Energy Trading and Risk Management (ETRM)

INTERNATIONAL TRAINING ON ENERGY TRADING AND RISK MANAGEMENT (ETRM)

COURSE BACKGROUND

The global energy landscape is undergoing profound transformations, driven by burgeoning demand, the push for diversified energy portfolios, and increasingly stringent environmental regulations. This complexity necessitates a new generation of specialists with deep domain knowledge in the energy space to navigate its significant challenges and facilitate the transition into a “new-energy” age.

ECAS Institute understands this critical need and has designed this course to impart fundamental concepts essential for success in banking, commodity, and energy companies. We aim to demystify the intricacies of Energy Trading and Risk Management (ETRM), breaking down complex concepts into easily digestible pieces to ensure maximum learning and practical application.

This training offers a simplified yet comprehensive approach to understanding the ETRM industry’s dynamics. Participants will gain insights into energy markets, commodity trading, deal lifecycle, risk management, master agreements, regulatory frameworks, and back office operations. By providing practical tools, quizzes, and industry expert perspectives, ECAS seeks to empower professionals and aspiring specialists to thrive in this vital sector.

COURSE OBJECTIVES OF THE TRAINING

Upon completion of this course, participants will be able to:

Gain a foundational understanding of energy markets and the diverse commodities traded.
Explain key concepts of commodity trading and the features of different contract types.
Understand the life cycle of an energy trading deal and the roles within a trading organization.
Identify and analyze various energy market risks, particularly price risk, and means of managing them.
Comprehend the key principles and practices of Master Agreements in energy trading.
Navigate the complex regulatory landscape of energy trading, including REMIT, MiFID II/MiFIR, EMIR, and MAR/CSMAD.
Understand the crucial role and main tasks of Back Office operations in an energy trading business.

WHAT YOU WILL LEARN

This course is specifically designed to impart you with the fundamental concepts to thrive and succeed in banking, commodity, and energy companies and get your foot in the door of the world of ETRM – Energy Trading and Risk Management. The course simplifies and breaks down complex concepts into easily digestible pieces to ensure maximum learning in an entertaining manner. You will learn:

The development and structure of energy markets, including oil, natural gas, electricity, coal, and carbon emissions trading.
Key concepts of commodity trading and various contract types.
The life cycle of an energy trading deal, detailing organizational structure and operational tasks at each stage.
Energy market risks, including price, delivery, operational, credit, and regulatory risks, and their management.
The principles and practices of Master Agreements used in energy trading for standardization and simplification.
The complex landscape of energy market regulation, including REMIT, MiFID II/MiFIR, EMIR, MAR/CSMAD, and their impact.
The principles and practicalities of Back Office operations in an energy trading business.

The course includes focused cheat sheets to solidify learning, quizzes (multiple choice questions) to consolidate knowledge, and access to podcasts with industry professionals from a wide range of backgrounds within the energy sector.

DURATION AND PROGRAM

This is a structured training course designed to be completed ideally within 3 months. However, participants will receive lifetime access, allowing them to learn at their own pace. The program combines simplified explanations of complex concepts, focused cheat sheets, quizzes, and podcasts with industry professionals. The detailed module breakdown and learning resources will be accessible upon registration.

TARGET PARTICIPANTS

This course is designed for a wide range of professionals and individuals seeking deep domain knowledge within the energy space, specifically in ETRM. This includes:

Business Analysts / Consultants involved in the ETRM industry.
Financial Analysts needing to understand financial risks in commodity/energy firms.
Consultants & Analysts looking to demonstrate nuances of commodity value chains and risks.
Junior Traders seeking early career knowledge.
Trade Support Staff wanting to understand trading processes and documentation.
Students pursuing careers in the energy/commodity supply chain industry.
Teachers needing real-life industry examples.
Energy Job Candidates looking to quickly brush up skill sets for interviews.

