April 30, 2018
There’s a new report in the works that European energy traders would do well to investigate. It provides a neat summary of some of the industry’s most pressing predictions, along with a recap of what can be done about it given the equally prescient predictions surrounding digital technologies. It runs something like this:
European power and gas prognosticators have long predicted the rise of renewables in the continent’s shifting energy mix. We were told that regulations would change accordingly, and that disruption would soon follow. Price differentials would erode profits. “Virtual” power plants would create new prosumers – consumers producing their own power (i.e., solar, wind) and selling it back into the grid. Real-time, intraday trading would press the case for automation, and financing sources would tighten up. All this, while data continues to proliferate, and small producers emerge up and down an ever more distributed energy landscape.
But, we were also informed about rapid changes in digital technology. Distributed ledger technology (blockchain), artificial intelligence, machine learning and big data are revamping traditional brokerage and merchant business models around cloud-based strategies, involving data provisioning, analytics, algorithmic trading and smart energy exchanges, to name a few. Traditional E/CTRM software is also set for a makeover, as traders adopt new automated systems to manage positions 24/7 and become more involved in tracking physical assets along the supply chain.
The industry’s biggest names are involved in some of the biggest moves and, as the game unfolds, anyone who makes a living off the action owes it to their future to check their bearings now. Watch for the report, and get ready to rise with FIS.