KYOS Analytical Platform supporting transition to clean energy.
Recently, I had the pleasure of conversing with a senior consultant at KYOS, a company that offers a range of analytical software tools and services. When examining the breadth of software solutions provided by the company, one can find everything from predictive analytics (such as price forecasting) to optimization, hedging, VaR, valuation models and even transaction management software. How was all of that developed?
I was told that historically the company originated as a risk and simulation solution for large energy firms, which would utilize it alongside their ETRM systems. This was a common scenario where large companies sought more sophisticated and flexible risk applications compared to those offered by their ETRM systems. They typically used VaR solutions, market simulations, and forward curve building. However, with the advancement of renewable energy and energy transition technologies, KYOS identified new opportunities. On the one hand, there are new market participants seeking solutions, such as IPPs, banks investing in renewables, and corporations with prosumer capabilities. On the other hand, there are new asset types where analytic software can offer support, such as batteries, PPAs, and green hydrogen production. This presents a significant opportunity for KYOS, as my contact person describes it.
KYOS is developing a suite of analytics to assist customers in solving various problems, ranging from managing the risk of PPA portfolios to optimizing power and gas production, and storage, including battery storage, sizing electrolyzers for green hydrogen production, and more. But analytics is not all. The company has also developed a transaction management solution for smaller customers such as municipalities or corporations. They realized that companies not directly involved in energy trading but still needing to manage their energy purchases or produce energy for part of their needs, as well as managing non-energy commodities, require a kind of small ETRM system for deal entry, risk positioning, and settlement. This aspect of the business is considered as successful development by the company. More and more companies outside of the energy sector are considering this solution, such as those dealing with metals or customer goods logistics.
According to my contact person at KYOS, the main differentiation of KYOS from other analytics providers lies in its extensive offering, which includes optimization models for various types of flexible energy assets, forward curve building and price forecasting, risk management KPIs such as VAR, and a fundamental model that allows for market development simulation. All these tools are available on the same platform and can be used simultaneously, providing users with additional opportunities to simulate how different events influence each other and consider correlations between them, as I was told. My contact has also stated that significant changes in the company’s direction are related to the transition to clean energy. The primary focus of current and future developments is directed towards batteries and PPAs, green hydrogen, and short-term optimization and trading.
The company has a solid customer base with growing demands, my contact explained. With customers being the main source of new requirements, and KYOS is eager to extend the software to meet their needs.
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