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What’s on energy traders’ shopping lists in a time of COVID-19?

(Commodities People) In the last 3 months since COVID started wreaking havoc (gosh, it feels like so much longer…) myself and the team here at Commodities People have been in daily contact with a wide range of energy trading firms and technology providers.

On the tech provider side there has been a really noticeable split – some finding that pending sales have been at best frozen, at worst completely evaporating, while others find themselves having their best periods yet (one large firm I’ve been speaking to have achieved over 120% of their annual target in the first half of the year!)

What accounts for this difference? What technology solutions have become more important than ever as a result of the last few months, and which less so?

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As an organiser of physical events in the energy trading sector for the last decade and now having embraced the benefits of online events, we are in a strong position to answer this question – attendees to all of our events complete a survey at point of registration around their interests, and also the purchases they are considering making in the coming 18 months.

So… in order, please see below the results so far based on 400+ energy trading firms, primarily based in Europe, but with around 20% from North America:

 

Q – Please tick if you are considering acquiring any of the below solutions in the coming 18 months

E / CTRM Systems 33.22%
Data analytics tools 33.22%
Risk / market / price modelling tools 30.39%
Data management tools 29.33%
Forecasting tools 29.33%
Online trading platforms 28.27%
Market data feeds 27.21%
Algo / automated trading software 25.44%
Robotic process automation RPA 19.08%
Trade surveillance solutions 16.96%
Electronic settlement matching eSM 16.61%
Technology consulting 16.25%
Business consulting 15.90%
Regulatory reporting tools 15.55%

 

By far the most interesting stat here is the %age looking for E/CTRM systems. Not only is this the largest figure, but it is also an ENORMOUS increase on the 2019 figures, across our events asking the same question pre COVID the figure was 13.17%, now it is 33.22% – this represents a 250% increase!!!  Wow, wow, wow… I’ve received a wide range of views on why this is, but ultimately it seems to be a perfect storm of the continued development and increasing credibility of the challenger E/CTRM providers who are clearly showing their solutions can equal and in many cases outshine some of the incumbent providers, and the need for truly remote E/CTRM platforms in this new era of remote working. Will this figure remain as high in the months ahead? Let’s see… it does seem though that the scene is set for some real disruption in the E/CTRM space…

On another very encouraging note – the overall figures do show that trading firms are still buying, or at least planning to buy in the months ahead – and the digital revolution continues to march forward, not hindered by COVID but actually probably helped along by it, as the importance of sound, reliable systems when working in a decentralised way, becomes more important than ever.

I’d be interested to hear readers’ views on those results, if this is fitting in with what you are seeing and why you think this is?

I’d also like to take the opportunity to invite all readers to register for free to the event which is the source of the data – Energy Trading Week Online, taking place 16-18 June – more info at www.energytradingweekonline.com – watch as little or as much live as you wish and receive all recordings to watch at your convenience.

By Ben Hillary, MD, Commodities People