Energy Risk Measurement
From Open Risk Manual
Contents
Definition
Energy Risk Measurement (also Energy Risk Quantification) is any activity aiming to quantify (produce numerical measures) for the Energy Risk faced by an organization. The risk types in scope for measurement are normally thought to have been isolated in the Energy Risk Identification process that logically precedes Risk Measurement.
Measurement aims to produce a rational, optimized approach towards Energy Risk Mitigation.
Measurement Approaches
Depending on the energy risk sub-type being measured, there is a variety of quantification methodologies and tools.
- Nature of the energy risk factors (their dynamics, timescale, volatility etc.)
- Nature and range of impacts (their probability distribution)
Quantification Dimensions
- Probability and severity of an energy event
- Term structure of energy event risks
Issues and Challenges
- Non-Quantifiable Energy Risk. Some risk events might be by nature too difficult to quantify in a reliable manner.
See Also
References
