EDF Trading. The wholesale energy market specialist

Transcription

1 EDF Trading The wholesale energy market specialist

2 Contents Who we are EDF Trading Group EDF Trading, Europe/Asia EDF Trading, North America EDF Energy Services, North America EDF Group JERA Trading Who we are EDF Trading Group EDF Trading, Europe /Asia EDF Trading, North America EDF Energy Services, North America EDF Group JERA Trading Specialised services Market access Asset optimisation Hedging and risk management Industrial customer services Energy services, North America Global markets Power, Europe Natural gas, Europe Oil Power, North America Natural gas, North America LNG LPG/NGLs Renewable power, Europe Renewable power, North America Environmental products Coal and freight Who we are Expert capabilities Our culture Compliance and regulation Control environment Risk control Advanced technologies Supporting our local communities EDF Trading 2018 EDF, Philippe Eranian, France. 3

3 EDF Trading Group EDF Trading is a specialist in the wholesale energy markets. We are global, asset-backed and operate from source to supply in wholesale power, natural gas, oil, LNG, LPG, environmental products and coal (through JERA Trading). We are part of the EDF Group, a global leader in low-carbon energies. EDF Trading, Europe/Asia EDF Trading is a leader in the European power and gas markets. We operate on every major hub, have extensive network connections and pipeline capacity and an in-depth knowledge of physical energy flows. We apply our reach, corporate strength and physical and financial market presence to add value to the assets of the EDF Group and our third party customers. In Asia, we are partners with JERA Trading, one of the world's leading coal traders. EDF Trading, North America In North America, EDF Trading is a major participant in the wholesale energy markets. We operate in every market and provide coast to coast coverage of financial and physical products in power, natural gas and NGLs, financial crude oil products and environmental products. Who we are EDF Energy Services, North America John Rittenhouse Chief Executive EDF Energy Services is our North American customer facing operation providing integrated energy management services to commercial and industrial, power generation and retail supply customers. Taking into account a customer s entire energy portfolio, solutions are structured to provide competitive market pricing and to optimise energy usage and generation assets. EDF Trading 2018 EDF, Philippe Eranian, Marc Didier, France. 5

4 EDF Group The EDF Group is involved in every aspect of the energy industry from generation and transmission to distribution and supply. It is A3 rated by Moody s, generates 13.7 billion EBITDA and serves 35.1 million customers worldwide. Of the TWh of power generated by Group businesses, 87% is from carbon-free production. The EDF Group is one of the world s leading electricity companies and has installed capacity across Europe and the Middle East, in North and South America, Asia and Africa. The Group is a major force in the drive to transition the energy mix to carbon-free and renewable production. Climate change, urban expansion and demographic growth are driving big developments in the way people live and work. It is against such a background that the EDF Group blends its 70 years of industry experience with a talent for innovation to create sustainable low carbon energy production. Frédéric Mayoux Chief Operating Officer, Head of Group Integration EDF Group services The Group integration team at EDF Trading works with our trading teams to provide access to the wholesale markets for EDF Group businesses. We offer a wide range of market access, optimisation and risk management solutions that help secure income streams and create added value for the EDF Group s energy assets. The EDF Trading Group integration team works closely with Group businesses to identify if, how and when our wholesale market services can be used beneficially. Where potential for cooperation does exist, we coordinate services with the trading desks to prepare proposals and oversee service implementation. EDF Trading provides all the appropriate accreditations, licences and financial assurances to facilitate wholesale trading of any energy commodity on every important world market. We identify and capture short, medium and long term opportunities to maximise value extraction from flexible assets and we provide hedging strategies to help manage the time, price and liquidity risks inherent in energy commodities. Many team members have joined us from other EDF Group businesses and so bring with them practical and cultural knowledge of the Group. This enables strong cooperation with Group entities and ensures we deliver the right wholesale services. Who we are JERA Trading EDF Trading is a one-third shareholder in JERA Trading, one of the world s largest utility backed physical energy traders. Our joint activities in the coal and freight markets span Asia, the Pacific and Atlantic basins, North America and Europe. Market access Asset optimisation Bespoke structured transactions Multi-commodity, short to long term Analysis and modelling Pricing strategies Hedging services: price, liquidity and weather risk management JERA was established in 2015 as a joint venture between Japan s Tokyo Electric Power Company and Chubu Electric Power Company. In 2017, EDF Trading s coal and freight business was acquired by the company s subsidiary, JERA Trading. JERA Trading has sales of approximately 60 million tonnes of coal per annum, multiple sources of supply, logistics including ocean-going bulk carriers, terminal operations and strategic storage and blending capabilities. In 2017, EDF Trading and JERA entered discussions for a global LNG optimisation joint venture. Market access for Edison and Dalkia EDF Trading has originated a number of agreements for EDF Group businesses, such as Edison and Dalkia, that allow wider market access and improved credit arrangements which, in turn, enhance their supply competitiveness in the marketplace. EDF Trading 2018 EDF, Bruno Ansellem, Patrick Martin, Marc Didier, Marc Caraveo, France. 7

