EDF Trading Annual Review 2014

 
EDF Trading Annual Review 2014
EDF
Trading
Annual Review 2014
EDF Trading Annual Review 2014
Introduction
                          Chairman’s Statement 			                4–5
                          Chief Executive’s Statement		           6–7
                          EDF Trading			                          8–9
                          The EDF Group			                        10 – 11

                          Our Markets			                          12 – 13
                          Origination, Business Development       14 – 17
                          and Group Integration
                          Power – Europe			                       18 – 21
                          Natural Gas – Europe			                 22 – 25
                          Power and Natural Gas – North America   26 – 31
                          EDF Energy Services			                  32 – 35
                          Liquefied Natural Gas (LNG) and 		      36 – 39
                          Liquefied Petroleum Gas (LPG)
                          Gas Production			                       40 – 43
                          Coal and Freight			                     44 – 47
                          Environmental Products 		               48 – 51
                          Flexibility Optimisation 			            52 – 55

                          Our Approach			                         56 – 57
                          Executive Committee			       58 – 59
                          Control Environment			       60 – 63
                          Risk Management			           64 – 67
                          Regulation and Compliance 		 68 – 69
                          Culture 				70 – 71
                          Community Support 			        72 – 73

                          Governance and Finance		                74 – 75
                          Board of Directors 			                  76 – 77
                          Financial Summary   		                  78 – 81

EDF Trading is part
of the EDF Group
operating throughout
the value chain across
all energy commodities.
EDFT provides wholesale
market solutions that
optimise and enhance
the businesses of the
EDF Group and our
third party customers.
EDF Trading Annual Review 2014
Chairman’s
                                 Statement
                                 EDF Trading is a core component          co-operation between our
                                 of the EDF Group, optimising             respective retail businesses in
                                 EDF Group assets and providing           Europe and North America.
                                 a platform for our development           In recent years EDFT has launched
                                 into new energy services and             and grown some exciting businesses
                                 geographies. The EDF Group               which all complement Group
                                 has an extensive portfolio of            activities including EDF Energy
                                 generation, storage, transmission        Services, EDFT’s North American
                                 and distribution assets and EDFT         retail operation. Most recently,
                                 works with Group companies               EDFT has entered the LPG
                                 helping us to mitigate risk, secure      wholesale market.
                                 sustainable revenues and realise
                                 added value. EDF Trading partnered       The energy markets never stop
                                 with various Group businesses            evolving. New regulatory and
                                 during the year and activities include   technology platforms, a growth
                                 managing EDF Energy Nouvelles’           in renewable energy production
                                 wholesale market exposure in Spain,      and the upstream gas revolution
                                 performing EDF Energy’s mandatory        in North America are just some
                                 power market making obligation           of the many factors driving change.
                                 in the UK, diverting a number of         I’m confident that EDFT will
                                 Edison’s LNG cargoes, optimising         continue playing a significant role
                                 EDF’s Crystal gas storage facility in    within the EDF Group providing core
                                 Germany, providing market access         wholesale market access and driving
                                 for EDF Polska in Poland, offering       new technological solutions to meet
                                 new customer services for EDF’s          our energy requirements.
                                 commercial team and fostering

                                 EDF Trading delivered a strong
                                 performance in 2014 coordinating
                                 Group activities across the global
                                 wholesale energy markets.
                                 Its services help optimise Group
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                                 assets and play an important role
                                 in our planning and implementation
                                 of new strategies and initiatives.

                                 Philippe Torrion
                                 Chairman, EDF Trading Board,
                                 EDF Executive Committee Member,
                                 Group Senior Executive Vice President,
        4                        Innovation, Strategy and Planning, EDF                                                 5
EDF Trading Annual Review 2014
Chief Executive’s
                                 Statement
                                 I often tell our employees that        EDF Trading provides efficient risk     within the EDF Trading group.
                                 being part of the EDF Group gives      management and wholesale market         EDF Energy Services will form
                                 us a competitive advantage in the      supply. We are also a pathfinder,       a foundation for the EDF Group’s
                                 wholesale energy marketplace.          identifying new opportunities,          future expansion into the North
                                 Our relationship with the Group        new geographies and new business        American retail energy sector,
                                 and the support it brings offers       for the Group.                          and EDFT will continue its role as
                                 us financial stability, an extensive   A good example of this is our           supplier of wholesale energy to
                                 and diverse portfolio of assets to     commercial and industrial retail        EDF Energy Services.
                                 optimise and the ability to trade in   business in North America,              Many competitors exited the
                                 many countries; all of which help      EDF Energy Services, which we           wholesale energy markets in
                                 create a strong, stable business.      have grown organically and is           2014 due to poor trading
                                 This is a very privileged position.    now a top 10 US non-residential         opportunities and regulatory
                                 The EDF Group also benefits by         retail electricity provider. In 2014,   pressures. Despite the challenges
                                 having a strong wholesale market       we began the process to establish       of this environment, EDF Trading
                                 presence as a core competence.         EDF Energy Services as a separately     continued to develop new business
                                                                        managed customer focused entity         under the asset-backed Group
                                                                                                                focused model that has been
                                                                                                                the foundation for our consistent
                                                                                                                and strong results over the years.
                                                                                                                As you read through our review
                                                                                                                of 2014, you will see how we have
                                                                                                                used our wholesale market presence
                                                                                                                providing energy optimisation
                                                                                                                services to support the EDF Group
                                                                                                                and our third party customers’
                                                                                                                many different businesses and
                                                                                                                areas of activity. Looking forward,
                                 Our role as the wholesale                                                      we will remain focused on identifying
                                 market interface for the                                                       opportunities to apply our asset-
                                 EDF Group gives us a                                                           backed, physical optimisation
                                                                                                                business model in those
                                 competitive advantage.                                                         commodities and markets where
                                 We use this to help the                                                        the Group is becoming more active.

                                 Group optimise its assets,
                                 manage market risks,
                                 generate sustainable
                                 revenue streams and create
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                                                                                                                                                        EDF Trading Annual Review 2014
                                 opportunities for future
                                 business developments.

                                 John Rittenhouse
                                 Chief Executive, EDF Trading

        6                                                                                                                                                       7
EDF Trading Annual Review 2014
EDF Trading
                                 EDF Trading is a leader in the global wholesale energy
                                 markets operating across all energy commodities and active
                                 along the entire energy value chain – production, shipping,
                                 transportation, storage and supply. We combine our skills
                                 and resources to optimise and add value to the assets
                                 controlled by the EDF Group and our third party customers.

                                 The wholesale market specialists       Providing worldwide logistics         Platform for EDF
                                 EDF Trading is a wholesale energy      We support the EDF Group and third    Group development
                                 specialist. We are global in our       party customers with midstream        EDF Trading serves as a pioneer
                                 perspective, asset-backed and          assets ranging from ocean-going       and platform for EDF Group
                                 operate along the value chain in       dry bulk carriers to inland rail      development into new energy
                                 power, natural gas, LNG, LPG, coal,    and barge logistics, dry bulk         services and geographies.
                                 freight and environmental products.    terminals, LNG re-gasification and
                                 With offices and operations            underground gas storage. We also      A trusted partner
                                 throughout Europe, Asia and North      have extensive power transmission     Fundamental to all that we do is our
                                 America, we apply our expertise in     and gas interconnector capacities     culture in which decisive managers
                                 the physical and financial markets     across Europe and North America.      and talented people balance
                                 to support the EDF Group and                                                 innovation with precise procedural
                                 third party customers with a wide      Dedicated retailer services           and compliance controls and a
                                 range of wholesale market services     Downstream, EDF Trading has           rigorous approach to risk. We trade
                                 including market access, asset         worldwide supply agreements           from a position of financial stability
                                 optimisation, risk management,         with commercial and industrial        and robust liquidity and have a
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                                 supply and logistics.                  consumers of power, natural gas,      Moody’s A3 credit rating.
                                                                        LNG and LPG, industrial retail
                                 A multi-commodity offering             aggregators and utilities. In North
                                 EDF Trading manages an extensive       America we have established
                                 portfolio of upstream assets mostly    EDF Energy Services, a dedicated
                                 consisting of power generation,        commercial and industrial retail
                                 natural gas production and             business for power, natural gas and
                                 long-term off-take agreements          environmental products.
                                 in power, natural gas, LNG and coal.

