Artificial Intelligence (AI), Machine Learning (ML), Robotic Process Automation (RPA), and of course digitization have been and still are hot buzzwords. AI has been around for some time, while the term Machine Learning is a more recent term, often opportunistically used to rebrand AI. Machine Learning can be considered a current application of AI based around the idea to let machines access data and let them learn for themselves. Rule-based systems use rules prepared by humans, and some may see it as old school AI. With the increase of digital information being available, both Rule-based systems and ML have a lot to offer. With their promise of automating mundane tasks as well as offering creative insight, the energy trading market has been recognizing the benefits. Next generation ETRM systems have adopted AI, thereby embedding intelligence in various functional applications as routine technology as illustrated in the following Automation Examples.
Energy and commodity markets have grown increasingly complex when it comes to trading, risk management, settlement and regulatory reporting. Trying to keep up with these developments, the monolith solutions that are supposed to manage all those activities in a single system have become nearly unmanageable, inflexible, and very costly to maintain. Since the financial crisis 10 years ago, market participants are paid lip service for wanting less costly solutions with proven functionality that is implemented faster with reasonable flexibility as their business changes. Today, they experience the costly consequences of their expensive monolith system choices that deliver many functions averagely at best. As a result, there is growing recognition that solutions work better if they are kept simple rather than made complicated. Best-of-Breed is now considered a more suitable fit to support the complexity of C/ETRM software system environments, both for functional capabilities as well as to lower the total cost of ownership. Here are a few ideas how to Improve and Simplify your C/ETRM Environment! Continue reading
In continuously evolving power markets, with highly volatile electricity prices, market participants are interested in managing their price risk in addition to their volumes and other risks. Price information from future contracts traded on standard markets do not provide the flexibility or granularity required for different intervals, such as hours of the days or weekdays. With electricity consumption different at time of the day, week and seasons, and affected by weather conditions, this may lead to unanticipated price changes. Having access to accurate price expectations is therefore very relevant. This is how a forward price curve will help you Manage Price Risk with a Price Forecaster!
In one of our previous Blogs we wrote that operating in an environment where flexibility at a lower cost is required, this means a different type of technology solution and implementation is a necessary change for the future of C/ETRM. Next generation C/ETRM solutions from pioneering vendors can deliver on those requirements where legacy system and vendors cannot. For that reason, such solutions end up on the short-list after elaborate use case-based demonstrations. While users are very excited about the innovative functionality they have seen, companies sometimes may hesitate to get out of their comfort zone. For such companies there is a post-demo approach to further assess the viability of a solution for solving their business needs: the value of a Project of Concept Project in C/ETRM!
What an exciting start to the new year! Goals and resolutions are being pursued in order to do things better or differently. At Pioneer Solutions, one goal never changes, and that’s our commitment to approach every engagement with our existing and prospective customers with one objective in mind; ensuring their success and satisfaction. We want them to know how our C/ETRM solutions will benefit their operations through increasing process efficiency, reducing cost, minimizing operational risks while maximizing business opportunities. As a true Pioneer we continuously innovate, living up to our hard-earned reputation of delivering next-generation solutions that the market demands. We do exactly that, when looking at some of this year’s applicable technology trends below. Continue reading
GDPR is the new General Data Protection Regulation from the European Union (EU) which comes into effect in May 2018.Its intention is to strengthen and unify data protection in an increasingly digitalized world for all individuals within the EU. Personal information is defined as an ‘identifiable natural person’, whether it relates to private of professional life. For example, as part of counterparty contact information, John Doe, Trader at Energy Corporation would be an identifiable person. Moreover, MiFID II reporting now includes natural person data as well. GDPR will require companies to adopt much stricter processes in dealing with customer data. How to comply with new data management practices: an integrated C/ETRM system!
We don’t need to dwell on how we are living in an increasingly competitive and fast-paced world. Conditions that put pressure on companies to change. Not just their markets, operations, and organizations but also their beliefs. Those willing to take risk, step out of their comfort zone and into the discomfort of uncertainty will be those who will reap the biggest rewards. The current playbook just doesn’t work anymore, and neither do legacy C/ETRM systems or established expectations on how to implement them. Those ageing designs do not provide the flexibility to evolve with the business, while modern C/ETRM systems are implemented in months instead of years. “So, why get out of your comfort zone and implement a Next Generation C/ETRM system? Because that’s where the magic happens!
The past years have seen an emergence of renewable electricity generation which caused a shift to short-term and intraday trading. Traders use the intraday market to optimize their position to reduce risks associated with unexpected imbalance prices charged by the TSOs, while others see the Intraday Market as an important tool for their portfolio management. Renewable generation is less predictable, introducing volatility, where positions may change rapidly and decisions are based on multiple information sources. To manage exposures and capitalize on opportunities, it requires a live, real-time system with automated market connections to the SPOT markets; Intraday Markets: Real Money in near Real Time!
Most market participants will not have missed the activities around upcoming changes on the regulatory and accounting side. While most are aware, are most also ready? Time is running out with the first change as soon as November 1, and significant other changes effective by January 2018. Revisions to EMIR will be up first. For those in energy and commodity trading, MIFID II Regulatory Technical Change 20 and 21 are important. MIFID II will also activate a few parts of MAR. Finally, IFRS standard 9, which industry watchers expect most companies to fully adopt, has amandatory effective date for annual periods beginning on or after 1 January 2018.