EDF Trading Annual Review 2014
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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.
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
EDF Trading Annual Review 2014
EDF Trading Annual Review 2014
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
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
EDF Trading Annual Review 2014
EDF Trading Annual Review 2014
opportunities for future
business developments.
John Rittenhouse
Chief Executive, EDF Trading
6 7
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
EDF Trading Annual Review 2014
EDF Trading Annual Review 2014
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
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.
EDF Trading Annual Review 2014
EDF Trading Annual Review 2014
10 11
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
EDF Trading Annual Review 2014
EDF Trading Annual Review 2014
12 13
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.
EDF Trading Annual Review 2014
EDF Trading Annual Review 2014
14 15
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
EDF Trading Annual Review 2014
EDF Trading Annual Review 2014
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
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
EDF Trading Annual Review 2014
EDF Trading Annual Review 2014
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 19Power – 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
EDF Trading Annual Review 2014
EDF Trading Annual Review 2014
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.
21Natural 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.
23Natural 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 25Power 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 27Power – 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.
29Natural 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.
31EDF 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 33EDF 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 35LNG 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 37LNG 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. 39Gas 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
41Gas 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.
43Coal 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 45Coal 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.
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