        8                                                                                                                                                      9
EDF Trading Annual Review 2014
The EDF Group
                                 Every day, millions of people turn to EDF Group companies for
                                 the power and gas they need for their homes, businesses and
                                 communities. The Group is a global leader in energy production
                                 and supply and a true innovator in low carbon energy technologies.

                                 A world leader in energy              Supply and distribution               Research and development
                                 The EDF Group operates around         EDF Group companies manage            With an R&D team of 2,125 people,
                                 the world and is active throughout    power transmission and gas            the EDF Group spent €650 million
                                 the energy value chain. It has        interconnector capacities across      last year conducting leading-edge
                                 significant interests in power        Europe and North America.             research. The aim is to make the
                                 generation, gas production and        Through a wholly-owned subsidiary     world a better place by improving
                                 storage, environmental initiatives,   the EDF Group channels energy to      access to electricity, fostering
                                 transmission networks and retail      the whole of Europe.                  innovations with tangible customer
                                 consumer sales.                                                             benefits, cutting CO2 emissions by
                                                                       Marketing and wholesale               developing alternatives to fossil fuels
                                 As of 31 December 2014, the Group’s
                                                                       The EDF Group’s experience            and building safer power grids.
                                 generation capacity exceeded
                                                                       in electricity and gas supply
                                 136 GW. It transmitted across
                                                                       in Europe and North America           Corporate strength
                                 1.46 million km of networks and
                                                                       crosses many different regulatory     In 2014, the EDF Group employed
                                 served 38.5 million customers.
                                                                       environments and serves more          approximately 158,000 people
                                                                       than 38.5 million customers.          worldwide and had sales of around
                                 Power generation                                                            €72 billion. It is listed on the Paris
                                 The EDF Group has unparalleled        Expert trading, optimisation, sales
                                                                       and marketing activities ensure the   stock exchange, a member of the
                                 depth and breadth of experience in                                          CAC40 index, and has an A+ stable
                                 power generation and engineering.     security and cost effectiveness of
                                                                       that supply.                          S&P credit rating.
                                 Its expertise encompasses the
                                 design, building, operation and
                                 maintenance of power plants
                                 fuelled by all types of energy.

                                                                                                                                          Jean-Bernard Lévy,
                                                                                                                                          Chairman and CEO
                                                                                                                                          of the EDF Group.
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 10                                                                                                                                                             11
EDF Trading Annual Review 2014
Our Markets
                                 EDF Trading is a service business.
                                 Our purpose is to work alongside the
                                 EDF Group and third party customers
                                 providing a specialised interface to the
                                 wholesale energy markets. We operate
                                 worldwide in the power, natural gas,
                                 LNG, LPG, coal and environmental
                                 products sectors.
                                 In 2014, the longer-term trends of
                                 increasing renewable energy production,
                                 North America’s shale revolution and
                                 China’s massive appetite for commodities
                                 all reflected on supply and demand.
                                 Individual commodity sectors were
                                 impacted by collapsing oil prices, regulatory
                                 developments, political unrest and unusual
                                 weather patterns. These events created
                                 periods of volatility for certain geographies
                                 and energy commodities.
                                 Our ability to deliver effective supply,
                                 logistics and optimisation services within
                                 such an environment is testament to the
                                 agility of the EDFT global, multi-commodity,
                                 asset-backed model. Through all the
                                 fluctuations, we are able to identify tangible
                                 business benefits for our customers.
                                 Justin Rowland
                                 Chief Commercial Officer, Trading
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 12                                                                                13
EDF Trading Annual Review 2014
Origination, Business Development
                                 and Group Integration
                                 The EDF Trading origination team structures energy market transactions outside   The advantage of EDF Trading’s business
                                 of the liquid market that provide bespoke products to the EDF Group and our      model is that it is inherently flexible.
                                 third party customers. Our global presence allows us to provide these services
                                 across all the major energy markets in Europe, North America and Asia.           EDF Trading creates incremental value for
                                                                                                                  our customers when commodity markets
                                 This gives our customers the ability to structure transactions that connect
                                 these markets and therefore optimise their global energy exposure.               move, supply chains are disrupted
                                                                                                                  and supply and demand balances are
                                                                                                                  changing. Whatever is happening in
                                                                                                                  the marketplace, supported by a robust
                                                                                                                  platform, we are able to apply our
                                                                                                                  experience to identify opportunities that
                                                                                                                  benefit our customers and the EDF Group.

                                                                                                                  Philipp Büssenschütt
                                                                                                                  Chief Commercial Officer
                                                                                                                  Origination and Business Development

                                                                                                                  Identifying and capturing
                                                                                                                  opportunities, creating value
                                                                                                                  EDF Trading’s origination team          In Europe, prices and supplies were
                                                                                                                  structures bespoke transactions         affected by macro events, namely
                                                                                                                  across all energy commodities,          the crisis in the Ukraine, unrest in
                                                                                                                  regions and tenor to allow the EDF      the Middle East and, later in the
                                                                                                                  Group and third party customers to      year, the fall in oil prices.
                                                                                                                  optimise their energy portfolios.       Apart from the above mentioned
                                                                                                                  Our team is not only located in the     headlines, the overall theme for the
                                                                                                                  main hubs of EDFT, namely London,       year was one of low volatility and
                                                                                                                  Paris, Houston and Singapore            pricing. It was also a year where
                                                                                                                  but also in a number of smaller         financial institutions continued to
                                                                                                                  regional offices to be closer to its    exit the marketplace.
                                                                                                                  customers. The energy markets           Within such an environment,
                                                                                                                  in 2014 were affected by some           the strength of our origination
                                                                                                                  exceptional factors.                    team to identify and capture
                                                                                                                  In North America, the extreme cold      opportunities came to the fore.
                                                                                                                  weather in the first quarter put        With our multi-commodity
                                                                                                                  pressure on power and gas supplies      global capabilities, we supported
                                                                                                                  and temporarily drove prices to         customers by providing stability and
                                                                                                                  record levels and extreme volatility.   value in the medium and long-term.
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 14                                                                                                                                                                                               15
EDF Trading Annual Review 2014
Origination, Business Development
                                 and Group Integration
                                 Activities – Origination and Business Development                                                                    EDF Group integration

