Transmission Trading the weather: Inside energy’s new derivatives market with Theresa Kammel & Pierre Buisson (Munich Re)
Dec 18, 2025
Theresa Kammel, a Weather Derivative Originator at Munich Re, and Pierre Buisson, a Senior Structurer, dive into the dynamic world of weather derivatives. They reveal how energy markets hedge against unpredictable weather, like a single wind drought costing Germany €1.6 billion. The duo explains bespoke weather-linked products that help traders manage risks and outlines the necessity for battery owners to hedge against low-volatility conditions. They further discuss the emerging need for long-term weather hedges as climate change adds a layer of uncertainty.
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Weather As Central Energy Input
- In a renewables-led grid weather becomes the primary input driving generation and price.
- That shifts weather from context to core balance-sheet risk for energy businesses.
Match Index To Your Asset
- Identify a representative weather station or index that matches your asset footprint before hedging.
- Quantify historical exposure and then ask a provider to price transferring that risk.
Derivatives Built From Simple Pieces
- Weather derivatives are modular 'Lego bricks' built from standard option and swap pieces.
- You can buy options (premiums) or swaps (no upfront premium) to suit cashflow preferences.