Energy Trading and Risk Management Training Course

Participants can distinguish the market structures and price conventions of major energy commodities.

• Crude oil benchmarks, quality differentials, freight and refinery economics
• Natural gas hubs, pipeline constraints, LNG pricing and storage value
• Power market pricing through marginal generation, congestion and balancing
• Coal, emissions allowances and renewable certificates within energy portfolios
• Spot, prompt, forward and seasonal market conventions by commodity
• Cross-commodity relationships between fuel costs, power prices and emissions

Participants can identify commercial terms that create pricing, volume and delivery risk.

• Contract pricing clauses using fixed, indexed, formula and hybrid structures
• Delivery terms, Incoterms, nomination rules and title-transfer provisions
• Volume tolerances, take-or-pay clauses and imbalance settlement exposure
• Quality specifications, testing procedures and price adjustment mechanisms
• Force majeure, curtailment and change-in-law allocation between parties
• Review contractual optionality embedded in supply, storage and transport agreements

Participants can explain how energy derivatives alter physical and financial risk exposures.

• Forwards, futures, swaps and exchange-traded contract settlement mechanics
• Options, caps, floors and collars for asymmetric price protection
• Calendar spreads, crack spreads and spark spreads in trading portfolios
• Basis swaps managing hub, location, quality and delivery-period differences
• Margining requirements, variation margin and clearing house default protection
• Match derivative tenors and volumes to underlying physical exposures

Participants can construct and validate forward curves for energy transaction pricing.

• Forward curve purpose in valuation, hedging, budgeting and risk reporting
• Exchange settlements, broker quotes, assessments and observable market inputs
• Bootstrapping monthly, quarterly and annual contracts into pricing curves
• Interpolation methods for non-standard delivery periods and contract dates
• Discount factors, collateral rates and present-value calculation conventions
• Curve governance: source hierarchy, approvals, overrides and validation evidence

Participants can price physical energy deals using indices, differentials, costs and contractual terms.

• Index-based pricing formulas with publication lags and averaging periods
• Calculate location differentials using transport, congestion and basis components
• Storage economics from injection, withdrawal, inventory and capacity constraints
• Freight, losses, insurance and terminal charges within delivered-price calculations
• Shape factors and load profiles in electricity supply pricing
• Document pricing assumptions, units, currencies and conversion factors clearly

Participants can build position views and explain daily realised and unrealised profit and loss.

• Long and short position aggregation by commodity, location and period
• Open exposure versus closed exposure under physical and financial contracts
• Mark-to-market valuation using current forward curves and discount factors
• Daily profit and loss attribution: price, volume, basis and time
• Separate realised profit, unrealised profit and accounting adjustments
• Reconcile trader estimates with independent valuation and finance records

Participants can measure energy market risk using sensitivity, value at risk and stress methods.

• Price sensitivity metrics for absolute, relative and basis price movements
• Value at risk using historical simulation, parametric and Monte Carlo methods
• Confidence levels, holding periods and data windows for VaR
• Stress testing with market shocks, curve shifts and correlation breakdowns
• Scenario analysis for supply disruption, extreme weather and demand shocks
• Backtesting VaR results against actual daily trading profit and loss

Participants can identify non-flat-price exposures that standard hedges may leave open.

• Basis risk between traded benchmarks and physical delivery locations
• Volume risk from demand uncertainty, outages and contractual tolerances
• Shape risk from hourly, daily and seasonal consumption patterns
• Profile risk when hedge volumes differ from actual load curves
• Cross-commodity exposure between fuel inputs, power outputs and emissions
• Quantify residual risk after benchmark futures and swap hedges

Participants can design and assess hedges against identified energy price exposures.

• Define hedging objectives, protected exposures, horizons and acceptable residual risk
• Select fixed-price, swap, option and collar hedge structures
• Hedge ratios based on volume forecasts, correlations and budget certainty
• Layered hedging schedules for staggered procurement and production commitments
• Compare hedge cost, liquidity, downside protection and opportunity cost
• Record hedge decisions, delegated authorities and execution evidence

Participants can assess counterparty exposure and apply collateral protections to trading relationships.

