Fintech Insights

Disruptive Technologies, Business Model Innovation Shape European Energy Future

July 10, 2018


The opening stanza of FIS’ latest energy and commodities industry report, “Digital Innovation in European Power Trading,” is enough to make any vested EU power player just a bit uneasy. Among other factors, the rise of renewables, impact of regulations, EU legislation and shifting policies around how business might be conducted in the future, have effectively altered the state of the industry and placed significant challenges before all participants concerned.

For instance, the EU’s push toward a low carbon future has revised the generation side of the European power equation, placing new emphasis on exchange-based, rather than over-the-counter, bilateral trading practices. As a consequence, profits are down. Stakeholders have become more cautious. The increasingly distributed power grid has amplified the need for improved visibility and control. And, with so much data available, the new emphasis on real-time, 24/7 trading appears even riskier, without proper analytic solutions firmly in place.


In the traditional, “measure twice, cut once” world of energy trading, the mere mention of the word “technology” is enough to invoke tremors. Energy market participants have historically been slow to adapt. However, now more than ever, this instinct must be overcome, if power traders are to remain relevant and, indeed, thrive in the months and years ahead.

The FIS report outlines four digital breakthroughs that can positively change the game for European energy traders, if embraced with serious intent:

  • Cloud Adoption and Software as a Service (SaaS), the non-negotiable enabler, making all other technologies on the list work economically and at scale
  • Artificial Intelligence (AI), machine learning (ML) and Internet of Things (IoT), supporting automation of real-time trading, asset optimization, smart grid management and more
  • Blockchain, a form of distributed ledger technology, enabling secure transaction networks, including internal, back-office applications and microgrids
  • Big Data Analytics, combined with AI, allowing humans to spend less time sifting information and more time thinking, while machines monitor and control mundane systems such as virtual power plants


Of course, technology for technology’s sake never provides the full solution. There must be business models and rules in place to govern technology if real change is to occur. FIS’ report acknowledges as much, citing ways that technology can enable new business models to contribute to the bottom line (by adding new services, for example).

The report highlights how RWE Supply & Trading GmbH used a combination of the above technologies to introduce a new web portal targeting municipals and industrial customers for optimized online trading. The portal can actually be labelled by partner utilities, creating around-the-clock trading opportunities that wouldn’t otherwise be possible during traditional office hours.

In conclusion, the FIS report is a must-read for anyone interested in driving new business results in today’s challenging European power market. The new six-page report can be downloaded here. Claim your copy of the full report today – and get ready to rise with FIS.