Equinor’s Energy Trader Eyes New Zealand Amid Expansion in Asia

(Bloomberg) -- Danske Commodities A/S, a high-tech energy trader, is ramping up its expansion outside Europe with eyes on the New Zealand power market and a continued build-out in Japan, just as volatility is shrinking at home. 

The subsidiary of Norwegian energy giant Equinor ASA entered the Japanese market earlier this year and is “consciously ramping up” there through developing its trading algorithms, Chief Executive Officer Helle Ostergaard Kristiansen said in an interview. The firm is also planning the next steps, including entering New Zealand, while it’s already active in Australia. 

The focus on markets beyond Europe, which also includes a new Brazil office last year and continued US growth, coincides with calmer gas and power markets in Europe after the energy crisis in 2022 that led to blowout profits for many of the region’s energy traders. 

“It’s a part of our strategy to have a diverse portfolio of value pools and have more legs to stand on as a company,” Ostergaard Kristiansen said.

DC, as it’s known in the industry, said Thursday that adjusted earnings before taxes were €359 million ($385 million) last year, down from €2.245 billion in 2022. By expanding into new markets and investing in new systems, the firm still delivered the second-best financial results in the company’s history. 

“When markets started to stabilize after the energy crisis, market participants had to adjust to a new reality with declining energy prices and decreasing market volatility,” Ostergaard Kristiansen said. 

She said she expects low levels of volatility on longer-dated contracts through this year, but the potential for larger price swings in the short-term as even more intermittent renewables are added to the energy mix. 

Though the extreme price movements that characterized energy markets in 2022 have faded, there are still plenty of opportunities for traders like DC. The electrification of the economy will mean continued demand growth for decades to come, while the increasing share of solar and wind will keep short-term power and gas markets volatile. 

The firm is active in 42 countries, including all major European markets.  

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