With energy suppliers set to face tough new finance tests under a regulatory shake-up being considered by UK energy regulator Ofgem, the importance of data analytics and management in ensuring that energy firms remain compliant has been highlighted by data software specialist SAS.
“The stress testing proposed by Ofgem will help to paint an accurate picture of the UK energy sector, particularly in terms of suppliers and their financial health," said head of energy at SAS UK and Ireland, Jennifer Major. “Political uncertainty, a highly volatile market and an ever-changing regulatory environment dominates the current energy landscape and presents a very real risk to smaller suppliers today.
“To offer a clear picture of day-to-day risk exposure and effectively handle any regulatory or economic scenario, energy suppliers need the capability to analyse lots of information very quickly. The onus must be on having multiple data points to give a holistic view of the business, so the best decisions for the business as a whole can be made when reacting to a wide variety of market conditions. This means developing the sophisticated data management and analytical capabilities to enable suppliers to do this.
“It’s not just about compliance with one particular stress test, it’s about taking a proactive approach to resilience testing so that energy suppliers can build up a clearer picture of their day-to-day risk exposure in unpredictable and competitive times. By adopting more frequent stress tests on demand across a wider range of market and customer scenarios, suppliers can proactively manage their future health and robustness.”