5 Specialised services Specialised services Market access Asset optimisation Hedging and risk management Industrial customer services Energy services, North America EDF Trading 2018 EDF, Marc Metayer, Marc Didier, France. 9

6 Market access EDF Trading provides a gateway to the wholesale energy markets for buyers and sellers of all types of energy products. Our global footprint gives our customers access to over-the-counter (OTC), flow and structured transactions in a range of time frames (intraday, short, medium and long term). Providing market access is our core customer service and we operate on all the important wholesale energy exchanges and broker platforms worldwide. As such, we have in place the agreements, licences, financial assurances, regulatory compliances, IT, business infrastructures and network capacities necessary to trade the full spectrum of energy commodities anywhere and everywhere. Our markets encompass power, natural gas, oil, LNG, LPG/NGLs, coal and freight, renewable energy and environmental products. Wholesale market access Grid scheduling services Interconnector and pipeline capacity Flow desk services Intraday services 24/7 Balancing services for gas and power Virtual power and hydro plant services Provision of energy credits and certificates Bespoke structured transactions, multi-commodity, short to long term Pricing analysis and modelling services Price risk hedging services Weather risk management services Market-making for power and gas options Specialised services Marcello Romano Head of Trading, Europe Philipp Büssenschütt Chief Commercial Officer EDF Trading 2018 EDF, Olivier Pirard, France. 11

7 Asset optimisation EDF Trading structures transactions across all energy commodities, regions and time frames to support the EDF Group and third party customers. We do this to help our customers optimise their assets and fulfil their energy needs in line with operational and business goals. EDF Trading s business model is robust, flexible and extremely well informed using local, regional and global market data. This enables us to identify and capture short, medium and long term opportunities for customers when the commodity markets move, when value chains are disrupted and when the supply and demand balance changes. Asset optimisation Bespoke structured transactions, multi-commodity, short to long term Pricing analysis and modelling services Long term pricing services Hedging services including price, weather and volume Flexibility trading desk We apply sophisticated analytics to identify economic and operational flexibility in an energy asset or contract. We do this for the EDF Group and third party customers to help them maximise the value of optionality in contracts or assets. Whatever the asset or contract type, we seek to understand its flexibility and identify whether there are previously un-used opportunities to optimise the asset and realise its latent value. If such opportunities do exist, using quantitative analysis and bespoke software, we apply modelling to consider different pricing, risk and hedging solutions applicable to the asset, its flexibility and to market requirements. Evaluating the various solutions enables us to define transaction structures linked to oil, power, gas, coal and carbon market strategies, which can ultimately be converted into business advantages. Our expertise in flexible assets is used to enhance revenue streams, manage weather and regulatory risks, help define pricing strategies and realise additional returns from all kinds of energy assets or contracts wherever they sit along the value chain. For medium and longer term optimisation, whatever type of asset we are working with, wherever the asset sits along the value chain, our starting point is to analyse and understand the asset s operational characteristics. This will often identify overlooked opportunities to optimise the asset in the marketplace. Specialised services Structured solutions, multi-commodity, multi-currency EDF Trading is an expert in developing bespoke products for its customers. We recently structured French, German, Dutch and UK dark spread options for power, gas, coal and emissions in both Sterling and US Dollars. Optimisation of asset and contract flexibilities Bespoke multi-commodity derivative structures Short, medium and long term strategies Pricing analysis and modelling Product development and structuring Hedging services including price, weather and regulatory risk Morgane Trieu-Cuot Head of Flexibility Optimisation Hydro power time spread options EDF Trading optimises the medium and long term time value embedded in EDF s Le Lac France hydro power station and virtual pump storage transactions. Three year forward temperature swap In order to hedge the exposure of mild winters on its retail portfolio, EDF Trading has provided EDF s commercial division with a forward temperature swap covering the next three winter seasons. EDF Trading 2018 EDF, Olivier Pirard, Philippe Eranian, France. 13