                                 Operating from offices in Europe,      Expanding our flow business             Evolving the EDFT business            Our Group integration team is          Extending cooperation                 Optimising the EDF Group
                                 Asia and North America, the            The EDFT flow desk provides             Our origination team secures the      central to our relationship with the   to new Group entities                 gas portfolio
                                 origination team works jointly with    market access and execution             physical and contractual asset        EDF Group in that it collaborates      With EDF Polska in Poland,            EDFT continued its role of optimising
                                 our trading desks and the Group        services for the EDF Group and third    positions that not only strengthen    with the Group to identify if, how     we completed a new exclusive          the EDF Group’s gas portfolio.
                                 integration team to support the EDF    party customers. It operates across     EDFT’s existing business, but also    and when our energy market             power and emissions market            We established a hedging
                                 Group and third party customers.       all the physical and financial energy   help us capture opportunities         services can be used beneficially.     access agreement.                     programme and transacted
                                                                        markets creating structures in a        in new markets, countries             Where potential for cooperation        For the first time, we entered into   approximately 2TWh of gas and
                                 Structured transactions                wide range of volumes in the short      and commodities.                      exists, the team works with the        agreements with EDF Energies          associated flexibility.
                                 Our origination team identifies and    and medium-term.                        The origination team was involved     origination and relevant trading       Nouvelles and signed electricity      We also extended our contracts
                                 structures transactions that can       In 2014, we expanded our services       in EDFT’s recent entry into the LPG   desks to prepare structured            market access agreements to           to optimise EDF’s Crystal and
                                 encompass all commodities and          to German and Austrian energy           market. We agreed with a leading      proposals and implement the            manage its wholesale market           Bergermeer gas storage facilities on
                                 geographies. We do this to help        users. We also supported EDF in         US provider of midstream energy       market services.                       exposures in Spain and to manage      the TTF. In addition, we optimised
                                 customers optimise their assets,       France by extending flow services to    services to acquire medium-term       In 2014 the team increased             and dispatch one of its large wind    EDF’s gas interconnector capacities
                                 manage risks and meet their            its major commercial and industrial     LPG export capacity on the Gulf       its breadth of coverage with           farm facilities in Texas.             across North West Europe.
                                 energy needs.                          customers. In North America,            Coast and also agreed with an         Group entities and the scope of
                                 As an example, for Europe, the team    our flow desk was particularly          end-user customer in Asia for         services offered.                      Supporting EDF and                    Collaborative activities
                                 worked with EDF Energy in the UK       active at the beginning of the year     the supply of LPG.                                                           its major customers                   for 2015 and beyond
                                 on a number of long-term power         providing gas and power services                                              Extracting additional value            EDFT provided a range of wholesale    During the year, we undertook
                                 transactions with large power          during the cold wave that hit                                                 from EDF’s assets in France            energy market services to EDF’s       a number of new initiatives with
                                 consumers. We also structured an       North America.                                                                In 2014, we enhanced our flexibility   commercial team and its major         EDF Group companies which
                                 innovative temperature contingent                                                                                    optimisation management services       customers in France. This included    included a new project with EDF
                                 gas contract with an energy retailer                                                                                 with the Group’s optimisation          co-operating on tenders, extending    Energy to integrate its coal logistics
                                 in France. In North America, the                                                                                     and trading team in France to          our market access services to         team into EDFT’s coal and freight
                                 team helped to add more than                                                                                         include pump storage assets in         its customers and providing           business creating a single coal
                                 1,400 MW to EDFT’s energy                                                                                            addition to its coal, CCGT and         hedging programmes.                   platform serving the Group’s
                                 management portfolio.                                                                                                hydro reservoir plants.                We also began fostering links         UK requirements.
                                                                                                                                                                                             between our retail business           Close cooperation continues
                                                                                                                                                      Expanding services to                  activity in North America and         with EDF to establish optimisation
                                                                                                                                                      EDF Energy in the UK                   EDF Group businesses in Europe        programmes in preparation for the
                                                                                                                                                      We transferred ownership of the        with regard to sharing best           commissioning and operations of
                                                                                                                                                      Hole House UK gas storage facility     practices and serving energy          the Dunkirk LNG terminal in 2015.
                                                                                                                                                      to EDF Energy while retaining our      intensive customers for EDF’s         We continued to strengthen our
                                                                                                                                                      market optimisation role. We also      global locations.                     relationship with Edison in Italy.
                                                                                                                                                      agreed to perform EDF Energy’s
                                                                                                                                                                                                                                   In 2014 we successfully diverted
                                                                                                                                                      mandatory power market-making
                                                                                                                                                                                                                                   a number of its LNG cargoes and
                                                                                                                                                      obligation imposed by Ofgem.
                                                                                                                                                                                                                                   continued to work with them on
                                                                                                                                                                                                                                   their gas flow business.
                                                                                                                                                                                                                                   Also, we have begun discussions
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                                                                                                                                                                                                                                   with Dalkia following its integration
                                                                                                                                                                                                                                   into the EDF Group last summer.
                                                                                                                                                                                                                                   Dalkia is one of the largest gas
                                                                                                                                                                                                                                   purchasers in France.

                                 Fabien Bremont
 16                              Head of Group Integration                                                                                                                                                                                                                   17
EDF Trading Annual Review 2014
Power – Europe                                                                                                           ©EDF, William Beaucardet,
                                                                                                                                                          Power Plant, France.

                                 EDF Trading is a major participant in the European
                                 wholesale power markets. We add value to the
                                 businesses of the EDF Group and third party customers    This year’s low volatility and
                                 by providing a range of tailored services including
                                 market access, risk management and asset optimisation.
                                                                                          weak prices created a challenging
                                                                                          marketplace. We continued to
                                                                                          capture opportunities and create
                                                                                          value because of our in-depth
                                 EDFT through the value chain:
                                                                                          market knowledge, diverse
                                 Source                                                   portfolio of positions and ability
                                 EDF Group power stations                                 to transact across borders.
                                 Third party power stations

                                 Services
                                                                                          John Grey
                                 Wholesale market access                                  Head of European Power
                                 Asset optimisation
                                 Risk management                                                                               Finding value in a
                                 24/7 intraday services                                                                        stable marketplace
                                 Fuel supply
                                 Virtual power plant services                                                                  EDF Trading’s comprehensive
                                 Interconnector transmission capacity                                                          coverage of the European
                                 Grid operator scheduling services                                                             wholesale power market enabled
                                 Flow desk services                                                                            us to continue capturing
                                                                                                                               opportunities during 2014 when
                                 Supply                                                                                        the business environment was
                                                                                                                               characterised by low volatility in
                                 Wholesale customers                                                                           both pricing and demand.
                                                                                                                               A warm winter in the first quarter
                                                                                                                               set the pattern for a year in which
                                                                                                                               there were no serious weather
                                                                                                                               extremes. We did experience market
                                                                                                                               fluctuations in the spring due to
                                                                                                                               political instability in Eastern Europe
                                                                                                                               and also in the autumn when there
                                                                                                                               was disruption to the nuclear fleet
                                                                                                                               in Belgium. But, in both instances,
                                                                                                                               we had the breadth of resources to
                                                                                                                               manage the situation and maintain
                                                                                                                               support for our customers.
                                                                                                                               The power sector continues
                                                                                                                               evolving with new gas-fired plants
                                                                                                                               coming on stream. We also saw a
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                                                                                                                               marked increase in renewables with
                                                                                                                               significant growth in wind and solar
                                                                                                                               power generation.
                                                                                                                               Against such a background,
                                                                                                                               EDF Trading continued providing
                                                                                                                               dependable wholesale market
                                                                                                                               services to add value to and optimise
                                                                                                                               the assets owned or operated by
                                                                                                                               the EDF Group and our third
                                                                                                                               party customers.

 18                                                                                                                                                                                    19
Power – Europe
                                 Activities                                                                                                                                              Increased intraday services
                                                                                                                                                                                         The increasing number of
                                                                                                                                                                                         renewable energy providers and
                                                                                                                                                                                         the intermittent nature of their
                                                                                                                                                                                         output has led to significant
                                                          Understanding the dynamics               Adapting to new regulations                                                           growth in the European intraday
                                                          EDFT has a unique perspective            The European regulatory landscape                                                     market. EDFT began strengthening
                                                          on European wholesale power.             continues to change in terms of                                                       its intraday team in 2012 and we
                                                          Our coverage of all the significant      market design, financial regulation                                                   now offer a comprehensive, 24/7,
                                                          national and international markets       and competition. Working closely                                                      pan-European service.
                                                          gives us a clear insight as to the       with the EDFT regulation team,
                                                          dynamics affecting each country          we have evolved our power business
                                                                                                                                                                                         EDF Group support
                                                          and their interaction across             protocols and liquidity provisions
                                                                                                                                                                                         EDFT provides market access,
                                                          the continent. This allows us to         to ensure full compliance with the
                                                                                                                                                                                         asset optimisation and wholesale
                                                          monitor and analyse events such as       new regulations, including REMIT
                                                                                                                                                                                         market services to EDF Group
                                                          interconnector capacities, flows and     and EMIR.
                                 John Grey                                                                                                                                               companies on a continual basis.
                                                          price differentials to better identify   It was noticeable in 2014 that,
                                 Head of European Power
                                                          and capture opportunities.                                                                                                     We provided market access for
                                                                                                   with the high costs of regulatory
                                                                                                                                                                                         EDF Polska in Poland, for EDF
                                                          Our use of data combined with            compliance and the low volatility
                                                                                                                                                                                         Bert in Hungary and for EDF’s
                                                          the physical resources we manage         of energy prices, many financial
                                                                                                                                         ©EDF, Vincent Bourdon,                          commercial division in France
                                                          enables us to accurately hedge           institutions left the marketplace.
                                                                                                                                         Pylon, France.                                  through an agreement with
                                                          market risks, maximise asset values
                                                                                                                                                                                         a major car manufacturer.
                                                          and secure supplies for the EDF
                                                                                                                                                                                         We agreed to support EDF
                                                          Group and third party customers.
                                                                                                                                                                                         Energies Nouvelles in Spain
                                                                                                                                                                                         with hedging services and
                                                                                                                                                                                         began acting as a market-maker
                                                                                                                                                                                         for EDF Energy in the UK.

