Fundamentals of Energy Statistical Analysis
Companies continue to be exposed to significant energy and electricity related price risk, and this risk needs to be properly quantified. Energy and electricity companies worldwide depend on accurate information about the risks and opportunities facing day to day decisions. Statistical analysis is frequently misapplied and many companies find that "a little bit of knowledge is a dangerous thing."
Operational decisions, capital investment, risk management, strategic positioning, litigation, and marketing are some of the many areas that require accurate information and analysis founded on sound statistical principles. This comprehensive two-day program is designed to provide a solid understanding of key statistical and analytic tools used in the energy and electric power markets. Be armed with the tools and methods needed to properly analyze and measure data to reduce risk and increase earnings for your organization.
- Correlation & regression analysis; real option analysis; the Black-Scholes option pricing model; binomial trees; GARCH Models; the measurement of energy price risk; and how to use correlation and regression analysis for maintaining a competitive edge.
- How to minimize price risk through operational design Flexibility; measure forward price volatility and adapt Value-at-Risk concepts (VaR) for the Energy Industry.
- Use actual case studies to examine 1) how Monte Carlo simulation is used to value Demand Response programs; 2) benchmarking techniques used for estimating the incremental cost savings of expanding existing operations; and 3) real-option value of generation assets.
DAY ONE:
The Basics of Deterministic vs. Probabilistic Thinking in Deregulated Markets (2.0 hours)
Means vs. Standard Deviations
Distribution Shapes
Confidence Intervals
Probability
Simulation
Application: Setting up a Monte Carlo Simulation
Example 1-Confidence Intervals for Calculating Value at Risk - VaR
Example 2-Customer Migration Model Estimating Migration out of Standard Offer Service in a Deregulated Retail Electricity Market
Correlation and Regression Analysis for Maintaining the Competitive Edge (2.0 hours)
Univariate and Multivariate Analysis
Hypotheses Testing
Testing for Equal Means and Variances
Control Charts
Application: Benchmarking to Industry Standards
Example 1-Comparing O&M Expenditure to that of Peer Facilities
Example 2- Estimating the "Economies of Scale" (marginal cost reduction) Associated with Multiple Unit Generation Facilities
The Energy Forecasting Toolbox (2 hours)
Historical Trend Analysis
Univariate Time Series
Multivariate Time Series
Econometric Models
Bayesian Estimation
End-Use Models
Engineering or Process Models
Optimization
Network Models
Simulation
Game Theory
Scenarios
Surveys
DAY TWO:
Time Series Step-by-Step (2hours)
Time Plots
Adjusting for Stationarity
Logarithmic Transformation
Differencing
Correlation and Partial Correlation Functions
Model Specification and Selection
ARMA Models
Estimated Parameters and Standard Errors
Testing for White Noise
Heteroskedasticity
Autocorrelation
Forecasting Future Values
Additional Seasonality Considerations
Example 1-Statistical Reports that everyone can understand
Introduction to Real Options Analysis (2 hours)
Details of Option Model Implementation
Black-Scholes, Binomial Trees, and GARCH Models
Application: Real Option Valuation
Example of Valuing The Option of Real-Time Forward Load Reduction
Estimating Volatility and Uncertainty In Historical Prices
Measuring Forward Volatility
Adapting Value-at-Risk (VaR) for the Energy Industry
Application: Optimal Hedging using Statistical Triggers
Application: Minimizing Price Risk through Operational Design Flexibility
Example 1- Valuing Combustion Turbines using Real Options
Example 2- Valuing Gas Storage using Real Options
Dr. Skinner is a Vice President for Integral Analytics Inc. (IA), an energy conservation focused analytical planning software and consulting firm. IA is fully owned by Willdan, an industry-leading energy solutions provider and sustainability consultant. Dr. Skinner supports core energy risk management and sustainability services including electric grid optimization, integrated resource planning, design and implementation of integrated demand side projects and distributed energy resources. He is part of a team specializing in energy engineering, renewable generation, electric vehicle fleets and infrastructure, program management, microgrids, financing, data analysis, software development, and other fields. Dr. Skinner has over 20 years of energy industry experience developing energy conservation and commodity supply strategies involving portfolio risk management, hedging strategies, and least-cost supply opportunities. Having worked as an energy consultant, Dr. Skinner has significant experience in economic analysis and modeling of distributed energy projects, forward energy prices, financial derivatives, and valuation of energy assets using econometric analysis, statistical methods, optimization principles, real option valuation techniques. Dr. Skinner is widely published having served as the technology columnist for Wiley Natural Gas and Electricity Journal. He is a noted speaker on energy related topics for organizations such as AESP, IAEE, ACEEE, PLMA, IEPEC, INFORMS, Infocast, EUCI, SNL Energy and PGS Energy Training.
The price for this comprehensive two-day seminar is $1,595 (USD).
Register online or call (843) 212-4038.
- Government and university employees receive a 10% discount (check the box when you register).
- Register 4 or more attendees and receive 20% off. Special pricing is available for groups of 5 or more. Call (843) 212-4038 for assistance.
Payment is due prior to the start of the seminar by Visa, Master Card, American Express, or corporate check. Seminar fees are charged at the time of registration unless other arrangements have been made. Checks payable to “PGS Energy Training,” 26 Teal Lane, Hilton Head Island, SC 29926. Cancellations result in a credit good for 2 years, transferable to a colleague. Substitutions may be made at any time. For more on PGS policies, contact our offices at (843) 212-4038.
This live group seminar is eligible for 11.0 CPE credits in Specialized Knowledge. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit.
As of January 1, 2002, sponsored learning activities are measured by program length, with one 50-minute period equal to one CPE credit. One-half CPE credit increments (equal to 25 minutes) are permitted after the first credit has been earned in a given learning activity. You may want to verify that the state board from which your participants will be receiving credit accepts one-half credits.
PGS is a NASBA-registered CPE sponsor and a GARP-approved CPD provider, so see accreditation details.