8 Hedging and risk management From managing price risks to protecting income streams and asset values, EDF Trading is an expert in developing and implementing risk management solutions. We do this for the EDF Group and third party customers around the world and across all types of energy commodities. EDF Trading is ideally positioned to help customers manage the risks inherent in the wholesale energy commodities marketplace. We are a strong and reliable counterparty with a solid financial base and excellent credit rating. We have many years of expertise hedging all types of exposures for the EDF Group and third party customers worldwide. Bespoke structured transactions, single and multi-commodity, short, medium and long term addressing: Price risk Income protection Regulatory exposure Liquidity risk Weather risk Volume risk We structure bespoke transactions that help manage exposures to risks such as price, liquidity, regulatory and weather in the short, medium and long term and across multi-commodities including power, gas, oil, LNG, LPG/NGLs and coal. For renewable energy businesses such as wind and solar generators, we help manage the price risks associated with intermittent output. Specialised services Managing regulatory risk for EDF For EDF in France, we structured a solution to help mitigate the risk associated with new regulations (ARENH) entitling suppliers to purchase nuclear produced electricity from EDF at governed prices. EDF Trading 2018 EDF, Dominique Guillaudin, France

9 Industrial customer services Our flow desk offers an easily accessible, customer centric service. We provide market access for all energy commodities of any size across the short and medium term. The insights we gather through our wholesale market activities provide us with a unique view of the dynamics driving worldwide energy supply and demand which, in turn, underpins our ability to see and realise value in transactions. The flow desk provides services to customers throughout Europe, Asia and North America in natural gas, power, coal and environmental products. Oil desk services We operate on all the principle oil trading hubs across Europe, Singapore and the Americas. Having such broad coverage allows us flexibility to originate and implement additional cross-commodity trading and hedging opportunities. Oil desk services for Edison The EDF Trading flow desk provides oil hedging services for EDF Group company Edison. Managing EDF s oil index exposure The price risks inherent in EDF s oil indexed gas supply contracts are hedged through the EDF Trading oil desk. Specialised services Buying and selling: Power Natural gas Oil LNG LPG/NGLs Coal Environmental products Small to large transaction volumes Short to medium term EDF Trading 2018 EDF, David Morganti, Philippe Eranian, France. 17

10 Energy services, North America EDF Energy Services in North America is changing the face of energy by delivering integrated energy solutions for commercial and industrial retail customers, retail energy providers and generation owners across the US and Canada. We make it easy for clients to do business with us. Focused on service, we created a digital integrated platform to allow transparent views into our customer s energy portfolio which we use to develop holistic solutions that are not only viable, but exciting. Power supply Natural gas supply Environmental products including RECs Hedging transactions Market analysis and information Multi-site, multi-state coordinated data and invoicing Energy management for on-site generation Demand response Power and gas scheduling Real-time 24/7 scheduling ISO interface Commercial and industrial We offer a complete suite of services to energy-intensive retail customers. From energy supply and hedging to on-site generation management and demand response, we work with our customers to provide the best product combination to meet their desired balance of supply security, cost control and revenue enhancement. Retail energy supplier services We provide wholesale market access and ISO interface services to a broad network of retail energy providers with footprints across the deregulated markets. From securing competitive pricing and terms to managing liquidity and hedging needs, we work with REPs to provide services that support their budget and growth goals. Our strength as part of the global EDF Group makes EDF Energy Services a dependable and creditworthy counterparty. Our EDGi customer interface allows customer access to a wide range of data and functionality including market prices, detailed usage information, analytics and invoices. First EDF EV charging station in North America We have launched a pilot programme at Notre Dame University for EDF branded electronic vehicle (EV) charging stations. The stations allow two vehicles to charge simultaneously and enable the University to manage and report energy and GHG emissions savings as well as performance and usage patterns. Specialised services Jason Earnheart Managing Director, Head of Origination, North America Mary Anne Brelinsky President, EDF Energy Services University of Texas aggregation The University of Texas is one of North America s largest institutions for higher education. EDF Energy Services recently entered into an aggregated deal to supply electricity to 13 of its sites over a 10 year period beginning in The deal provides a highly competitive fixed price full requirement product, which gives the University certainty for budget planning and control going forward. EDF Trading 2018 EDF, Philippe Dollo, US. 19

11 Global markets Global markets Power, Europe Natural gas, Europe Oil Power, North America Natural gas, North America LNG LPG/NGLs Renewable power, Europe Renewable power, North America Environmental products Coal and freight EDF Trading 2018 EDF, Philippe Eranian, France. 21

