I spent some time on the phone last week with Arnt Sollie, of Powel, asking about trends in the industry and their own product strategy.
The first thing that he sees is very significant interest in algorithmic trading solutions, especially, related to the intraday markets. This is something he has also observed in Powel’s regular market activity over the last year or so. But, Powel believes that automation is not only about automating trades, but all the entire work processes around it as well; such as updating production plans for renewables to the SCADA system, sending system data to the TSO, nominations, and scheduling etc.
Powel is now working with its customers to help automate the entire work process around trading and then enabling the efficient plug-in of an algorithmic trading module when the pre-conditions are all in place. It offers a cloud-based algorithmic trading solution and he described their approach to algorithmic trading as a ‘white box solution’ where they provide several standard algorithms which can be used out of the box or just as a starting point. However, the customer is given the flexibility to write their own algorithms as well in Python. “We find that most traders want to develop their own unique strategies to stay competitive in the market,” he told me. “Most of our competitors offer a limited set of predefined algorithms, but we don’t think that is the best approach. It´s for sure not a robust approach against, for example, sniffing and spoofing. We are also innovating with machine learning-based algorithms and our clients will also get the ability to write their own ML based algorithms inside Powel Algo Trader. We developed Powel Intraday trading together with our clients to be the most user-friendly interface in the market today, connected directly to both EPEX, Nord Pool, as well as other markets with open APIs like XBID. All solutions are seamlessly connected to both physical assets like power plants and to the nomination and scheduling that is handled within our DeltaXE solution.”
Another area he sees as a trend is the area of ecosystems driven by the move to digitalization as well as by the need to simplify overall complexity, he told me. “The user experience of different solutions gets better because the complexity is moved from the front-end to the back-end of the solution at hand. So, when we talk about a digital platform, we mean an architecture that contains a different number of technologies and that allows those technologies to work together – both from a business and technology perspective. We have worked intensively over last couple of years to open up our portfolio and to move from a world of enterprise solutions to an open ecosystem. This allows our clients to select the solutions, or modules, they would like and then plug them into their own digital platform. Our guiding star is that our solutions should work well alone, but better together. So, when we, for instance, refer to the algorithmic trading solution, it works well alone as a stand-alone solution, but if you connect it with the marginal cost module for your physical assets, the machine learning wind power forecasting solution, short-term trading, and power and gas scheduling with DeltaXE, or the intraday trading desktop, it goes from good to great.”
Some of Powel’s clients have already taken steps in the direction of a digital platform such as E.ON and Uniper. Powel implemented their solutions for these business in the Microsoft Azure cloud environment. Mr. Sollie told me that the takeaway from this is a lower total cost of ownership (TCO), faster time to market and more agility. “I think the future is one that moves towards semi-automated solutions, built on top of cloud-based digital platforms that enable cross-industry partnership solutions to foster both the business and technology innovation, and the speed of change the utility sector is faced with.
You can hear more of Mr. Sollie’s perspectives along with that of three other ETRM/CTRM vendors (Aspect, Contigo, and Agiboo) on top technology trends in the initial CTRMRadio podcast due out soon – stay tuned to these pages for more news on the podcast.