OTC trading platform of the year: Engie Egma

Engie has seen significant activity on its over-the-counter market access platform, Engie Global Market Access (Egma), in 2021 and into 2022, as it continues to develop the offering in line with client needs.

Nearly a third of the company’s commercial transactions are now automated through the platform, which offers power, gas and environmental products. In addition to providing trade execution across various maturities in seconds, Egma enables Engie clients to create requests for quotes (RFQs) on physical and financial gas, power and emissions certificates markets.

Over the past year, it has processed around 35,000 RFQs, completed more than 8,400 deals and transacted 125 terrawatt-hours (TWh) of electricity. Engie has so far onboarded around 150 European and Asia-Pacific clients to Egma, which now has more than 1,000 users. An expansion to the US market is planned for later in 2022.

“Egma has shown its value more than ever in H2 2021 when gas, power and emissions markets [saw] a period of unprecedented volatility,” says Igal Madar, head of central western European (CWE) cross-commodity trading at Engie’s global energy management and sales (Gems) business. “In December alone, the platform recorded around 1,000 clients’ transactions. In such a tense situation, it would have been impossible to manage our sales activities without Egma and its trading automation.”

Egma has enabled Engie to develop a whole new approach to market access for its clients, adds Edouard Chevalier, head of the CWE origination & sales team at Gems, Engie. “Automation is enabling us to focus on innovation and nurture further client intimacy,” he says. “Thanks to Egma, we’ve been able to create more value [for] our client base and win repeat business throughout the year. Our commercial activities nearly tripled in 2021, and our market access platform was one of the key drivers of [this] growth.”

The platform was developed in-house and was influenced heavily by Engie’s clients, according to Madar. For example, Engie added a mark-to-market feature in late 2021 to enable clients to assess performance against market changes in seconds. With the volatility seen across the commodities complex over the past year, this feature has been particularly useful in helping users of the platform to make quick decisions in rapidly changing markets. “Every additional feature directly helps specific issues identified by our clients as ways to improve their trading journey and our trading activities,” Madar adds.

Thanks to Egma, we’ve been able to create more value [for] our client base and win repeat business throughout the year

Edouard Chevalier, Engie

Around 30 underlyings are currently traded actively on the platform. Madar says this includes more recently added environmental products such as French energy efficiency certificates, also known as white certificates. This addition was made in line with the organisation’s wider “push on low-carbon solutions”, he adds, and will soon be expanded to include carbon offset transactions. “The strength of Egma lies in its modular, adaptable design. This enables us to plug in to new markets quickly and act as first movers in booming businesses, such as carbon offsetting,” Madar says.

The platform, which was launched in 2018, with the first transactions occurring in March of that year, saw another key development in 2021 when Engie initiated partnerships with several European clearing houses. Madar says these partnerships will “further improve client support and democratise market access for more players”. Clients will be able to access OTC markets through Egma, clearing their positions with clearing houses without the need to engage intermediaries or register as market agents, he says, adding: “This will be a business growth accelerator for our business.”

According to Chevalier, Egma has significantly changed the working practices of multiple teams within the company, from front to back office. “It has freed up time to focus on developing new ways of doing business and extending our market access capabilities to a broader scope of clients, from large trading houses to small and medium-sized players,” he says.

Indeed, the ongoing development of the Egma platform shows Engie’s continued commitment to digital innovation and to creating client-led solutions that boost market access and trading opportunities.