FEA @ENERGY/Power Generation 2.0 Offers More Accurate Power
Plant Optimization, Risk Exposure Assessment & Valuation Tool
HOUSTON, Texas - Energy Risk USA Conference - May 18, 2004
- Financial Engineering Associates, Inc., a wholly-owned subsidiary
of Barra, Inc. (Nasdaq: BARZ), and a leading developer of derivative
pricing and risk management technologies for the energy and
commodities industries, today announced @ENERGY®/Power Generation
2.0 for power plant optimization, risk exposure assessment and
valuation. In the current energy market environment, imprecise
calculation of power generation exposures can cause participants
to have their credit rating downgraded and force them to take
significant write-offs. To address these challenging market
conditions, FEA has enhanced this module to include more accurate
pricing models and added functionality that help independent
power producers, power marketers, and energy hedge funds better
understand the risks in their portfolios.
"In order to extract the optimal value implicit in a power
generation asset, sophisticated asset managers implement a dynamic
hedging program in which the hedges reflect both the physical
operating constraints of the asset and realistic price processes,"
said Frank Cummings, president for FEA. "By providing realistic
stochastic price process models and modeling physical operational
constraints using a real options framework, @ENERGY/Power Generation
now provides a more accurate valuation of power generation assets
and tolling agreements available to all asset managers."
New features enhance energy risk analysis and management Included
in @ENERGY/Power Generation 2.0 are more accurate, flexible,
and customizable risk analysis, pricing and valuation features
such as:
-
Increased accuracy - Unlike most existing tools that use
an approximate, simple spread option model that is highly
sensitive to numerous calibration parameters, @ENERGY/Power
Generation realistically models physical inputs and computes
accurate and stable results;
-
Enhanced pricing modules - A separately licensed sub-module
GenExp has been added to the @ENERGY/Power Generation product.
This allows valuation using the 1-factor price process model,
the new 2-factor mean-reverting price process model, as well
as externally generated price scenarios;
-
User-defined scenarios - Valuation and outage scenarios
may be performed based on simulations stored in file, allowing
input of user-supplied scenarios generated by independent
models.
@ENERGY/Power Generation 2.0 incorporates physical constraints such as ramping time, shutdown time, and minimum on and off times. Additionally, these tools realistically model operational efficiencies, constraints, and costs directly.
Availability
@ENERGY/Power Generation 2.0 is available today through FEA as a Microsoft Excel add-in. For more information, visit www.fea.com or call 1+ (510) 549-8702. Come visit FEA at the Energy Risk USA tradeshow in Houston, Texas on May 18 & 19, 2004, on the first level of the show floor, Discovery.
About FEA
Focusing on the energy, financial, and commodities markets since 1989, Financial Engineering Associates, Inc., a wholly-owned subsidiary of Barra, Inc., is renowned for the development of option valuation models and market risk assessment software. Powered by constant innovation, aggressive release schedules, and superb technical support, FEA is routinely first-to-market with pricing models and authoritative risk management tools for the latest, most complex financial instruments. FEA is used at more than 700 sites by institutional clients that include: energy firms, money center banks, Fortune 500 companies, trading enterprises, and leading financial firms worldwide. FEA remains at the forefront of financial engineering through an ongoing commitment to meeting the needs of its clients worldwide. For more information, please visit http://www.fea.com.
@ENERGY is a registered trademark of Financial Engineering Associates, Inc.
