It has been a while since we wrote about European short-term power solutions although, to be fair, we have created a couple of CTRMRadio podcasts on and around the topic with some really good content from people like Jurgen Meyerhoffer who is now CEO of Enspired Trading but was previously CEO at what was Visotech, Chris Regan who heads up Brady’s Energy Product Portfolio and Johann Zamboni of eZ-nergy. Meanwhile, much has evolved in intraday power markets.
According to the Next-Kraftwerke website, intraday trading is defined as follows,
“Intraday power trading refers to continuous buying and selling of power at a power exchange that takes place on the same day as the power delivery. In Europe, the largest intraday power exchanges are the EPEX Spot (European Power Exchange Spot Market) in Paris and the Nord Pool. It can also take place in an OTC trade (over the counter), which means off-market contracts negotiated between power buyers and sellers. This is also known as the short-term wholesale power market, especially in contrast to long-term power trading on the power futures market.”
They also aadd that “expansions to the stock markets that have taken place since 2010 mean trades are no longer limited to a single country. Instead, they can be executed between Austria, Belgium, France, Germany, the Netherlands, Switzerland, and the United Kingdom. In 2015, the total trade volume of intraday markets on the EPEX Spot was 59 TWh. Of that amount, 37.5 TWh were traded in the German and Austrian market areas.” And comment on the XBID market as follows, “Cross-border intraday trading was introduced on 12 June 2018 between the following countries: Austria, Belgium, Denmark, Estonia, Finland, France, Germany, Latvia, Lithuania, the Netherlands, Norway, Portugal, Spain, and Sweden. Known as XBID, harmonized trading systems can coordinate bids from market players in the participating countries and conduct same-day trades across borders, assuming there is sufficient availability of cross-border transmission capacity.”
In a recent interview with Jurgen Meyerhoffer, he told us “we are in the middle of a fundamental shift in short-term energy trading. As you know, I focused on algorithmic trading and intraday power markets over the last years. There is one big topic that needs to be solved to make the energy transition happen – integrating flexibility smartly into the grid. This applies to existing assets and new projects alike, such as power generation, battery storage or distributed portfolios. With recent progress in intraday markets across all of Europe, electronic trading interfaces at the power exchanges and intelligent algorithms at our fingertips, we now have everything in place to make this happen.”
Meanwhile, on the software side, both of the early leading vendors have been acquired. Vistech was acquired by Trayport in 2019 and is now Trayport Austria GmbH and Likron was also acquired by Volue in late 2020. Volue had its own automated trading application at one point and it also acquired Procom, another automated trading solution vendor, last month. Trayport and Volue now essentially are the major vendors in this space. There are other solutions from vendors like EnerygyOne’s eZ-nergy, who recently announced an automated power bidding module for auctions as an add-on to its offering. Other vendors with solutions in the space include FIS, Soptim and a few others yet for the most part, it has been the Trayport and Volue Likron solutions that have seen the largest uptake. In a recent interview with Likron’s CEO, Roland Peetz, by ComTech, he alluded to maintaining this leadership and rapid growth.“We still lead the market. We have upped our game and although we do see more competition in the market, Likron is still ahead,” he told us saying that Likron had experienced 20-30% pa growth rates for the last several years.
Despite that, the heavyweights in automated trading software are about to face a tranche of new competitors. Brady under the direction of industry veteran, Chris Regan, has developed the Brady Powerdesk aimed at “maximising revenues in short-term power trading and monetising generation assets.” Having had a demonstration of Brady Powerdesk, I can say that this is a slick product that has been designed to meet exactly that mission statement and it should prove competitive targeting short-term power markets. Meanwhile, Budapest-based Navitasoft has also created a new automated trading module (Algotrading) within its Trader Suite to meet the challenges posed by the significant changes on the intraday energy markets. Additionally, Igloo announced this time last year that it had “successfully partnered with Yuso the Belgium based aggregator in renewable energy markets and Romande Energie one of Switzerland’s leading utilities to deliver a cloud-based Swiss intraday power trading platform.”
The intraday and short-term power markets in Europe are growing rapidly and is spawning a rapidly growing software markets alongside the ETRM space for automation and deployment of algo trading. With new solutions coming to market like Brady, Navitasoft and Igloo (and perhaps others we have not yet heard about?), this market place seems to be heating up from a software point of view as well.