12 Power, Europe EDF Trading is the leading participant in the European wholesale power market. We have capacity on all the major interconnectors and across every significant national and international network. We have been providing wholesale services to benefit the EDF Group and third party customers since our inception in The breadth and depth of our activities across the continent give us insights as to how activities within individual grids affect neighbouring regions and the marketplace as a whole. Employing advanced technologies and intelligent data analysis, we monitor trends such as interconnector capacities, flows and price differentials to identify and capture transaction opportunities and better manage physical and financial risks. Managing ARENH exposures We have developed bespoke risk management structures for EDF in France to help it manage exposure to the ARENH regulation requiring EDF to sell one third of its nuclear production at a governed price. Long term CHP hedging Our German origination team negotiated a long term hedge with a German utility to hedge one of its CHP (combined heat and power) plants. In order to reduce the customer s market price risk, we completed our first long term spark spread transaction with a fixed price from Market access Competitive pricing for supply of power and power related products Asset optimisation services that capture value in CCGT, gas-fired, coal-fired, renewable, pumped storage and hydro reservoir plants Grid scheduling services Balancing services Flow desk services Intraday services 24/7 Virtual power and hydro plant services Provision of Guarantees of Origin Certificates Bespoke structured transactions, multi-commodity, short to long term Hedging services Pricing analysis and modelling services Our capabilities enable us to support the EDF Group and third party customers ranging from power generators to commercial and industrial users, local authorities, utilities and finance houses. We offer comprehensive 24/7 services including physical and financial market access, flow trading, intraday and structured transactions, asset and cross-border optimisation and risk management. For customers with renewable generation assets such as wind and solar, we have developed specific intraday trading services and specialised price risk management solutions reflecting the intermittent nature of renewable production output. Global markets John Grey Head of European Power EDF Trading 2018 EDF, Jean Louis Burnod, France. 23

13 Natural gas, Europe EDF Trading operates on all the major wholesale natural gas hubs across Europe and neighbouring regions. Working for the EDF Group and third party customers, our expertise helps optimise and risk manage a wide range of gas assets including power plants, interconnector capacities, storage and regasification facilities. EDF Trading is one of the largest wholesale natural gas market participants in Europe. Our services for customers range from procurement, supply and logistics to contract management, portfolio analysis, pricing, hedging and reporting. We are asset-backed and trade approximately 3 bcm of transport capacity annually, which enables us to maximise the advantages of locational basis movements for our customers. We are responsible for the commercial operations of the EDF Group s LNG facilities in Dunkirk and Zeebrugge and we also manage commercial operations for 6 TWh of combined storage in the UK, France and Belgium. Our customer base includes producers, generators, downstream aggregators and financial institutions and we have contracts with the vast majority of market participants requiring access services. We also trade complementary global markets such as oil, US natural gas, FX and interest rates, which gives us greater flexibility to hedge embedded risks including time, price and weather. The dedicated EDF Trading flow desk brings together our cross-commodity capabilities into an easily accessible service. It delivers standard transaction market access and execution across a range of volumes in both the short and medium term. Market access services Procurement and supply services Asset optimisation services LNG tanker contracts Access to regasification capacity at European terminals International export agreements Access to gas storage Grid scheduling services Pan-European interconnector capacity Pan-European pipeline capacity Nominations into the European gas network Dispatch management services Flow desk services Intraday services 24/7 Bespoke structured transactions, multi-commodity, short to long term Pricing analysis and modelling services Hedging services Weather risk management services Oil EDF Trading is an active participant in the global oil markets. We operate on all the major trading hubs and provide oil risk management services to oil producers and consumers. Global markets Flexible supply purchases EDF Trading provides price security to natural gas supply customers by offering flexible purchase agreements ranging as far forward as Within these, rather than purchasing a flat volume throughout the period, we buy a predetermined volume at an agreed price while also having flexibility to purchase additional volumes as and when required. LNG hedging collar EDF Trading entered into a financial transaction with a counterparty to hedge its natural gas contract against Brent within a specified price range. By doing this we are able to limit the downside risk for the counterparty. David Brookes Head of European Gas Trading EDF Trading 2018 EDF, Christophe Huret, Olivier Pirard, France. 25

14 Power, North America EDF Trading operates throughout the value chain in the North American wholesale power markets. We provide our customers with products and services that deliver access to power markets, hedge risk and optimise their energy portfolio. EDF Trading is consistently placed in the top tier of Platts Megawatt Daily Power rankings. Our services include wholesale market access and hedging solutions ranging from short term standard products to long term structured transactions. Additionally, we provide congestion management and value added derivative products. Access to wholesale energy markets Competitive pricing for power products Structured products (multi-commodity) Transmission optimisation Congestion hedging Power options Via our sister company, EDF Energy Services, we provide energy management services that encompass scheduling, dispatch, market analysis and risk management all within a single contract. Global markets Power call option for utility A utility serving Southern California approached our team for wholesale market support to hedge against power supply risks related to regional gas delivery issues. In response, we connected the utility and a long standing energy management client with a natural gas fired plant in the Desert Southwest. The utility was able to purchase up to 150 MW on demand in 15 minute increments from the power plant through EDF Energy Services. We optimised this power supply in the market and we assured delivery of 70,000 MMBtu of gas each day to the power plant. EDF Trading 2018 EDF, L8 Filmes, Productora Dr/Visual, France. EDFT, Aric Hoek, Texas, US. 27