                                                                                                                                                    Third party customer support
                                                                                                                                                    Throughout the year, our Flow
                                                                                                                                                    team transacted with many third
                                                                                                                                                    parties including utilities, large
                                                                                                                                                    consumers, producers, financial
                                                                                                                                                    houses and oil companies.
                                                                                                                                                    Notable activities include a
                                                                                                                                                    framework agreement with a Swiss
                                                                                                                                                    power company to transact 10 TWh
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                                                                                                                                                    of power over the next two years,
                                                                                                                                                    and a five year supply contract
                                                                                                                                                    with a UK water utility. We also
                                                                                                                                                    established business relationships
                                                                                                                                                    with a number of Stadtwerke and
                                                                                                                                                    industrial customers in Germany
                                                                                                                                                    and became a market-maker on
                                                                                                                                                    the German, French and Italian
                                                                                                                                                    wholesale energy markets.

                                 ©EDF, Michel Monteaux,
 20                              Power Plant, France.
                                                                                                                                                                                                                             21
Natural Gas – Europe

                                 EDF Trading is a leader in the European wholesale gas      This has been a challenging year with significant
                                 markets and acts throughout the natural gas and LNG        unpredictability around supply, demand and
                                 value chain. We operate on all the principal gas hubs
                                 and developing markets to support EDF Group and third      pricing. Through it all, the EDF Trading business
                                 party businesses with structured optimisation solutions.   model has proved resilient. Drawing on our
                                                                                            experience, insights and managed assets, we have
                                                                                            consistently delivered value to our customers.
                                 EDFT through the value chain:

                                 Source                                                     Marcello Romano
                                                                                            Head of European Gas and Flow
                                 LNG supply contracts worldwide
                                 EDF Group North Sea natural gas production

                                 Services                                                                                   Short-term unpredictability
                                                                                                                            The increasing availability and cost
                                 Procurement and supply
                                                                                                                            competiveness of LNG will ultimately
                                 Wholesale market services
                                                                                                                            unite wholesale gas into a global
                                 Pan-European interconnector capacity
                                                                                                                            marketplace. The European market
                                 Pan-European pipeline capacity
                                                                                                                            is on the cusp of change over the
                                 Nominations into the European gas network
                                                                                                                            next few years as significant new
                                 Dispatch management
                                                                                                                            flows of LNG enter the market from
                                 Gas storage management
                                                                                                                            Australia and North America. In the
                                 LNG tanker contracts
                                                                                                                            short-term, however, Europe remains
                                 Regasification capacity at European terminals
                                                                                                                            susceptible to more regional supply
                                 International export agreements
                                                                                                                            and demand fluctuations.
                                 Hedging services
                                 Flow desk services                                                                         During 2014, the European
                                                                                                                            wholesale gas market was
                                 Supply                                                                                     subject to intermittent volatility.
                                                                                                                            Political unrest in Eastern Europe
                                 EDF Group power stations                                                                   created uncertainty around supply
                                 Third party power stations                                                                 programmes, which led to greater
                                 Wholesale customers                                                                        use of stored gas and an emphasis
                                                                                                                            on maintaining high storage levels.
                                                                                                                            In parallel, the price of some natural
                                                                                                                            gas and LNG supplies fell because
                                                                                                                            of their link to collapsing oil prices.
                                                                                                                            Adding to this, the warm weather
                                                                                                                            experienced throughout the year
                                                                                                                            reduced normal demand patterns.
                                                                                                                            With the depth and breadth of our
                                                                                                                            worldwide activities, EDF Trading
                                                                                                                            is well positioned to accommodate
EDF Trading Annual Review 2014

                                                                                                                                                                      EDF Trading Annual Review 2014
                                                                                                                            changing dynamics. The experience
                                                                                                                            of our wholesale gas team and the
                                                                                                                            insights gained from our global
                                                                                                                            coverage enable us to optimise the
                                                                                                                            assets we manage and continue
                                                                                                                            reliably delivering value to the EDF
                                                                                                                            Group and our third party customers.

                                                                                                                            ©EDF, Jean-Louis Burnod,
 22                                                                                                                         Re-gas Terminal, France.
                                                                                                                                                                       23
Natural Gas – Europe
                                 Activities

                                                                                                                                                Optimising the EDF portfolio
                                                                                                                                                EDFT supports the EDF Group with
                                 A coordinated business                  Enhancing our                                                          a dedicated, customer focused,
                                 EDF Trading has strategically           European footprint                                                     optimisation capability for its
                                 developed a coordinated                 During the year we identified                                          European gas businesses including
                                 approach to its European                and captured opportunities to                                          power generation plants, storage
                                 wholesale gas business.                 further enhance our pan-European                                       facilities, pipeline capacity and
                                                                         gas wholesale capabilities.                                            interconnector capacity.
                                 Intelligence gathered via our
                                 pan-European asset-backed natural       We began preparations to enter the                                     Our services range from
                                 gas business, customer flow desk        Spanish wholesale gas market to                                        procurement, supply, logistics
                                 transactions and from our global        complement our LNG activities in                                       and contract management
                                 LNG business gives us a unique          the region, we expanded storage                                        to portfolio analysis, pricing,
                                 understanding of the marketplace.       optimisation activities in France,                                     hedging and reporting.
                                 We use this insight in combination      Germany and Holland and we                                             Notable activities during 2014
                                 with the breadth of our resources       are also pursuing opportunities        Marcello Romano                 included managing gas optimisation
                                 to access the most appropriate          for expansion of our wholesale         Head of European Gas and Flow   for EDF Energy’s new CCGT plant at
                                 channels and better manage              market activities in Eastern Europe.                                   West Burton in the UK, optimisation
                                 supply streams, price differentials                                                                            of EDF Energy’s gas storage
                                 and asset optimisation for the                                                                                 facility at Hole House in the UK,
                                 benefit of our customers.                                                                                      and optimisation of EDF’s Crystal
                                                                         ©EDF, Jean-Louis Burnod,                                               gas storage facility in Germany.
                                 Flow desk services
                                                                         LNG re-gas terminal, France.                                           We also expanded our customer
                                 The slow decline of gas prices                                                                                 flow business to support EDF’s
                                 during 2014 and the uncertainty                                                                                commercial division in France
                                 of prices looking forward has                                                                                  and Edison in Italy.
                                 created a preference among some
                                 customers for transacting in smaller
                                 volumes over shorter timescales.                                                                                                                     Supporting third party
                                 Our flow desk supported such                                                                                                                         customers
                                 customers with standard transaction                                                                                                                  EDFT transacts with many third
                                 market access and execution                                                                                                                          party customers across Europe.
                                 services across a range of volumes in                                                                                                                Significant transactions this year
                                 both the short and medium-term.                                                                                                                      included acquiring large quantities
                                                                                                                                                                                      of natural gas from one of
                                                                                                                                                                                      Germany’s largest distributors and
                                                                                                                                                                                      supplying gas and asset optimisation
                                                                                                                                                                                      services to multiple storage facilities
                                                                                                                                                                                      across Germany and Holland.
                                                                                                                                                                                      We also continued to expand
                                                                                                                                                                                      our transacting and origination
                                                                                                                                                                                      relationships with a number of
EDF Trading Annual Review 2014

                                                                                                                                                                                                                                EDF Trading Annual Review 2014
                                                                                                                                                                                      Stadtwerke and industrial customers
                                                                                                                                                                                      in Germany and France.

                                                                                                                                                ©EDF, Julien Goldstein,
                                                                                                                                                Gas pipelines, Italy.

 24                                                                                                                                                                                                                              25
Power and Natural Gas – North America
                                                                                                ©Shutterstock, Bikeriderlondon,
                                                                                                Electricity Pylons, Texas.

