Prices in many commodity and energy markets rose to multi-year highs in 2017, along with increased hedging activity. Traders also reported that corporate customers were becoming more sophisticated in their use of hedging; many entered the hedging market for the first time, while others were using more complex hedging structures. Despite this, margins remain under pressure, putting the emphasis on ingenuity and innovation to substitute for staff and funding.
We’ve seen particular innovation in the renewables market, driven by the looming withdrawal of subsidies in Europe, constant technical innovation across the industry – whether cheaper generation, cheaper storage, or more sophisticated grid management – and continuing public demand for a decarbonised energy industry.
Coal will be gone in several European countries by 2027, and the Sierra Club’s Beyond Coal campaign in the US is celebrating the planned retirement of half the country’s coal generation fleet – and taking aim at the other half.
But this area, even more than the rest of the energy and commodity sector, has also seen complex and rapidly changing regulatory requirements, posing a real challenge for everyone operating in it.
There has been real progress on the technical side as well, as the 2018 Energy Risk Software Rankings reflect. Cloud-based trading risk management services are being rolled out around the world, the shift to electronic trading for commodities continues, artificial intelligence and machine-learning systems are growing in popularity and power, and many banks and trading houses are pushing blockchain-based trade and post-trade processing systems towards proof-of-concept stage. These, it is hoped, will radically improve the speed and efficiency of commodity trading, as well as addressing know-your-customer and anti-money laundering requirements, trade finance and many business operations.
Clearly the energy and commodity sectors are changing faster than ever before, and the 2018 Energy Risk Awards recognise the players in the energy and commodity risk management fields that are out in front of this wave of change. Derivatives house of the year goes to Macquarie, with BNP Paribas picking up the awards for innovation, base metals and precious metals.
The awards were judged by a panel of industry experts, with the exception of the derivatives house of the year, weather, coal and precious metals awards, which were judged by Risk.net editorial.
See below for the list of winners. Winners’ articles to follow.
Derivatives house of the year
Deal of the year
Engie Global Markets
Electricity house of the year
Engie Global Markets
Coal house of the year
Javelin Global Commodities
Emissions house of the year
Weather house of the year
Sompo Global Weather
Base metals house of the year
Precious metals house of the year
Commodity broker of the year
Consultancy of the year
Hedging advisory firm of the year
Aegis Energy Risk
CTRM software house of the year
Data house of the year
Technology advisory house of the year
Innovation of the year
Newcomer of the year