “ERM Energetics” is authorised to provide financial product advice to wholesale clients and to deal in derivatives and various other products including carbon units, Australian Carbon Credit Units, Safeguard Mechanism Credit Units and regulated international emissions units under the Corporations Act 2001, Australian Financial Services License (# 329935).