Risk Management

Risk Management is the core of everything we do within the Group – the core of the products we supply to our customers and the core of everyday thinking and operations. Without professional Risk Management in the short and long term, we cannot achieve a sustainable Group, which can deliver excellent results now and in the future, as well as good service to our customers and shareholders. Sustainability depends on good Risk Management and results in a financially sound and wellfunctioning Group that is well-equipped for future challenges.

The Energi Danmark Group business model is based on being one of the leading Northern European energy trading companies. Our activities include:

When trading energy products on various markets, Risk Management becomes a very important part of the business model.
  • Selling electricity – both physically and financially,
    especially to customers in Denmark, Sweden, Norway,
    Finland and Germany
  • Buying electricity – both physically and financially –
    from Nord Pool, Nasdaq, other exchanges, counterparts,
    decentralised power plants, wind turbines etc.
  • Carbon certificates trading
  • Gas trading
  • Portfolio management and counselling
  • Green certificates trading
  • Operation of own wind turbines
  • Cross-border trading of electricity in Europe
  • Trading on balancing markets
  • Buying and selling other energy-related commodities.

When trading energy products on various markets, Risk Management becomes a very important part of the business model. The Energi Danmark Group is exposed to different kinds of risks including (among others) market risks, liquidity risks, credit risks, volume risks, currency exchange risks, operational risks and interest rate risks.

In order to handle these risks, the parts of the organisation responsible for sales, purchasing and trading have included relevant Risk Management procedures and internal controls in their daily operations.

The responsibility, however, for measuring and evaluating risk exposure levels and monitoring adherence to risk lines sits with the Risk Management department. The Risk Management department is independent of the departments managing the risks.

The Board of Directors has set the lines within which exposure to risk is permitted. The Risk Management department compares actual exposure levels with the lines given by the Board on a daily basis. In case of a breach, the Board is informed immediately and exposure is to be reduced to below these lines.

All derivative activities for Trading purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

Learn more about Risk Management in our Annual report.