                                                                                                                                  Managing a
                                                                                                                                  challenging environment
                                 In North America, EDF Trading is a major player in the power                                     EDF Trading is a trusted leader     Additionally, an extreme weather
                                 and natural gas wholesale markets. We apply our market                                           in the North American wholesale     system settled over Canada
                                 expertise to provide our partners with a comprehensive                                           power and natural gas markets.      and North America to create a
                                 range of market, optimisation and risk management services.                                      Our expertise and coverage of       period of persistent cold in which
                                                                                                                                  these markets enables us to         temperatures reached record
                                                                                                                                  implement comprehensive             levels. Within such a challenging
                                                                                                                                  strategies that provide market      environment, during the weather
                                 EDFT through the value chain:
                                                                                                                                  access, monitize portfolios and     extremes and the warm summer
                                 Source                                                                                           create value for our clients.       that followed, EDFT’s strategy
                                                                                                                                  We partner with EDF Energy          and platform proved its resilience.
                                 Long-term tolling contracts                                                                      Services to provide wholesale       We worked with EDF Energy
                                 Natural gas supply contracts                                                                     market access and commodity         Services to provide generators
                                 EDFT natural gas production                                                                      services to energy management       with the fuel required to continue
                                 Long-term third party gas production                                                             clients, commercial and             running their plants, maintained
                                 EDF Energy Services clients                                                                      industrial consumers and retail     supplies to trading partners and
                                 Term gas storage contracts                                                                       energy providers.                   successfully delivered against all
                                                                                                                                  During 2014, the energy markets     our contract obligations. We also
                                 Services                                                                                         continued evolving to reflect the   provided transaction support and
                                                                                                                                  increasing availability of shale    creative products to our existing
                                 Wholesale market services                                                                        gas, the growth of renewable        and new power and natural
                                 Risk management                                                                                  energy sources and the decline      gas customers.
                                 Hedging                                                                                          of coal-fired generation.
                                 Nodal pricing
                                 Gas storage across the USA and Canada
                                 USA and Canada pipeline capacity
                                 Interconnector capacity

                                 Supply

                                 EDF Energy Services
                                 Trading partners
                                 Gas asset owners
                                 Generators
                                 LDCs and utilities
                                 Municipalities and Cooperations
                                 Wholesale Retail Energy Providers (REPs)

                                 Our platform and strategy in both power and
                                 natural gas has always been focused on the
                                 operational needs of our trading counterparties
EDF Trading Annual Review 2014

                                                                                                                                                                                                            EDF Trading Annual Review 2014
                                 and clients. In 2014, despite extreme weather
                                 conditions and fundamental infrastructure
                                 challenges, we delivered our commitments
                                 and proved our worth as the market’s most
                                 dependable partner to do business with.

                                 Stan Horton
 26                              Head of East Power and Gas Trading                                                                                                                                          27
Power – North America
                                 Activities

                                 Weather resistant                                                                                               Comprehensive market coverage
                                 The extreme weather conditions                                                                                  EDFT is active coast to coast and
                                 at the beginning of 2014 proved                                                                                 present in all deregulated markets.
                                 the robust nature of the EDFT                                                                                   We began transacting in the newly
                                 business model. While the                                                                                       opened SPP and Entergy markets in
                                 Northeast markets recorded                                                                                      addition to our previously existing
                                 record loads and outage events,                                                                                 SERC, VACAR, FRCC, MISO, PJM,
                                 we successfully delivered on all                                                                                NYISO, ISO NE, WECC, CAISO and
                                 of our wholesale power supply                                                                                   ERCOT market operations.
                                 obligations and found ways to                                                                                   During 2014, we were consistently
                                 provide creative solutions to our                                                                               ranked in the Top 10 of Platts
                                 trading partners. Additionally, we                                                                              Megawatt Daily power rankings.
                                 provided liquidity and hedging
                                 services to our retail energy provider
                                 partners who, as a result of the
                                 extreme cold weather, faced an                                           ©Shutterstock, Robert Cicchetti,
                                 increase in load and supply.                                             Polar Vortex January 2014, New York.

                                 Arun Eamani
                                 Head of Nodal and FTR Trading
EDF Trading Annual Review 2014

                                                                                                                                                                                                               EDF Trading Annual Review 2014
                                 Support for Group businesses             Managing congestion
                                 During 2014, we optimized                Our FTR (financial transmission
                                 positions for EDF Energy Services’       rights) and nodal teams successfully
                                 commercial and industrial clients.       managed the congestion that
                                 We also continued providing              occurred during the period of
                                 hedging services to EDF Group            extreme cold weather.
                                 businesses in North America.             Throughout the year, the teams
                                                                          worked with our flow desk and
                                                                          provided support to load serving
                                                                          clients on how to best manage                                                                                ©EDF, Philippe Dollo,
 28                                                                       congestion rights.                                                                                           Wind Farm, Minnesota.
                                                                                                                                                                                                                29
Natural Gas – North America
                                 Activities                                                                 Extensive end-user
                                                                                                            customer base
                                                                                                            EDFT consistently ranks in the top
                                 Wholesale market services
                                                                                                            5 of NGI’s list of the largest gas
                                 EDFT’s upstream, midstream and
                                                                                                            marketers in North America and
                                 downstream positions provide
                                                                                                            trades with over 500 wholesale
                                 support to counterparties
                                                                                                            customers. We also partner with
                                 throughout the value chain.
                                                                                                            EDF Energy Services to provide
                                 With our range of wholesale
                                                                                                            broad based wholesale natural
                                 market services, we optimise
                                                                                                            gas solutions to their wide range
                                 assets, secure income streams
                                                                                                            of customers.
                                 and help create a competitive
                                 advantage for our clients.

                                                                                                                                                 ©EDF, Philippe Dollo,
                                                                                                                                                 New York.

                                 Stan Horton
                                 Head of East Power and Gas Trading

                                                                      Comprehensive                                                                                 Managing the extreme
                                                                      transport network                                                                             weather conditions
                                                                      Continuous development of our                                                                 Throughout a three month
                                                                      transportation network with leased                                                            period of persistent extreme
                                                                      and managed assets gives us the                                                               cold, despite severe power plant
                                                                      ability to manage gas deliveries                                                              outages, network loading and
                                                                      to customers across the North                                                                 fuel switching, we provided
                                                                      American continent. Our pipeline                                                              continuous support to our
                                                                      transportation agreements                                                                     customers. EDFT not only met
                                                                      extend throughout the USA,                                                                    obligations, but met the broader
                                                                      Canada and into Mexico. We also                                                               needs of the market and proved
                                                                      manage capacity for gas utilities                                                             that it is a reliable and strong
                                                                      and exploration and production                                                                counterparty for customers
                                                                      companies. In 2014, we despatched                                                             along the value chain.
                                                                      to market an average of 6.5 bcf per
                                                                      day. EDFT is one of the market’s                                                              Notable Transaction
EDF Trading Annual Review 2014

                                                                                                                                                                                                       EDF Trading Annual Review 2014
                                                                      largest gas storage lessors and                                                               Among the new transactions
                                                                      has facilities throughout the major                                                           concluded in 2014, EDFT reached
                                                                      producing and consuming regions.                                                              agreement with a major gas
                                                                      Our long-term storage capacity                                                                production company to manage
                                                                      averaged 28 Bcf throughout 2014.                                                              a portion of their gas supply
                                                                                                                                                                    and optimise their natural gas
                                                                                                                                                                    transport positions.

