Risk management of energy companies’ sustainable development

Students Name: Ulmer Diana Romanivna
Qualification Level: master (ESP)
Speciality: Economics
Institute: Institute of Economics and Management
Mode of Study: full
Academic Year: 2019-2020 н.р.
Language of Defence: ukrainian
Abstract: Ulmer D.D., Kryvtsun I.M. (supervisor). Risk management of energy companies’ sustainable development. Master’s thesis. –Lviv Polytechnic National University. Lviv, 2020. Extended abstract Sustainable development of energy enterprises is the key to the country’s energy security. A number of man-made disasters and energy crises in the past have increased the role of risk management of energy companies. Modern vectors of development of the energy sector set the provisions of the concept and the developed Sustainable Development Goals, which provide for the implementation of tasks within a certain goal and the achievement of which is fixed by the relevant indicators. In particular, 7 Goal "Affordable and Clean Energy", 9 Goal "Industry, Innovation and Infrastructure" and 12 Goal "Responsible Consumption" are related to energy. They define the activities and interactions of all energy market participants in such a way as to reduce the burden on the environment, rationally use natural resources and minimize global environmental, technological and man-made risks. To achieve this goal in the master’s qualification work the following tasks are solved: to study the impact of the SDG on the reform of the country’s energy sector; to consider the structure of Ukraine’s energy resources; to describe the risk factors of a modern energy company; to analyze the current state and consider the structure of the energy sector; to analyze the financial performance of PJSC Lvivoblenergo in order to assess risks; to systematize the risks of PJSC Lvivoblenergo; to consider modern approaches to risk assessment in the energy sector; to assess the systemic and specific level of risk of the energy enterprise; to consider the general approach for managing operational and actuarial risks of the enterprise; to analyze the possibilities of using data mining in the risk management of the energy company; to develop recommendations for protection against operational risks; to develop measures to insure actuarial risks of the enterprise. The following research methods were used in the master’s thesis: methods of critical analysis in the course of elaboration of literature sources on the characteristics of modern risk factors in energy; systematization - in the classification of risks, the characteristics of energy resources, classification and development of risk management measures; comparison - for assessing systemic and specific risk in the energy sector; synthesis method - in the study of the impact of SDG on the development of the energy sector and risk management of energy sector enterprises. The risks of energy market participants should be systematized in accordance with the SDGs, as among the 17 goals are those that directly or indirectly affect the activities and interaction of participants in this market segment (Table 1). Table 1 Systematization of risks of energy companies SDG Risk-factors 7 Goal - Affordable and clean energy Environmental risks Risks associated with government regulation of the market 9 Goal - Innovation and infrastructure Innovative risks Cyber risks 12 Goal - Responsible consumption Procrastination with the introduction of energy-saving technologies and renewable energy sources 15 Objective - Conservation of terrestrial ecosystems Harmful emissions into the environment Environmental risks Specific or sectoral risk (table 2)can be assessed by comparing the key performance indicators of domestic energy companies with similar indicators of other companies operating in the national market, but in other sectors of the economy. Component specific risk factors can also be assessed by comparing performance indicators, such as profitability and financial stability, of domestic energy companies such as CHPP, TPP, NPP, HPP, WPP or SPP. Table 2 Systematization of risks of energy companies Sign of classification Types of risk Coverage level Country risk (systematic risk) Energy industry risk (specific risk) The risk of an individual energy company Possibility of insurance Actuarial risks Non-actuarial risks The scope of risks in the enterprise Operational risks Financial risks Commercial risks Environmental risks Cyber risks Market risks . The recommendation part of the Master-s work proposes the following risk management measures in the activities of PJSC Lvivoblenergo: • Risk insurance; • Protection against operational risks and cyber threats; • Application of data mining decision-making in risk-management. The purpose of the master’s qualification work is to substantiate a set of risk management measures for sustainable development of PJSC Lvivoblenergo. The object of research is the process of managing financial, operational and actuarial risks of the energy enterprise. The subject of the research is methodical and applied approaches to improving risk management of PJSC Lvivoblenergo. The scientific novelty of the study is to systematize the risks of energy market participants in accordance with the SDG and to assess the systematic and specific risk of the energy company. Key words: Sustainable Development Goals, risk management, specific risk, systematic risk, risks of energy companies. References. Kononenko O. Actual problems of sustainable development: textbook -K .: SE "Print Service", 2016. -109 p. Kryvtsun I.M. Risk management on the basis of preventive and compensatory measures: dis. … Cand. econ. Science: 08.06.01. Lviv, 2005. 164 p. Operational Risk Management. URL: https://www.managementsolutions.com/sites/default/files/publicaciones/eng/operational-risk-energy.pdf SDG Compass: Посібник для досягнення ЦСР в бізнесі/ URL: https://sdgcompass.org/wpcontent/uploads/2016/09/sdg_compass_guide_ukranian.pdf Sustainable Development Goals: Ukraine. URL: http://www.un.org.ua/en/millennium-development-goals