15 Natural gas, North America EDF Trading provides customers with comprehensive market access, optimisation, hedging and asset management services for natural gas and natural gas liquids products (NGLs). We operate across North America and are one of the leading wholesale natural gas marketers. EDF Trading s investment grade credit rating and proven upstream and downstream physical capabilities underpin our ability to support customers throughout the value chain. We provide services to optimise assets, hedge commodity price risk and aid in the management of cash flow. We have more than 70 major natural gas pipeline agreements extending throughout the USA, Canada and into Mexico that enable us to manage natural gas offtakes and deliveries to and from customers virtually anywhere across the continent. We manage capacity for gas utilities and exploration and production companies and are a large gas storage lessor. Coordinated energy management services When EDF Energy Services added a 980 MW gas-fired power plant to its portfolio of third-party assets under management, EDF Trading stepped in to fulfil the fuel supply portion of the contract. We managed the client s transition into merchant status and assisted with the implementation of new direct connections with Transco and Tetco pipelines. Supporting our customers across the value chains EDF Trading contracted with a producer to purchase natural gas and transport from the Utica production area of the US. Due to the flexibility of the contract and our relationships throughout the value chain, we can supply EDF Energy Services retail gas customers, fuel their third party power plants, or inject into storage depending on market factors. We serve EDF Energy Services with wholesale fuel supply for its extensive base of natural gas customers including gas-fired power plants, large scale commercial and industrial retail consumers and natural gas retail aggregators. Global markets Access to wholesale natural gas markets Competitive pricing for natural gas products Natural gas asset optimisation Pipeline capacity Interconnector services Freight services for LNG and LPG Storage capabilities for natural gas and NGLs Structured transactions Market-making for gas options Export capacity for LNG and LPG EDF Trading 2018 EDF, Oivier Pirard, Jean Luc Petit, France. 29

16 LNG EDF Trading has been active in the LNG market for over 10 years. As the market interface for the EDF Group, we optimise assets such as power plants and gas retail portfolios across the EDF Group. We have access to regasification capacity at European Terminals: Dunkirk and Zeebrugge. EDF Trading manages and operates third party supply agreements from Australia, the Middle East and the US Gulf and optimises term contracts on behalf of the EDF Group. As an integrated activity, the LNG team manages the physical cargoes, financial hedging and chartering of LNG tankers. With a portfolio of over 100 sale and purchase agreements, we optimise and sell cargoes in the Far East and around the world. Strengthening our relationship with JERA In 2017, EDFT signed a non-binding agreement with JERA for an LNG optimisation joint venture. The intention is to combine the LNG trading and optimisation activities of both companies through JERA Trading which will become the exclusive LNG optimiser for JERA and the EDF Group and manage short term optimisation activity in the LNG markets. Marcello Romano Head of Trading, Europe Julien Bourdeau Head of LNG Trading Wholesale market access services LNG logistics Access to loading, unloading and storage facilities Gas grid scheduling services Interconnector and pipeline capacity for gas Flow desk services; dedicated customer interface for gas products in the short and medium term Intraday services 24/7 Bespoke structured transactions, multi-commodity, short to long term Pricing analysis and modelling services for managing risk Balancing services for gas Global markets EDF Trading is also one of the five most active players on the expanding JKM swaps market. Dunkirk LNG terminal EDF Trading actively manages and optimises commercial operations at the EDF Group s Dunkirk LNG terminal. Recent activities include the provision of two LNG cargoes on a spot basis and the management of eight LNG cargo deliveries. We have also generated significant savings for the Group s storage costs through collaboration with EDF s commercial division and both Electricité de Strasbourg and Edison Group companies. EDF Trading 2018 EDF, Jean Louis Burnod, France. 31

