Energy Trading portfolio integration
Natural gas trading & optimization
As a result of the NUON / Vattenfall merger all trading activities done from the Nuon N.V. needed to be migrated to the Vattenfall Trading GmbH. This transition included physical trading / customer supply / balance responsibility as well as all financial / proprietary trading. With the analysis and design provided by Novitam the Gas supply and trading portfolio was implemented in a N.V. tax branch in GmbH and balance responsibility from N.V. and GmbH where integrated. With the support of Novitam all operational processes and portfolio optimization processes could continue from Hamburg without any operational disturbances.
In-house banking for energy trading
Implementation FX hedging & trading strategies
To reduce costs of financing and streamline cash management processes, Vattenfall decided to implement an “in-house banking” mechanism to steer all divisions within Vattenfall to use treasury Vattenfall for all financing of trades and deals instead of external bank accounts. And only allow local currencies (EUR) overnight on the internal bank accounts. For Energy Trading this meant that FX hedging principles required major adjustments leading to tailor made hedging strategies with close cooperation between Trading desks / market risk department and controlling.
Novitam provide a platform for both treasury; cash management; trading desks and risk management to discuss consequences and solution directions. After proposing and selecting preferred solution strategies Novitam provided implementation by restructuring FX hedging processes for both trading and control. And introduced daily and monthly reporting capabilities to monitor FX risk and open positions
Internal market for Energy Trading
Restricted market access combined with automated routing
With three trading hubs in three different countries within the Vattenfall Energy Trading organisation the Business Unit trading decided to restrict market access per desk and only allow market access for specific markets and commodities. Allowing all desk to trade internally with the so called “market-acces” trader.
The internal market design provided by Novitam has been the succesful basis of the implementation of the the so called “internal market”. Providing optional and conditional automated rerouting from internal desk via the market access trader to the external market and automated booking of internal trades. Beside automated market access flows, the traders where able to trade internally via the same internal market structure.
MiFID II impact analysis
Stragetic paper and conclusion on implications MiFID II for Energy Trading
With the expand of the catalogue of financial instruments (including emission allowances) and significantly narrow the catalogue of exemptions Energy trading companies like Vattenfall were included in the MiFID regulation. Novitam provided a strategic paper for Vattenfall trading Business Unit with the exploration of threads and opportunities of the MiFID regulations. This also included an extensive and detailed analysis on captital requirements for current and future trading capabilities of Vattenfall Trading BU.