TRAINING MODULES

The course is divided into seven comprehensive modules, systematically covering the critical aspects of Energy Trading and Risk Management:

No	Module	Details
1.	Energy Markets	This module provides an introduction to the evolution and structure of global energy markets, laying a foundation for understanding the different commodities and trading dynamics. The key topics include: Development of oil spot markets and liberalization of gas/electricity markets. Emergence of gas and power trading markets in Europe. Development of coal trading and the EU Emissions Trading Scheme (EU ETS). Overview of key energy commodities: crude oil, natural gas, electricity, coal, carbon emissions. Market participants and their roles.
2.	Commodity Trading	This module explains the fundamental concepts of commodity trading and the characteristics of various contract types and financial instruments used in energy markets. The key topics include: Key concepts: spot trading, futures, forwards, options, swaps. Features and uses of different contract types (e.g., physical vs. financial). Specific trading markets and mechanisms for each energy commodity. Introduction to derivatives in energy trading.
3.	Life Cycle of a Deal	This module contextualizes energy trading operations by detailing the typical life cycle of a deal, outlining the structure of a trading organization and the functions involved at each stage. Structure of a typical energy trading organization (front, middle, back office). Roles and responsibilities of different functions (traders, risk managers, back office). Main tasks carried out at each stage of a deal (origination, execution, settlement). Key operating principles and common problems that can arise in deal management.
4.	Energy Market Risks	This module explores the unique categories of risk inherent in energy markets, with a particular focus on price volatility and strategies for managing it. The key objectives include; Types of energy market risks: price risk, delivery risk, operational risk, credit risk, regulatory risk. Understanding price volatility in energy markets. Hedging strategies and instruments for managing price risk. Risk mitigation techniques for non-price risks. Introduction to Value-at-Risk (VaR) and other risk metrics.
5.	Master Agreements	This module provides an overview of the pivotal role played by Master Agreements in standardizing and simplifying the energy trading process, reducing legal and commercial complexities. The key topics include: Purpose and benefits of trading under Master Agreements. Key principles covered: credit, netting, confirmation, settlement. Examples from main Master Agreements in use for energy trading (e.g., EFET, ISDA). How Master Agreements simplify deal arrangements.
6.	Energy Market Regulation	This module delves into the increasingly complex and wide-ranging regulatory landscape governing energy trading, outlining key regulations and their potential impact on operations. The key topics include; Overview of the overall regulatory context for energy trading. Detailed application of REMIT (Regulation on Wholesale Energy Market Integrity and Transparency). Extension of financial market regimes: MiFID II/MiFIR (Markets in Financial Instruments Directive/Regulation). EMIR (European Market Infrastructure Regulation) and MAR/CSMAD (Market Abuse Regulation/Criminal Sanctions for Market Abuse Directive). Compliance requirements and their implications for trading businesses.
7.	Back Office Tasks	This module examines the critical functions of the Back Office in maintaining the smooth operation and integrity of an energy trading business, covering main tasks and common processes. The key topics include: Principles of Back Office operations: confirmation, settlement, reconciliation. Key responsibilities of Back Office staff. Practicalities of common Back Office tasks and processes (e.g., invoicing, payment processing). Ensuring data accuracy and integrity. Interaction between the Back Office and other trading functions.

TRAINING STYLE

The modules will be taught through PowerPoint presentations, and lectures and will include a case study/field visit, breakout sessions, case studies and other interactive discussion components.

The course will also include a few guest speakers, both in person and via Zoom and other online learning platforms for overseas speakers. This provides useful real-world insights alongside the more theoretical aspects of the course.

The conference faculty shall consist of experienced decision makers, as well as practitioners and representatives from established educational and research institutions active around climate change, engineering and international development. Throughout the course, theoretical presentation of concepts will be moderated and more group discussions and plenary engagements will be optimized. PowerPoint presentations will be made by facilitators and resource persons, to highlight key concepts before embarking on group work.

GENERAL NOTES

Training manuals and additional reference materials are provided to the participants.
Upon successful completion of this course, participants will be issued with a certificate.
We can also do this as a tailor-made course to meet organization-wide needs. Contact us to find out more: info@ecasiafrica.org.
Payment should be sent to our bank account before the start of training and proof of payment sent to: info@ecasiafrica.org.

ABOUT ECAS INSTITUTE

The ECAS Institute designs and delivers independent and targeted training, research, and consulting services. Our work focusses on climate change and resilience building, carbon markets, renewable energy, nature-based solution, biodiversity conservation, agriculture and food systems, We are located in Nairobi Kenya and work across the African region. We have implemented training and research assignments in Kenya, Tanzania, Uganda, South Sudan, Somalia, Malawi, Rwanda, Congo, and South Africa. Globally, we have supported our partners from the UK, Denmark, Italy, Sweden, Germany, and USA.