2025, Vol. 6, Issue 2, Part E
Renewable energy price risk management: Hedging approaches using derivatives and energy swaps
Author(s): Isaac M Mankilik and Silas A Ihedioha
Abstract: This study develops and analyzes quantitative models for risk management in the context of renewable energy price volatility. It examines the deployment of forward contracts, futures contracts, options, and energy swaps as hedging instruments to mitigate financial exposure arising from market fluctuations. For each instrument, the paper formulates rigorous mathematical models, derives analytical solutions, and conducts an in-depth evaluation of hedging performance. Numerical simulations are employed to illustrate practical implementation, demonstrating the capacity of these strategies to enhance market stability and reduce price uncertainty in renewable energy systems.
DOI: https://doi.org/10.22271/math.2025.v6.i2e.271
Pages: 739-750 | Views: 91 | Downloads: 40
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How to cite this article:
Isaac M Mankilik and Silas A Ihedioha. Renewable energy price risk management: Hedging approaches using derivatives and energy swaps. Journal of Mathematical Problems, Equations and Statistics. 2025; 6(2): 739-750. DOI: 10.22271/math.2025.v6.i2e.271
