Vattenfall offers new services to hedge weather risks

Vattenfall offers new services to hedge weather risks The vagaries of the weather can cost money. It may be in the interests of companies, organisations and private individuals to insure themselves against the effects of unexpected weather. Vattenfall has therefore started to offer weather derivative products to its customers on the Nordic market allowing them to hedge weather related risks. It is well known that the weather is an important economic factor. A cold summer can mean bankruptcy to an ice-cream manufacturer, while a mild winter may entail a fall in sales for a heat company. A sustained dry period can destroy a farmer's crops, while persistent rain may spell disaster for a concert tour. As a power company with a considerable proportion of hydro power, Vattenfall has a lot of experience of calculations and forecasts covering variations in temperature and precipitation both locally and over large geographical areas. This expertise forms the basis for a new product, Weather Derivatives, which is now being launched. The service is aimed at companies and other customers in the Nordic region who may have an interest in protecting themselves against the vagaries of the weather. In Vattenfall, a team of four is working with weather risks. Risk control and risk management systems have been implanted. "Providing companies and other customers with a means of protecting themselves against such risks also provides a business opportunity for us. The scheme will comprise a payment structure linked to a weather factor that can be clearly defined and measured, temperature for example," says Markus Hartwig, Head of Weather Risk Management at Vattenfall's Business Unit Supply & Trading. Markus Hartwig and Claude Unge from Vattenfall are two of the main speakers at the fifth European meeting of the Weather Risk Management Association, which is being held on 17 and 18 September in Stockholm. From Vattenfall's Press Office, telephone: +46 8 739 50 10. For more information, please contact: Markus Hartwig, Vattenfall Supply & Trading, telephone: +46-8-739 57 47. Martin May, Head of Group Media Relations, telephone: +46-8-739 52 70 ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2003/09/18/20030918BIT00150/wkr0001.doc http://www.waymaker.net/bitonline/2003/09/18/20030918BIT00150/wkr0002.pdf