For many years, the German-speaking markets for power and gas from a vendor point of view anyway, seemed opaque. ComTech knew of a number of German-speaking vendors serving the ETRM and associated software markets but not much more. A visit to E-World each winter only fueled our suspicions of a market within a market that was inaccessible to non-German speakers. Attempts to make contacts, forge connections and learn about the offerings on the market were foiled by the language barrier as booths offered only German language collateral and staff who did not speak English. Then, suddenly everything changed.
Over the last 2-3 years, we have had the opportunity to get briefings from a number of these vendors including, for example Visotech, Procom, Kisters, and Soptim. Suddenly, many of these vendors have English-speaking staff and collateral – even websites in English and they are more visible outside of their traditional German-speaking markets. Now, part of that is probably simply natural evolution of these businesses and solutions as they seek new pastures for their software and services. Partly, it may be down to an increasing amount of incursion into their traditional markets by vendors from North America and other parts of Europe. For example, Contigo has made a push into German markets and created a German website, FIS is also active there and vendors like OLF, Allegro and so on also have and have had, a presence. However, perhaps the biggest reason for this new dynamic is the advent and evolution of intra-day trading for power and gas in European markets.
Continuous intraday trading of power in Europe was supplemented in 2014 by EEX who introduced an additional auction for 15-minute time slots at the beginning of the intraday trading session at 3 pm. Somewhat similar approaches have been adopted elsewhere (e.g. NordPool, PGas) and a liquid and robust intra-day market has continued to develop across western and central Europe. The correlation between the popularity of these markets and instruments with the rapid rise of unpredictable renewable sources of energy in undeniable. It is these developments that have created an opportunity for vendors in Germany working with local clients, to seize an unprecedented opportunity to go multinational. It has also been the rapid development and interest in intra-day that has caught the eye of non-Germen vendors.
The result has been that there are now two overlapping product markets in Europe – one for traditional ETRM and the other for a more specialized, real-time and data intensive intra-day product. From day one, ComTech has argued that the two product spaces cannot be served by the same software category as the needs are quite different. In the first instance, ETRM continues to serve a traditionally after the fact recording type function in which day-ahead and longer trades are captured, processed, settled, and invoiced – with or without a scheduling component (often provided by a specialist application such as those provided by Brady, Powel, and EZnergy, EGSSIS and others). The intra-day requirement includes a big data component, optimization of assets, automated trading, real-time trading and scheduling and requires an altogether different architecture. Leaders in the intra-day world include Visotech and Likron who probably own much of the current market for such solutions. Other suppliers include Powel, Procom, Soptim, FIS Energy and Contigo – though some of these focus on specific aspects of the intra-day functionality only. (See the Directory for a complete list as we understand it today).
It is interesting that market developments in Europe have essentially created not only a subclass of ETRM software specifically for intra-day trading that includes automated and algo-trading, but has also changed the vendor and product dynamics considerably. Although, language and culture barriers undoubtedly still exist in European energy markets, they are being progressively broken down by the opportunities created by business change.