July 3, 2025 Georgia Young
Why in-house trading is key to effective energy risk management
In today’s volatile energy landscape, energy risk management has never been more critical. From fluctuating energy prices to supply chain disruptions, there is an ever-increasing challenge when it comes to managing both cost and uncertainty.
That’s why having an in-house energy trading team embedded within our consultancy enables a fully holistic approach to energy risk management.
Energy risk management in the UK market
Energy risk management is the process of identifying, assessing, and mitigating risks associated with energy trading. The influence of geopolitics, infrastructural issues, and climate policy means managing the risks associated with energy trading requires a watchful eye.
We saw the UK energy market experience a surge in prices during 2021, driven by increased demand after the COVID-19 pandemic and supply issues. As the UK had a high reliance on gas, there was greater vulnerability and risk in terms of pricing.
Amber’s in-house Trading and Risk Management team supported one of our long-standing clients, Glamorgan Cricket Club, during this unpredictable time.
“…the advice that was given by your analysts really shaped us through COVID. It protected us through the huge energy spikes and put us on a footing that we could get through COVID successfully and grow moving forwards.” Dan Cherry, CEO of Glamorgan Cricket Club
To learn more about our work with Glamorgan Cricket Club, read our blog [here].
What factors contribute to volatility in the energy market?
Several factors can lead to fluctuations in the price, supply, and demand of energy in the market. For instance, global population growth and changes in weather patterns can significantly affect energy demand and prices. Alongside demand, UK energy supplies also play a crucial role in price volatility. The overall supply of energy can be influenced – both positively and negatively – by factors such as geopolitical events, like the war in Ukraine, which can alter energy availability and costs.
Infrastructural issues are another important factor that can impact energy costs and availability. If essential transmission and distribution infrastructure – such as the power grid – is damaged or inefficient, it can cause bottlenecks and drive up prices.
The role of an in-house trading team in managing energy risk
Working with a consultancy that has its own in-house trading team offers a significant advantage. Our team monitors developments in the energy markets day to day, tracking whether underlying factors such as wind generation, temperature conditions, and gas production are influencing prices. This eagle-eyed approach also includes staying up to date with global affairs that may affect the market.
As a result of this analytical approach, our in-house team can identify opportunities to minimise costs and reduce risk for our clients. Because they work closely with our clients, they are well placed to ensure that the execution of a trading strategy aligns with each client’s specific risk profile and budget constraints.
By working with a consultancy that has an in-house trading team, it’s possible to align trading decisions with each client’s bespoke risk strategy – something not feasible through a third party or broker – ensuring serious energy risk management throughout the entire process.
How can Amber help?
We specialise in recommending and delivering the right energy risk management strategy for our clients. Please get in touch to find out how we can support you.
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