17 LPG/NGLs EDF Trading provides a fully integrated origination, trading, optimisation and logistics operation. We source LPG/NGLs across North America and the Middle East to support customers worldwide with risk managed, asset-backed, physical supply solutions. Wholesale market access Global logistics Terminal operations Access to storage facilities Pipeline capacity International export agreements Asset optimisation solutions Hedging solutions LPG EDF Trading s experience in managing global supply and demand has enabled our rapid growth in the wholesale LPG market complementing our existing position as a leading participant in the LNG marketplace. Our financial credibility combined with the added security of being part of the EDF Group means that EDF Trading is very well resourced to support upstream LPG businesses. In addition to providing physical market access services, we also offer a range of tailored financial solutions allowing for asset optimisation and hedging of price risk. Global markets To support our downstream customers we have an ocean-going logistics operation that enables us to respond quickly to supply opportunities affected by changing market dynamics. Natural Gas Liquids (NGLs) We handle the full range of liquefied gasses including propane, butane and natural gasoline and deliver worldwide to Asia, including China, Japan, Korea and India, the European basin, Mexico, Central and South America. From North America to Asia EDF Trading entered the LPG market in May 2014 with a long term export capacity agreement from the US Gulf Coast and a complementary supply agreement for a significant customer in Asia. EDF Trading 2018 Peter Thompson Head of LPG Trading EDF, Aric Hoek, Texas, US. 33

18 Renewable power, Europe For renewable generators, in addition to market access, we also offer a range of optimisation and risk management solutions tailored to the unique business dynamics associated with intermittent output. Our extensive coverage of the European grid enables us to ensure market access for all types of renewable generation assets including wind, solar, hydro and battery storage facilities. Pan-European market access including: Output scheduling Dispatch services 24/7 intraday services Flow desk services Market analysis Hedging services including long term fixed price or minimum price agreements As well as physical access services, we offer various financial risk management solutions that allow for the hedging of an asset s long term price risk such as structuring long dated agreements to secure either a fixed price or a minimum price for future power outputs. EDF Trading is one of the few market participants with a mandate to provide up to a 10 year fixed price hedge. Global markets Support for EDF Agregio Agregio, the specialist EDF Group subsidiary, was established to support renewable energy producers and consumer businesses that can adapt their pattern of consumption to make use of renewable energy. EDF Trading works closely with Agregio providing wholesale market access and risk management solutions. EDF Trading 2018 EDF, Chapman Brown Photography, Rodolphe Jobard, France. 35

19 Renewable power, North America Our energy management and scheduling services can be applied beneficially to optimise intermittent output assets including renewable generation and battery storage facilities. The integrated digital platform at the heart of EDF Energy Services customer offering enables the flexibility required to optimise the intermittent output of renewable power assets of varying sizes and diverse locations. We provide a range of services such as output scheduling, dispatch, market analysis and hedging. We currently manage over 2,800 MW of wind and solar generation including eleven EDF Renewables sites. We manage two high profile battery customers and seven hydro plants in the Mid-Atlantic and Northeast US. Wholesale market access, including RECs and carbon credits Asset optimisation Output scheduling Dispatch Market analysis Hedging EDF Energy Services also sources and supplies RECs to commercial and industrial and retail aggregator customers to help them meet their regulatory and volunteer sustainability goals. Global markets Long term security for renewable supply EDF Trading North America executed a strategic 10+ year transaction to supply power and RECs to one of the country s largest cooperatives in the Northeast US helping them meet their power supply and sustainability goals. EDF Trading 2018 EDF, Frederic Neema, Philippe Dollo, France. 37

20 Environmental products EDF Trading offers a range of multi-commodity structured solutions that help EDF Group businesses and third party customers around the world achieve their environmental goals. EDF Trading is part of the EDF Group, which is Europe s leading renewable generator and a global champion for the transition to a low-carbon generation mix. As such, we continue to evolve our environmental services to reflect market developments and better serve the needs of EDF Group businesses and third party customers. We are a major participant in the compliance and voluntary carbon markets and a significant provider of renewable energy solutions globally. Our products include Guarantees of Origin Certificates (GOs) in Europe, RECs in the US, and International Renewable Energy Certificates (I-RECs) around the world. Carbon risk management services GOs, Europe RECs, US I-RECs (International Renewable Energy Certificates) Weather risk management services Guarantees of Origin We have supplied energy from renewable generation sources along with accompanying EU Guarantees of Origin Certificates to help UK retail supply customers with their regulatory renewable obligations. EDF Trading can source renewable energy certificates as part of a structured wholesale product mix for commercial and industrial customers where the markets allow them. Similarly, where appropriate to the marketplace, we can often supply energy from renewable generation sources to help customers enhance their green credentials. Global markets Carbon credits EDF Trading supports a number of EDF Group retail businesses and third parties with carbon credits to help them meet the needs of customers seeking to purchase carbon neutral gas or offset their carbon footprint. EDF Trading 2018 EDF, Dominique Guillaudin, Chapman Brown Photography, Guillaume Murat, France. 39

