Arbol Energy

Weather risk management for energy markets.

Arbol provides risk capacity to participants in the energy market through sophisticated weather derivatives. We structure, price, and transact derivatives with energy market participants, offering them the opportunity to transfer weather risks from their books to our portfolio.

Utilizing station observations and gridded ERA5 wind, solar irradiance, and precipitation data, we construct time series to provide underlying indices for hedging products tailored to the energy industry. Our structures can be traded at any global location and on any tenor, minimizing basis risk and providing comprehensive protection against weather-related challenges in the energy sector.

Energy Products

Comprehensive solutions for energy businesses.

Temperature-Based Derivatives

Manage financial exposure to temperature fluctuations affecting energy demand and production.
Key Features
  • Custom indices based on Heating Degree Days (HDDs), Cooling Degree Days (CDDs), or critical temperature thresholds
  • Utilizes data from established meteorological sources
  • Structures include swaps, options, and collars
Use Cases
  • Utilities hedging winter heating or summer cooling demand
  • Power generators managing temperature-related production risks

Wind Generation Derivatives

Transfer financial risks stemming from variable wind power generation.
Key Features
  • Indices based on wind speed or actual generation output
  • Solutions for both onshore and offshore wind projects
  • Can be combined with temperature indices for full protection
Use Cases
  • Wind farm operators hedging production volatility
  • Energy trading desks managing wind power positions
  • Utilities with significant wind power in their generation mix

Solar Irradiance Derivatives

Mitigate financial exposure to variable solar power generation.
Key Features
  • Indices based on solar irradiance levels or actual generation output
  • Can be combined with temperature indices
  • Customizable for different geographic locations and seasons
Use Cases
  • Solar farm operators hedging production risks
  • Utilities managing solar power in their energy mix
  • Energy traders with exposure to solar generation
Key Benefits

Why choose Arbol for Energy Risk Management?

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Custom Structuring

Tailored products to match your specific energy market risks.

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Rapid Pricing

Quick quotes and setup for timely risk management.

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Easy Payouts

Transparent process using trusted third-party data.

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Global Coverage

Derivatives for energy businesses worldwide.

Frequently Asked Questions

Explore our FAQ to learn how Arbol leverages technology for parametric insurance, managing climate risks effectively for diverse industries.

What types of weather risks can Arbol’s energy solutions cover?

Arbol’s energy solutions cover a wide range of weather-related risks, including:

  • Temperature fluctuations affecting energy demand
  • Wind speed variations impacting wind power generation
  • Solar irradiance levels affecting solar power output
  • Precipitation and river levels influencing hydroelectric power
  • Load variations due to weather conditions Our customizable solutions can be tailored to address specific weather risks faced by different energy businesses.
How do parametric energy solutions differ fromtraditional energy insurance?

Unlike traditional insurance, which requires loss assessments and can lead to lengthy claim processes, Arbol's parametric solutions use predefined weather-related triggers based on objective data. This results in:

  • Faster payouts, often within days of the triggering event
  • No need for loss adjusters or complex claims processes
  • Greater transparency and predictability in risk management
  • Ability to cover risks that may be difficult to insure traditionally
Can Arbol’s solutions be integrated with our existing risk management strategies?

Yes, Arbol’s parametric solutions are designed to complement existing risk management strategies. They can be used to:

  • Fill gaps in traditional insurance coverage
  • Provide an additional layer of protection for specific weather risks
  • Offer coverage for previously uninsurable weather-related events
  • Predictable financial planning for insured parties

We work closely with clients to ensure our solutions integrate seamlessly with their overall risk management approach.

How quickly can we receive payouts if a weather event triggers our policy?

One of the key advantages of Arbol's parametric solutions is the speed of payouts. Once a triggering event occurs and is verified by the agreed-upon data source:

  • Payouts are typically processed within days
  • No claims adjusters or lengthy investigations are required
  • Funds can be quickly available to address immediate financial needs. This rapid payout process helps energy businesses maintain cash flow and operational stability in the face of weather-related disruptions.
Are Arbol’s energy solutions suitable for renewable energy projects?

Absolutely. Arbol’s solutions are particularly well-suited for renewable energy projects, which are often highly sensitive to weather conditions. We offer:

  • Wind speed solutions for both onshore and offshore wind farms
  • Solar irradiance protection for solar power installations
  • Combined solutions that account for multiple weather factors
  • Customizable triggers to match the specific characteristics of each renewable energy project

Our solutions help renewable energy operators manage the inherent weather-related volatility in their power generation, supporting the stability and growth of the renewable energy sector.

Product Pricing Request

Are you interested in our products and want to request pricing tailored to your needs? Fill out our form and our team will provide you with a personalized quote.

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Arbol Insurance

Visit our insurance underwriting and brokerage firm that specializes in parametric solutions focusing on hard-to-place weather risks.

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