• Counterparty credit assessment using financial statements, ratings and payment behaviour
• Potential future exposure from market movements and contract maturities
• Credit limits by counterparty, product, tenor and unsecured exposure
• Collateral thresholds, independent amounts and minimum transfer amounts
• Margin calls, dispute procedures and collateral valuation controls
• Wrong-way risk where counterparty credit deteriorates with commodity prices

Participants can interpret contractual protections and escalation points within energy trading agreements.

• ISDA Master Agreement structure for over-the-counter derivatives documentation
• EFET General Agreement provisions for European energy trading transactions
• Confirmation terms defining product, volume, price, delivery and settlement
• Netting, close-out valuation and termination event consequences
• Credit support annex terms governing eligible collateral and haircuts
• Legal review triggers for unusual optionality, guarantees and jurisdiction clauses

Participants can design controls that reduce operational loss across the energy trade lifecycle.

• Deal capture controls for authorised traders, approved products and limits
• Independent trade confirmation matching price, quantity, dates and counterparties
• Master data governance for counterparties, products, units and settlement instructions
• Exception reporting for late deals, amendments, cancellations and overrides
• Reconciliation between ETRM records, broker statements and general ledger
• Operational loss event analysis using root-cause and corrective-action methods

Participants can establish risk governance linking mandates, limits, monitoring and escalation.

• Risk appetite statements translated into measurable trading risk limits
• Position, VaR, stop-loss and concentration limits by portfolio
• Limit utilisation monitoring with breach alerts and escalation thresholds
• Risk committees, delegated authorities and independent challenge responsibilities
• New product approval covering valuation, operations, legal and accounting
• Model governance for curve construction, risk metrics and assumptions

Participants can evaluate whether an energy hedge can qualify for IFRS 9 hedge accounting.

• IFRS 9 hedge accounting objectives and qualifying relationship requirements
• Cash flow hedges for forecast energy purchases and sales
• Fair value hedges for fixed-price contracts and recognised commitments
• Hedge documentation: risk management objective, ratio and effectiveness method
• Cost of hedging treatment for option time value and forward elements
• Sources of ineffectiveness from basis, volume, timing and credit risk

Participants can support independent valuation and financial reporting for energy trading portfolios.

• Independent price verification using approved market data and tolerance thresholds
• Fair value hierarchy under IFRS 13 for observable inputs
• Valuation adjustments for credit, funding, liquidity and model uncertainty
• Month-end close controls for accruals, settlements and unrealised valuation
• General ledger interfaces for trading revenue, margin and collateral
• Management reporting linking market exposure, valuation and financial performance

Participants can forecast liquidity requirements arising from trading, collateral and physical operations.

• Cash flow timing from settlements, margin calls and collateral movements
• Liquidity-at-risk analysis for stressed commodity price and volatility movements
• Funding needs created by long-dated hedges and clearing obligations
• Collateral optimisation across cash, letters of credit and eligible securities
• Treasury coordination for credit facilities, cash buffers and funding triggers
• Liquidity contingency plans for exceptional margin and settlement demands

Participants can produce decision-ready reports connecting commercial positions, valuation and risk.

• Portfolio aggregation across physical contracts, derivatives and structured transactions
• Risk reporting by commodity, location, tenor, business unit and counterparty
• Waterfall charts explaining daily and monthly profit and loss movements
• Risk dashboards showing limits, VaR, stress loss and collateral exposure
• Management commentary distinguishing market movements from trading performance
• Report design for traders, executives, finance teams and risk committees

Participants can assess emerging trading exposures associated with decarbonisation and changing market design.

• Renewable generation intermittency, capture prices and balancing cost exposure
• Power purchase agreements: volume, profile, curtailment and credit risks
• Carbon allowance pricing, compliance obligations and policy-driven volatility
• Battery storage economics, dispatch decisions and merchant revenue uncertainty
• Hydrogen contracts, certification attributes and immature market pricing
• Transition scenarios affecting asset values, demand forecasts and hedge assumptions

Participants can build, review and present a complete energy trading portfolio valuation, hedge and risk management report.

• Consolidate physical contracts, derivatives, market data and counterparty information
• Construct forward curves and value the assigned energy portfolio
• Calculate positions, daily profit and loss, VaR and stress losses
• Assess basis, volume, liquidity, credit and operational risk exposures
• Propose hedge actions, limits, collateral measures and governance responses
• Present portfolio findings with assumptions, controls and management recommendations