                                 ©EDF, Philppe Eranian,
 30                              Gas facility, Brasil.
                                                                                                                                                                                                        31
EDF Energy Services
                                                                                        Stability in a
                                                                                        transitory marketplace
                                 EDF Energy Services is EDF Trading’s business          EDF Energy Services originates
                                 for commercial and industrial, power generation,       and delivers energy solutions for
                                 asset management and retail energy providers           large commercial and industrial
                                 in North America. We support each customer with        users, retail energy providers and
                                 unparalleled wholesale market access and custom        power generators. Drawing on our
                                 energy solutions delivered within an easy to access,   expertise of the wholesale power,
                                 proactive account management framework.                natural gas and environmental
                                                                                        markets, we structure single and
                                                                                        multi-product, medium to long-
                                 EDF Energy Services through the value chain:           term programmes encompassing
                                                                                        services ranging from supply
                                 Source
                                                                                        and dispatch to hedging and
                                                                                        wholesale supply.
                                 Two thousand trading counterparties
                                 Generation management                                  2014 was a challenging year in
                                 Producer services                                      that it highlighted the transitory
                                 Environmental products supply contracts                status of the North American
                                                                                        energy environment. The energy
                                                                                        infrastructure has not kept pace
                                 Services                                               with the shale revolution and many
                                                                                        energy users and suppliers were
                                 Demand response                                        confronted by very real physical
                                 Electricity supply                                     problems during the extreme
                                 Natural gas supply                                     weather in the first quarter.
                                 Environmental products supply including RECs
                                 Carbon services                                        Similarly, the significant supplies
                                 Risk management and hedging services                   of shale gas stabilised prices at a
                                 Market analysis and reports                            low level to the extent that many
                                 Weather risk products                                  financial houses have left the
                                 Specialized data and billing systems                   marketplace, thus leaving
                                 Online information portal                              customers looking for stable
                                 Mobile application                                     counterparties to transact with.
                                                                                        Throughout the weather extremes,
                                                                                        our business model and expertise
                                 Supply
                                                                                        proved robust. EDF Energy Services
                                                                                        not only met their obligations to
                                 Power station owners
                                                                                        existing customers, but secured
                                 Large commercial and industrial end-users
                                                                                        additional customers by providing
                                 Retail energy aggregators
                                                                                        exceptional service under
                                                                                        extraordinary market conditions.
                                                                                        Within the marketplace we are
                                                                                        recognised for our long-term
                                                                                        commitment. With the credibility of
                                                                                        being part of the global EDF Group,
                                                                                        we are well positioned to continue
                                 The extreme cold weather of 2014                       growing our customer base.
                                 illustrated the strength of our
EDF Trading Annual Review 2014

                                                                                                                              EDF Trading Annual Review 2014
                                 client-focused business model.
                                 Our employees worked tirelessly to
                                 ensure we fulfilled our obligations
                                 and continued delivering value to
                                 our customers.

                                 Mary Anne Brelinsky
 32                              Managing Director, EDF Energy Services                                                        33
EDF Energy Services                                                                                                                          Advanced technologies
                                                                                                                                                                              The application of advanced
                                                                                                                                                                                                                    SOAR (scheduling online and
                                                                                                                                                                                                                    reporting) continues to be a
                                 Activities                                                                                                                                   technologies is an important          customer favourite. On one site,
                                                                                                                                                                              value added service.                  a customer can view asset data,
                                                                                                                                                                              We have real-time scheduling          market pricing and how the asset
                                                                                                                                                                              operations for our energy             is interacting with the ISO.
                                                                                                                                                                              management and retail clients.        Reports and data can be produced
                                 Customer focused delivery                                                                                                                    Also, to support multi-site, multi-   to provide insight into the asset’s
                                 Exceptional service is at the heart                                                                                                          state customers, we have recently     performance and help make
                                 of EDF Energy Services. We work                                                                                                              introduced a new electronic billing   optimisation decisions.
                                 as partners with our customers                                                                                                               system that enables integrated,       The SOAR mobile application
                                 to establish the best product                                                                                                                cross-state invoicing throughout      continues to be very popular
                                 combination to meet their business                                                                                                           all the deregulated markets we        allowing for information to be
                                 objectives. In turn, each customer                                                                                                           currently serve.                      viewed remotely.
                                 solution is delivered within a
                                 dedicated account management                                                                                                                 Our SCADA (supervisory control        The SOAR retail application
                                 framework backed by detailed                                                                                                                 and data acquisition) solution        was recently rolled out to retail
                                 market data, fundamental analysis                                                                                                            has been positively received          power and gas customers and
                                 and state-of-the-art technologies.                                                                                                           by customers. It provides a set       provides real-time usage data,
                                                                                                                                                                              of systems, communications            market pricing, invoicing and
                                                                                                                                                                              technologies and NERC compliant       reporting capabilities.
                                 Upstream customer services                 Active in the WMBE sector           Increased customer transactions                               processes that enable real-time
                                 EDF Energy Services has an                 Our Anahau Energy business,         The volume of business through                                control and monitoring of
                                 expanding footprint across the             which transacts in those energy     our flow desk continues to rise                               generation and load resources.
                                 North American power sector.               sectors reserved for WMBE           in response to market needs for
                                 We are the largest energy                  (women and minority business        short or medium-term transactions.      Mary Anne Brelinsky
                                 optimisation provider for third            enterprise) suppliers, continued    The desk provides standard              Managing Director,
                                 party US power generators and              building its customer base.         transaction market access and           EDF Energy Services
                                 manage approximately 22 GW                 We work together to originate       execution services across a wide
                                 of natural gas, renewable,                 and supply customers who            range of volumes in both the                                                                          Supporting EDF
                                                                                                                                                                                                                      Group businesses
                                 hydro and coal generation.                 choose or are mandated to           short and medium-term.
                                                                                                                                                                                                                      In North America, we are working
                                                                            purchase from a WMBE provider.
                                 Flexibility is inherent in our services.                                                                                                                                             with EDF Renewable Energy to
                                 Depending on the need, we provide          To help our customers achieve       Downstream customer services                                                                          optimise some of their merchant
                                 power generation customers with            their strategic goals, we support   Deregulation continues to gain                                                                        plants. Additionally, we are
                                 structured energy management               them with bespoke, single and       momentum across North America                                                                         collaborating to develop products
                                 agreements addressing all aspects          multi-product, medium to long-      in both the natural gas and power                                                                     and services for customers looking
                                 of asset management. Our services          term supply programmes and          markets. EDF Energy Services is                                                                       to incorporate renewable
                                 include dispatch, scheduling,              a range of added value services     currently active in 14 deregulated                                                                    energy into their energy plans
                                 origination, fuel supply, demand           including hedging and wholesale     states and provinces throughout the                                                                   and portfolios.
                                 response and risk management.              market access.                      USA and Canada. With a portfolio
                                                                                                                of more than 400 commercial and                                                                       From an international perspective,
                                                                                                                industrial customers, we serve                                                                        our US-based commercial and
                                                                                                                approximately 2000 MWs of peak                                                                        industrial origination team has
                                                                                                                load and deliver approximately                                                                        been working with colleagues in
                                                                                                                350,000 MMBtu/d of gas.                                                                               EDF Energy in the UK and EDF in
                                                                                                                                                                                                                      France to explore the development
                                                                                                                Our business model provides                                                                           of tailored energy solutions for
                                                                                                                market access and liquidity to retail
EDF Trading Annual Review 2014

                                                                                                                                                                                                                                                           EDF Trading Annual Review 2014
                                                                                                                                                                                                                      shared multi-national customers.
                                                                                                                suppliers who serve mass market
                                                                                                                customers. Our flow desk provides
                                                                                                                physical supply, risk management,
                                                                                                                and hedging services to help these
                                                                                                                suppliers manage their portfolios.

 34                                                                                                                                                                                                                                                         35
LNG and LPG                                                                                                                                             ©EDF, Jean-Louis Bernod,
                                                                                                                                                                                         Gas Tunnel, France.

                                 EDF Trading is one of the leading participants in
                                 the global LNG market, offering services along the
                                 value chain including supply, logistics and terminal
                                 capacity. In 2014, we entered the complementary
                                 LPG market enhancing our services to the EDF
                                 Group and third party customers.