21 Coal and freight Our partner JERA Trading has multiple sources of coal supply worldwide, global logistics capabilities and terminal operations strategically located to optimise supply and demand services. JERA Trading can source, procure, ship, store, blend and deliver coal wherever and whenever the need exists. EDF Trading is a one-third shareholder in the JERA Trading global coal optimisation and procurement joint venture. Wholesale market access Procurement and supply Global logistics including: Ocean-going dry bulk carriers Inland barges Railcars Terminal operations in Europe, Asia and North America Blending capabilities Storage facilities Asset optimisation services Hedging services Partners in supply security In April 2017, EDF Trading sold its coal and freight business to JERA Trading in return for a one-third equity stake in JERA Trading. JERA Trading is a world leading utility-backed coal trader with a major presence in both the Atlantic and Pacific basins and total physical coal sales of approximately 60 million tonnes per annum. JERA Trading s approach is to leverage its substantial contractual portfolio across Asia, Europe and North America to increase security of supply and create significant value for shareholders. Operating from headquarters in Singapore and offices in London and North America, JERA Trading manages assets and supports customers at all the key points in the global coal and freight value chain. The insights gained from these activities give us a clear view as to the way local, regional and international markets behave. Such knowledge underpins the structured transactions we use to help customers not only increase security of supply but, by extension, also contributes to optimising and risk managing their assets. JERA Trading has access to facilities at coal terminals in the Port of Amsterdam in Holland for storing, blending and reloading. These enable JERA Trading to efficiently serve customers across West, North, Central and Eastern Europe. Similarly, from its office in Singapore and terminal usage agreements, JERA Trading manages the coal and freight requirements of customers throughout Asia. Global markets EDF Trading 2018 EDFT, Richard Leeney, UK. 41

22 Expert capabilities Our culture Compliance and regulation Control environment Risk control Advanced technologies Supporting our local communities Expert capabilities EDF Trading 2018 EDF, Laurent Vautrin, France. 43

23 Our culture EDF Trading is a global team of around 800 people with expert skills and a multitude of talents. We are customer focused, service orientated and proud of our ability to consistently meet or exceed the expectations of the EDF Group and third party customers. We thrive on finding solutions and pride ourselves on our professionalism, flexibility and understanding. Whilst we are innovative in our approach and welcome individuality, the nature of our business requires that we are also highly disciplined and behave with the utmost integrity. We employ people from all over the world with the best skills in every position. Every employee has a level of responsibility in their role, each has the authority to act within a defined remit and every one of us is expected to be accountable for our actions. Such diversity and cultural strength is a critical factor in our ability to deliver a consistent first class service for internal and external customers worldwide. EDF Trading is an integrated community of skills and talent including: Trading experts Quantitative analysts Hydro analysts Meteorologists Mathematicians Statisticians Engineers Physicists Economists Accountants Lawyers Tax specialists Risk professionals Originators HR professionals Fundamental analysts Data scientists / analysts Information security experts Compliance experts Credit experts Finance specialists IT developers Expert capabilities John Rittenhouse Chief Executive Daren Woods Global Head of Human Resources EDF Trading

24 Compliance and regulation EDF Trading fully supports the need for a consistent, comprehensive and effective regulatory framework. As such, wherever in the world we operate, we commit to the very highest standards of professional behaviour and conduct our business in line with all the applicable laws and regulations. EDF Trading is headquartered in London and, through its subsidiary EDF Trading Markets Limited, is authorised and regulated by the Financial Conduct Authority (FCA). Our compliance team integrates with our operational and trading functions to ensure that the practice of compliance remains central to our culture and is recognised by all staff. The energy market regulatory landscape continues evolving to create greater consistency and transparency across all jurisdictions. Working closely with colleagues in the EDF Group, our regulation team is active in market reform discussions and has established dedicated processes to ensure we conform as new rules and regulations are introduced. Accordingly, we have refined or established ways of working, systems and IT functionality to ensure that we, our customers and partners remain compliant in all our dealings. Expert capabilities Robert Quick General Counsel Peter Bonner Head of Compliance, Europe / Asia EDF Trading 2018 EDF, Philippe Eranian, France. 47

