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The global energy sector is increasingly exposed to unpredicatble weather. Wind droughts and extreme temperatures can create massive financial instability. How do renewables that rely on an ever increasingly hard to predict energy source - manage the risk that the sun might not shine, and the wind might not blow?
This episode demystifies the multi-billion-pound market of weather derivatives, exploring how energy utilities, renewable asset owners, and battery optimisers use these customised structured products - using signals like Heating Degree Days, wind speeds, or precipitation to effectively transfer operational risk
Key topics covered:
- How thus multi-billion-pound market operates almost entirely out of sight.
- How a single wind drought drained €1.6 billion from Germany’s energy system - highlighting why hedging renewable-generation risk has become mission-critical.
- The financial “Lego bricks” that allow traders to build bespoke weather protection.
- Why battery owners must hedge against boring weather and how low-volatility conditions could quietly erode their revenues.
- Why financiers are insisting on weather insurance before funding new renewable assets.
About our guests
Theresa Kammel - Weather Derivative Originator and Pierre Buisson - Senior Structurer, Weather and Energy work at Munich Re, one of the world’s leading providers of reinsurance, primary insurance and insurance-related risk solutions. Munich Re is also playing a key role in driving forward the digital transformation of the insurance industry. For more information, head to their website. https://www.munichre.com/en.html
About Modo Energy
Modo Energy helps the owners, operators, builders, and financiers of battery energy storage understand the market - and make the most out of their assets.
All episodes of Transmission are available to watch or listen to on the Modo Energy site. To stay up to date with our analysis, research, data visualisations, live events, and conversations, follow us on LinkedIn. Explore The Energy Academy, our bite-sized video series explaining how power markets work.