                                 EDFT through the value chain:

                                 Source

                                 EDFT gas producing wells
                                 Third party gas producing wells
                                 Third party gas suppliers
                                 Third party LPG suppliers

                                 Services

                                 Wholesale market services
                                 Gas storage
                                 Interconnector capacity
                                 Pipeline capacity
                                 LNG tanker contracts
                                 International export agreements
                                 Regasification facilities worldwide
                                 US LPG export capacity
                                 Asset optimisation services
                                 Hedging services

                                 Supply

                                 EDF Group
                                 Wholesale customers
                                 Commercial and industrial customers

                                 Preparing for a
                                 new age in LNG
                                 EDF Trading offers a complete            In recent years we have been           This, combined with an expected
                                 range of LNG services worldwide          strategically developing our           resurgence in nuclear power
                                                                                                                                                        We have been strategically developing
                                 including purchase, supply and           positions along the value chain to     generation in the Far East,            our LNG capabilities to stay ahead of
                                 delivery, ocean-borne logistics,         maximise asset values and minimise     will affect both supply and demand     the fundamental changes occurring
EDF Trading Annual Review 2014

                                                                                                                                                                                                                    EDF Trading Annual Review 2014
                                 terminal capacity, regasification        supply costs. These developments       trading patterns and create a
                                 and nominations into pipeline            not only enhance optimisation          much more dynamic wholesale            in the wholesale gas marketplace.
                                 networks. We supply and optimise         opportunities for our customers but    environment. With the breadth          Each development adds even more
                                 LNG to and from the EDF Group’s          also correctly position our business   and depth of our value chain
                                 European gas businesses and supply       in anticipation of the fundamental     activities, EDFT has the flexibility
                                                                                                                                                        flexibility to our capabilities and
                                 a diverse international customer         changes happening in the global        to accommodate these changes           creates new optimisation
                                 portfolio. We also have unique
                                 supply arrangements that provide
                                                                          LNG marketplace.                       and continue delivering benefits to
                                                                                                                 customers around the world.
                                                                                                                                                        opportunities for our customers.
                                                                          2015 will see the beginning of
                                 considerable flexibility to producers.   a new age for LNG as the first
                                                                          supplies from the USA and
                                                                          Australia come on stream.                                                     Matthew Arnold
 36                                                                                                                                                     Global Head of LNG and LPG                                   37
LNG and LPG                                                                                                   Support for EDF
                                                                                                                                               Group businesses
                                 Activities                                                                                                    EDFT provides tailored support
                                                                                                                                               to EDF Group businesses for LNG
                                                                                                                                               supply and optimisation.
                                 North American liquefaction
                                                                                                                                               Notably in 2014, we formed
                                 Reflecting the changing supply
                                                                                                                                               part of the EDF negotiating
                                 dynamics of the LNG marketplace,
                                                                                                                                               team that secured a 20 year,
                                 in 2014 we progressed the
                                                                                                                                               0.8 MTA supply agreement with
                                 development of small-scale
                                                                                                                                               a US-based energy company
                                 liquefaction projects on the North
                                                                                                                                               developing a major liquefaction
                                 American west coast to better serve
                                                                                                                                               plant in Texas. We are working with
                                 our customers in Asia.
                                                                                                                                               EDF on the commissioning and
                                 A joint development agreement                                                                                 commercialisation of regasification
                                 has been signed to develop a                                                                                  capacity at the Dunkirk terminal,
                                 0.6MT, barge-based, liquefaction                                                                              which will become operational in
                                 plant in the Douglas Channel,                                                                                 2015. And, throughout the year,
                                 British Columbia.                                                                                             we continued assisting Edison
                                                                                                                                               in the optimisation of its LNG
                                 Optimised LNG shipping                                                                                        supply contracts.
                                 Technological developments have
                                 led to the introduction of a new
                                 generation of larger, more cost           ©EDF, Julien Goldstein,
                                                                           LNG Regas Facility, Dunkirk.
                                 efficient, tri-fuelled LNG vessels into                                                                                                             ©EDF, Philippe Eranian,
                                                                                                                                                                                     LNG Vessel, Italy.
                                 the global fleet. We have capitalised
                                 on the opportunities this represents
                                 by securing our ocean-borne                                              Strengthening our
                                 transport needs on short-term                                            LNG supply base
                                 charters to optimise shipping costs                                      10 new LNG master sales and
                                 for our customers.                                                       service agreements were signed
                                                                                                          in 2014. EDFT now has master
                                                                                                          agreements with the majority
                                                                                                          of the market’s key participants.
                                                                                                          We also secured a number of short,
                                                                                                          long and storage positions that
                                 Matthew Arnold                                                           enhance our flexibility to provide
                                 Global Head of LNG and LPG                                               consistent customer support.                                                                         EDFT enters the LPG market
                                                                                                                                                                                                               In 2014, EDFT entered the LPG
                                                                                                                                                                                                               (liquefied petroleum gas) market.
                                                                                                                                                                                                               This is a natural extension of
                                                                                                                                                                                                               our international ocean-borne
                                                                                                                                                                                                               LNG business and complements
                                                                                                                                                                                                               our positions in US natural gas.
                                                                                                                                                                                                               Production of liquefied gasses in
                                                                                                                                                                                                               North America is growing in tandem
                                                                                                                                                                                                               with shale developments and
EDF Trading Annual Review 2014

                                                                                                                                                                                                                                                      EDF Trading Annual Review 2014
                                                                                                                                                                                                               our involvement in the wholesale
                                                                                                                                                                                                               marketplace gives our global
                                                                                                                                                                                                               customers access to these new
                                                                                                                                                                                                               supply sources.
                                                                                                                                                                                                               We have signed an agreement with
                                                                                                                                                                                                               a leading provider of midstream
                                                                                                                                                                                                               energy services to acquire long-term
                                                                                                                                                                                                               LPG export capacity from terminal
                                                                                                                                                                                                               facilities located on the US Gulf
                                                                                                                                                                                                               Coast. During the year we also
                                                                                                                                                                                                               agreed to supply LPG to an end-user
 38                                                                                                                                                                                                            customer in Asia.                       39
Gas Production

                                 In North America, EDF Trading Resources provides      Opportunities in
                                 gas production services that link with and enhance    the evolving gas market
                                 our midstream and wholesale natural gas activities.   EDF Trading Resources is our                acreage in the Marcellus region that
                                                                                       dedicated North American gas                we acquired in a joint venture with
                                                                                       production business.                        a leading American coal business.
                                                                                       EDF Trading Resources acquired              We expect to commence output
                                                                                       its first gas production assets in          from these wells to coincide with
                                                                                       2012 in East Texas and now has              the development of additional
                                                                                       approximately 500 producing                 liquefaction capabilities in
                                 EDF Trading Resources through the value chain:
                                                                                       wells with proven reserves.                 North America and the assumed
                                 Source                                                                                            wholesale price benefits driven
                                                                                       During the year we gained pad site          by export opportunities.
                                                                                       permits for a number of wells on
                                 EDFT gas producing wells
                                 Joint venture gas producing wells
                                 Third party gas producing wells

                                 Services                                              The key to EDF Trading Resources
                                 Production management                                 is that we add value. It’s what
                                 Asset optimisation                                    makes us a great partner to do
                                 Wholesale market services
                                 Interconnector capacity
                                                                                       business with. We have the skills
                                 Pipeline capacity                                     to help get the gas out of the
                                 Dispatch management                                   ground, the logistics network to
                                 Gas storage
                                                                                       transport it to market, and the
                                 Supply
                                                                                       wholesale marketing expertise to
                                                                                       commercialise its potential.
                                 Wholesale market

                                                                                       Brad Watson
                                                                                       President, EDF Trading Resources
EDF Trading Annual Review 2014

                                                                                                                                                                          EDF Trading Annual Review 2014
                                                                                                                   ©EDFT, Fairfield gas
 40                                                                                                                production Site, Texas
                                                                                                                                                                           41
Gas Production                                                                                          End-to-end services
                                                                                                                                         EDF Trading Resources is founded
                                 Activities                                                                                              on a team of seasoned production
                                                                                                                                         specialists, petroleum engineers and
                                                                                                                                         geoscientists backed by experienced
                                                                                                                                         field operatives.
                                                                                                                                         We initially apply our skills to prove
                                 A growing portfolio                                                                                     the potential of a resource and then
                                 The EDF Trading Resources gas                                                                           manage operations to maximise its
                                 production portfolio was initially                                                                      output. Throughout operations we
                                 founded on acquired gas assets in                                                                       adhere to best-in-sector safety and
                                 the East Texas basin. Those assets                                                                      environmental practices.
                                 consist of around 500 producing
                                 wells, 30,000 acres of mineral                                                                          Once a well is operational the gas
                                 leases and daily net production of                                                                      is flowed along existing pipeline
                                 approximately 20 million cubic feet.                                                                    capacities to areas of greatest
                                                                                                                                         demand. We have access to storage
                                 We have significantly expanded the                                                                      and blending facilities to manage its
                                 portfolio into the Marcellus region                                                                     quality and the support of EDFT’s
                                 through a joint venture covering                                                                        wholesale marketing expertise to
                                 more than 22,000 acres of mineral                                                                       realise its full commercial potential.
                                 leases with one of the largest coal
                                 businesses in the USA.

