The Volatility Package extends our NEM Fundamentals package, converting a single central price forecast into a comprehensive distribution of possible outcomes. To build that distribution, we model 13 weather reference years across 5 demand scales and run each combination through our central, high and low scenarios, generating a broad set of sensitivities for every case.
This gives market participants a probabilistic view of the market, one that captures the full spread of conditions from high-renewable, low-price periods to low-generation, high-price events. It forms the basis for robust risk management, letting clients stress-test their portfolios against an increasingly weather-dependent system and the uncertainty surrounding demand forecasts.