Minimising exposure to price risk

“ICIS has delivered high-value qualitative insights to the European natural gas market for more than three decades. Their price assessments and indices are widely used as benchmarks across the industry. The breadth of ICIS coverage allows Dalkia to understand the complex dynamics that drive European gas prices. Our team trusts ICIS expertise: their expert editors and analysts provide unique and accurate insights, which is particularly important when prices appear out of line with market dynamics.”


Pierre Blanchard
Front Office Manager – DME – Direction des Marchés de l’Energie
 
 
 
 

ABOUT DALKIA

 
Dalkia is one of France’s leading providers of energy services and heating and cooling networks, specialising in developing, building, and operating bespoke systems that enable cities and companies to grow sustainably. It has an ongoing need to hedge energy purchases on behalf of large industrial customers. ICIS is a critical partner, providing a detailed and integrated view of the gas and LNG market dynamics. Dalkia uses our technical analysis and market insight to inform its purchasing strategies on a daily basis.

Dalkia is a key player in the drive to create energy services fit for the future. This transition is improving energy performance while simultaneously reducing dependence on fossil fuels and diversifying energy production.

As part of the EDF group, the company focuses on developing alternative renewables, optimising energy efficiency, and reducing conversion and distribution losses in the energy chain. It offers innovative solutions that decentralise production, manage demand, and conserve global resources.

With a growing international presence, Dalkia helps its customers implement energy transition by drawing on localised green resources such as biomass, geothermal, biogas and recovered energy.

Dalkia trades and hedges large gas contracts on behalf of clients, ensuring security of supply and protecting against price volatility.

MITIGATING RISK

In order to mitigate risk when hedging positions, the front office team at Dalkia needs to have visibility on and understand price drivers in the European gas market. These include the dynamics of supply and demand, forward price trends, and the effects of international LNG flows.

Daily technical analysis from ICIS helps Dalkia identify trends in market fundamentals, and gain an overview of all factors influencing prices.

DAILY LNG ALERTS

Dalkia does not deal with LNG but relies on the ICIS daily alerts on LNG cargo flows to support the company’s real-time understanding of LNG supply to the European market.

Additionally, ICIS editors give context and meaning to European gas market dynamics, which is particularly important when these seem at odds with supply and demand fundamentals. For example, during the coronavirus crisis, Norway and Russia released high volumes of gas despite drastically reduced demand. ICIS analysts showed that Ukrainian storage capacity could be used to absorb some of the excess and prevent prices from dipping to the lows some commentators predicted.

Working with ICIS gives Dalkia:

 

  • Access to unparalleled expertise from the largest team of European LNG / gas editors and analysts for a unique view of integrated energy markets
  • A single, consolidated view of price trends and events across the gas and LNG market all in one place to save time
  • Daily delivery of the most up to date data and insight to minimise exposure to price risk and strengthen negotiation positions