                                                                                                                                         Comprehensive transportation
                                                                                                                                         EDFT has an extensive North
                                                                                                                                         American gas transportation
                                                                                                                                         network with pipeline agreements
                                                                                                                                         across the USA, Canada and
                                                                                                                                         into Mexico. We are one of the
                                                                                                                                         largest gas storage lessors in the
                                                                                                                                         marketplace and have storage
                                                                        ©EDFT, Fairfield gas
                                                                                                                                         capacity throughout the major
                                                                        production Site, Texas.                                          producing and consuming regions.

                                                                                                  Wholesale marketing support
                                                                                                  Gas production is a close fit with
                                                                                                  EDFT’s asset-backed business
                                                                                                  model. Our activities throughout
EDF Trading Annual Review 2014

                                                                                                                                                                                  EDF Trading Annual Review 2014
                                                                                                  the energy value chain give us
                                                                                                  insights into the dynamics affecting
                                                                                                  the marketplace. Those insights are
                                                                                                  used to leverage positions and add
                                                                                                  value to EDF Trading Resources’
                                                                                                  own assets and those of our joint
                                                                                                  venture partners and third party
                                                                                                  customers through structured
                                                                                                  optimisation, hedging and
                                                                                                  market strategies.

                                                                                                  Brad Watson                            ©EDFT, Fairfield gas
 42                                                                                               President, EDF Trading Resources       production Site, Texas.
                                                                                                                                                                                   43
Coal and Freight                                                                                                        ©EDFT, Coal Terminal,
                                                                                                                                                         Amsterdam.

                                 EDF Trading’s coal and freight business provides     Agility in a challenging
                                 dependable, cost effective support to EDF Group      marketplace
                                 companies and third party customers around the       EDF Trading manages assets at all        On the demand side, a mild winter
                                 world. We have multiple sources of supply, our       the key points in the global coal        in all areas except North America
                                 own fleet of dry bulk carriers, strategic terminal   and freight supply chain. In 2014,       saw volumes to coal-fired power
                                 operations and facilities to store and blend.        this ensured our ability to meet         plants fall. Reduction in coal
                                                                                      our customer commitments                 usage was further exacerbated by
                                                                                      and continue delivering added            growth in renewable and gas-fired
                                                                                      value despite a challenging              energy production.
                                 EDFT through the value chain:
                                                                                      business environment.
                                                                                                                               The EDFT business model provides
                                 Source                                               During the year, changes in              flexibility to accommodate such
                                                                                      market dynamics unsettled the            changes. Having multiple sources
                                 Australia coal mine                                  conventional supply patterns.            of coal supply worldwide, our own
                                 Supply agreements in Australia, Baltic,              Reduced economic growth in China,        fleet of dry bulk carriers, strategic
                                 Columbia, Indonesia, Russia, South Africa, USA       the world’s largest importer of          terminal operations and facilities
                                                                                      coal, resulted in coal from Australia,   to store and blend gives us a clear
                                 Services                                             South Africa, South America and          insight into the way the market
                                                                                      Russia being redirected to South         is behaving. This enables us to
                                 Procurement and supply                               East Asia, India and Europe. In turn,    anticipate trends and structure
                                 Fleet of capesize and panamax dry bulk carriers      this had a negative effect on the        transactions that not only provide
                                 Three coal terminals in Amsterdam                    export competitiveness of coal from      supply security but also enable asset
                                 Access to terminals in USA                           some North American regions.             optimisation for the EDF Group and
                                 Floating cranes                                                                               third party customers.
                                 Railcars and inland barges
                                 Blending and storage
                                 Wholesale market services
                                 Export capacity

                                 Supply

                                 EDF Group power stations
                                 Third party power stations
                                 Industrial users
                                 Commercial users

                                 Our activities along the supply chain
                                 and our global view of the coal and
                                 freight markets give us a unique insight
EDF Trading Annual Review 2014

                                                                                                                                                                                 EDF Trading Annual Review 2014
                                 into evolving trends and marketplace
                                 dynamics. We apply this intelligence to
                                 identify and realise opportunities that
                                 consistently add value to the operations of
                                 the EDF Group and third party customers.

                                 Bert van Druten
 44                              Head of Coal and Freight                                                                                                                         45
Coal and Freight                                                                                                                                                                       Support for customers in Asia
                                                                                                                                                                                                                        EDFT has an office in Singapore
                                 Activities                                                                                                                                                                             from which we manage the supply
                                                                                                                                                                                                                        and wholesale market requirements
                                                                                                                                                                                                                        of our customers in Asia. The office
                                                                                                                                                                                                                        is also the location of our Chubu
                                                                                                                                                                                                                        Energy Trading joint venture
                                 Our own freight fleet                                                                                                                                                                  with Japan’s Chubu Electric
                                 Despite over-capacity in the global                                                                                                                                                    Power Company.
                                 freight fleet, EDFT maintained a                                                                                                                                                       In Australia, our joint venture
                                 near 100% utilisation of its own                                                                                                                                                       Narrabri coal mine is now up
                                 vessels during 2014.                                                                                                                                                                   to full production.
                                 Central to our effectiveness is
                                 that we have continuously refined
                                 our fleet of fuel efficient capesize
                                 and panamax vessels to reflect
                                 changing marketplace needs.
                                 Equally, with our freight origination                                                                  Bert van Druten
                                 office in Singapore and our freight                                                                    Head of Coal and Freight
                                 desk in London, we are ideally
                                 located to support customers and
                                 counterparties around the world.
                                 Working closely with the EDFT coal
                                 desk, our freight team provides                                                                        Increased terminal
                                 services to ensure optimised supply                                                                    activities in Poland
                                 for the benefit of EDF Group                                                                           Our joint venture terminal in
                                 and third party coal customers.                                                                        the Port of Gdansk, which opened
                                 Our position in the marketplace                                                                        in 2013, has had a busy year.
                                 also gives us a good relationship                                                                      The terminal is a dry bulk
                                 platform with charterers and                                                                           distribution centre and plays a
                                 enhances our flexibility to respond                                                                    pivotal role in our ability to reliably
                                 to opportunities particularly                                                                          fulfil the coal and biomass needs of
                                 in China and the Far East.                                                                             the EDF Group and our third party
                                                                                                                                        customers in Poland and across
                                                                         ©EDFT, Coal Freight,
                                                                         Amsterdam.                                                     Central and Eastern Europe.

                                                                                                                                                                                       ©EDF, Konrad Pustola,
                                                                                                                                                                                       Coal plant, Poland.

                                                                                                Terminal operations                                                                                      Active in North America
                                                                                                in Amsterdam                                                                                             In North America, EDFT trades
                                                                                                EDFT’s three coal terminals in the                                                                       physical and financial coal products
                                                                                                Port of Amsterdam provide facilities                                                                     and is one of the largest OTC market
EDF Trading Annual Review 2014

                                                                                                                                                                                                                                                               EDF Trading Annual Review 2014
                                                                                                for storage and blending along with                                                                      participants. We have numerous
                                                                                                logistics for ship reloading and both                                                                    customers and counterparts
                                                                                                barge and rail inland transportation.                                                                    including coal producers, utilities
                                                                                                These assets enable us to meet                                                                           and both physical and financial
                                                                                                EDF Group and third party                                                                                traders. Our coal transportation
                                                                                                customer requirements for coal of                                                                        assets include barging and rail
                                                                                                a guaranteed quality and to deliver                                                                      capacity contracts as well as
                                                                                                on schedule even when traditional                                                                        terminal throughput agreements.
                                                                                                supply sources are disrupted.

                                 ©EDF, Marc Didier,                                                                                                                               ©EDF, Marc Didier,
 46                              Coal storage, France.                                                                                                                            Coal crane, France.
                                                                                                                                                                                                                                                                47
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