An Interactive 5-Day Training Course
Financial Modelling & Tariff Setting for Utility Sector
Forecasting Models of Electricity Prices
Course Overview
Electricity markets are structurally different to other commodities, and the real-time dynamic balancing of the electricity network involves many external factors. Because of this, it is not a simple matter to transfer conventional models of financial time series analysis to wholesale electricity prices. Its unique features are not observed in other markets, such as weekly and daily seasonality’s, on-peak vs off-peak hours, price spikes, etc. The fact that electricity is not easily storable and the requirement to meet the demand always makes forecasting techniques challenging.
This GLOMACS Financial Modelling & Tariff Setting for Utility Sector training course presents the current state-of-the-art electricity price and financial forecasting methods, including statistical time series analysis, equilibrium models, and portfolio methods. It is designed to help delegates build their own utility tariff setting model from scratch and engage in simulation cases to acquire the best practices in modelling revenue requirements.
Training Outline
DAY 1: Introduction To Utility Economic Regulation Model Drivers And Scenarios
- Power Utility Challenges
- Key Regulatory Objectives / Aspects of Tariff Regulation
- Objectives of Economic Regulation
- Overview of Economic Regulatory Methodologies
- Need for Financial Models
- Final Model Overview
- Financial Modelling as A Regulatory Tool
DAY 2: Utility Sustainability
- Economic Sustainability
- Financial Sustainability
- Modelling Alternatives: Real vs Nominal - Firm or Equity Holders - Tax Treatment - Flow vs Discount Rate
- Demand Projections
- Revenue Requirement Building Blocks
- Best practices in modelling revenue requirements to determine tariffs
- Presentation of Simple Integrated Model: Single Year Model
- Limitation of Test-Year Approach: Multiyear Tariffs
DAY 3: Regulatory Asset Base
- Asset Base Evolution
- RAB & Depreciation Notes
- Asset Valuation
- Asset Base: Which assets to include and how to value them for regulatory purposes?
- Historic vs Replacement Values
- Final Asset Base
- Historic vs Forecast Modeling: Develop flexibility in the model to review historical data and determine a forecast
DAY 4: Opportunity Cost Of Capital WACC
- Weighted Average Cost of Capital (WACC)
- Risk Aversion
- Risk vs Returns
- Cost of Debt (Credit Ratings)
- Country Risk Premium and Sovereign Risk Rating
- WACC Calculations: Add WACC Calculation and Revise Current Tariff Requirement
- Sensitivity of Tariff to WACC and Capital Costs: Review the impact of each input to WACC on the tariff required
DAY 5: Depreciation, OPEX, And CAPEX
- Regulatory Aspects of Depreciation
- Depreciation Calculations I
- Depreciation Calculations II
- OPEX: Benchmarking Efficiency Factors & Regulatory Treatment of Losses
- Operating Cost: Develop operating costs calculations Efficiency Factor Estimates
- Investments: Develop Investment Calculations (definition and use of CAPEX drivers - energy users peak demand, etc.)
- Exogenous Investments
- Endogenous Investments: Financial Restrictions & Impact of WACC and Depreciation on Financeable Investments
Certificates
- On successful completion of this training course, GLOMACS Certificate will be awarded to the delegates
- Continuing Professional Education credits (CPE) : In accordance with the standards of the National Registry of CPE Sponsor, one CPE credit is granted per 50 minutes of attendance
Accreditation
GLOMACS is registered with NASBA as a sponsor of Continuing Professional Education (CPE) on the National Registry of CPE Sponsors. NASBA have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.learningmarket.org.
All Training Seminars delivered by GLOMACS by default are eligible for CPE Credit.
Providers and Associations
About Saudi Glomacs
At Saudi GLOMACS, we specialize in delivering world-class training courses in Saudi Arabia and across various international locations. Our training courses are tailored to meet the unique demands of Saudi Vision 2030 and the Human Capability Development Program, focusing on empowering Saudi citizens and enhancing workforce skills. We offer diverse courses spanning leadership, management, engineering, and technical disciplines to cultivate expertise and drive professional growth. Our flexible learning options—whether in-person, online, or in-house—ensure accessibility and convenience for individuals and organizations alike.
With over 30+ years of experience through the GLOMACS global network, we are committed to delivering innovative, results-driven training solutions. Our expert instructors combine industry knowledge with dynamic teaching methods, fostering practical skill development and long-term career success. By choosing Saudi GLOMACS, you're investing in personal excellence and contributing to the Kingdom’s sustainable economic growth and vision-driven transformation.
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