25 Control environment Financial stability, robust liquidity and effective management controls are fundamental to the way EDF Trading conducts business. Such disciplines make us a dependable partner and define the parameters within which we act to capture opportunities, create value and mitigate risk for the EDF Group and third party customers. Justin Rowland Chief Financial and Risk Officer EDF Trading operates from a well-managed position of financial stability and control, as evidenced by our Baa2 credit rating from Moody s. At the end of 2017 we had more than 4.7 billion available liquidity, a balance sheet with 2.5 billion total equity and 13.5 billion in assets. EDF Trading is a 100% subsidiary of the global EDF Group, which is rated A3 by Moody s. The robustness of our liquidity position is constantly assessed to ensure the adequacy of our funding. EDF Trading is supported by the EDF Group and through a cash pooling agreement, a long term loan and a 2.0 billion back-up credit facility. Around the world, in all our operations we work within a consistent framework of business controls encompassing strong processes, rigorous governance, systematic risk and control reviews and a continuous approach to improvement. The framework itself is also regularly assessed and revised. Expert capabilities EDF Trading

26 Risk control The EDF Trading approach to controlling risk is comprehensive and coordinated wherever in the world we operate. Our systems, procedures and processes ensure that all our activities are conducted within carefully defined boundaries of what is acceptable practice and consistent with our shareholder s risk appetite. Controlling risk effectively is a cornerstone of the EDF Trading culture. As such, we have comprehensive risk mitigation procedures in place for all our business activities. A continual risk review is embedded into our operational practices to allow analysis of the risk in every transaction and enable its dynamic management. In addition, our front office risk team applies proactive qualitative analysis of the positions taken by our trading desks that may not be reliably assessed by standard quantitative tools. Fundamental to our control of market risk is the imposition of stop-loss, Value-at-Risk (VaR) and volumetric limits. These are complemented by additional techniques to assess the profit and loss impact of extreme movements in our portfolio s underlying variables. Counterparty risk is reviewed and monitored to ensure full compliance with our Know Your Customer processes. Similarly, our corporate and industry risk exposure is reviewed at a global portfolio level. We also have dedicated experts within our IT team managing cyber security at policy, architectural and operational levels. Expert capabilities John Flynn Head of Front Office Risk EDF Trading 2018 EDF, Jean-Luc Petit, France. 51

27 Advanced technologies Developing, enhancing and innovating our use of IT is a continuous process at EDF Trading. We are always looking for the next refinement that will further our capabilities and add value to the businesses of our customers and partners. As energy markets become ever more sophisticated, we use the insights gained from our global activities to help structure our systems, thereby ensuring our IT platform is relevant and easy to access for our trading teams. Our in-house IT teams in Europe and North America are evolving our core energy trading and risk management systems. These systems support and manage the portfolio of products we trade from initial trade capture through to final settlement. Our IT teams have a diverse array of skills ranging from agile development experts who are closely aligned with our trading teams, data scientists who are working to leverage insights gained, through to information security experts who implement processes and system enhancements protecting our business against potential security threats. EDF Energy Services in North America has developed a fully integrated digital platform encompassing customer acquisition and deal capture, enhanced billing of a varied portfolio of energy products, mobile device integration to management applications and bid-to-bill tools to facilitate extensive management functionality of generation assets. Customers have secure access to their energy portfolio including usage, invoices and performance via the EDGi web portal. This portal facilitates access to meaningful information for our customers that includes market pricing, energy news and daily market reports. Expert capabilities Andy Rollinson Chief Information Officer Europe/Asia EDF Trading

28 Supporting our local communities In ways big and small, we are proud to give time and effort to support charitable causes and the local communities in which we operate. DePelchin holiday project The DePelchin Children s Centre has a special place in the hearts of our Houston team in that it provides support for children s well-being with a focus on mental health, foster care and adoption services. Our people have generously donated clothes, healthcare items and gifts such as bicycles and toys throughout the year for presentation to the children during the holidays. Business skills for Pilotlight EDF Trading and individual senior managers in the UK have been working with the Pilotlight charity for more than a year. Pilotlight acts as a catalyst in applying the skills of volunteer senior business people, known as Pilotlighters, to help other charities develop into more sustainable and efficient organisations. The volunteer Pilotlighters draw on their professional expertise in areas such as planning, governance and marketing to support the efforts of charities as wide ranging as a women s refuge, an ecology centre, a theatre group and community programmes for people with learning difficulties. Expert capabilities Swim Across America EDF Trading is proud to be a corporate sponsor of Swim Across America. Founded in 1987, the charity is dedicated to raising money and awareness for cancer research, prevention and treatment. With the help of countless volunteers, including past and present Olympians, it organises and hosts sponsored swimming events across the US to support the cause. EDF Trading 2018 Dan Burns, Swim Across America - Greenwich, CT. 55

29 EDF Trading Global Headquarters 80 Victoria Street London SW1E 5JL United Kingdom Tel: +44 (0) Fax: +44 (0) EDF, Fluxys LNG, Frederic Neema, Dominique Guillaudin, France.