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Energy and commodity markets

Introduction


Energy and commodity markets are undergoing far-reaching changes. Mounting competition and need for flexibility have been matched by declining revenues while business risks are on the rise. The increasing digitalisation is requiring all market participants to rethink and realign their business activities.

 

The development of interconnected, highly automated and nevertheless flexible processes will ready your company for the future and in this environment will create a competitive edge to remain successful over the long term.

 

We will provide you with in-depth advice - from initial gap analysis and assessment of your energy and commodities business to the development of tailor-made models, algorithms and IT infrastructure through to the establishment of improved business processes in your company.

 

Development of strategies and automated solutions for your front-to-back processes in procurement, marketing, trading, portfolio and risk management is equally part of our consulting services as the development of precision-designed incentive systems for the efficient steering of your energy and commodities business.

 

Benefit from our long-standing experience and our solution competence from a wide range of assignments for companies in the energy sector and the manufacturing industry as well as for banks and trading exchanges.


Learn more about our tried-and-tested approaches and how you can integrate them with our help to profit your company.

 

Our consulting services in detail

 

We look forward to hearing from you and an opportunity to discuss our services in greater detail.


Please feel free to contact us on +49 69 90737-0 or at ecr@remove-this.d-fine.com

 

 

Power and gas trading

Power and gas trading is playing a key role in the ongoing transformation of the energy industry. With the further expansion of the generation capacity from renewables as well as ever more challenging customer requirements, for instance regarding flexible volumes or automated (on-line) pricing, large volumes of data need to be processed at short notice and incorporated into trading decisions. Lower margins are also making the business of supplying power and gas a more complex undertaking.

To address the challenges, innovative technology, such as dynamic hedging and option strategies for the management of power stations, storages, procurement or sales contracts, is coming into growing use in portfolio management. This means that a correspondingly broad range of complex instruments and market access needs to be made available to trading in order to implement requirements from portfolio management in good time on the markets.

Your business success in trading will therefore depend crucially on quickly and efficiently extracting the key information from the flood of data and making it usable for trading. By using flexible and intuitively controllable algorithms, energy trading will be supported efficiently in order to take trading decisions in real time and to use the instruments offered by the market in a flexible manner.

Together with our industry partners, we develop sustainable solutions, from the design of highly integrated and automated processes individually customised for your company to the selection and implementation of standardised ETRM systems as well as development of tailor-made software for the analysis of market, business and forecast data, algorithmic trading or automated interfaces to trading exchanges.

Read more:

ETRM systems - selection and implementation

Potential for algorithmic processes in intraday power trading

Intraday power trading using customised software

Vendor certification for real-time connection to the EPEX SPOT trading systems

Portfolio and risk management for energy utilities

Growing uncertainties on the markets for power, gas, coal, crude oil and CO2 as well as mounting competitive pressure are making it ever more difficult to manage the procurement, generation and sales portfolios of an energy utility. Furthermore, in many cases valuation and risk calculation for these portfolios are very cumbersome, given the complex features or technical restrictions of sales and generation assets.

The aim of effective portfolio and risk management is to identify, measure and ensure efficient steering of the key opportunities and risks in managing your portfolios for profit. To this end, the development of suitable valuation models and key performance indicators (KPIs) geared to the core business is essential.

On the basis of the KPIs, procurement and marketing strategies can be derived for flexible supply agreements, storage systems or power plants, which will allow you to take intuitive control and bring lasting improvement to your return/risk profile.

Wholesale markets are offering an ever greater variety of tools that can be used for the flexible management of your portfolios. By using options or dynamic hedging strategies, it will be possible to achieve effective reduction in volume risks from sales contracts or generate flexibility premiums of power plants and storages in a systematic manner.

d-fine provides support in the development of organisational structures, models, algorithms, processes and IT systems for the safe and efficient practical use - from the design through to the establishment in operating business.

Read more:

ETRM systems - selection and implementation

Commodity risk management for industrial companies

The escalating volatility of prices in key energy and commodity markets creates added difficulties for cost and liquidity planning. At the same time, there is a growing risk of supply bottlenecks for strategically important components and commodities - both for your company and for your competitors.

In this situation, ongoing risk monitoring on the basis of meaningful key performance indicators will enable you to identify need for action early on and quickly counteract with suitable measures, thereby ensuring that you remain one step ahead of your competitors.

For that reason, we invite you to work together with our experts to develop effective processes for identifying, measuring and systematically managing your commodities risks.

To ensure that these processes function reliably and efficiently in practice, your organisational structure, procedures and processes as well as your system landscape will need to be enhanced and properly coordinated on a targeted basis. If required, we can work closely with your partners to design and implement those enhancements at whatever level of detail is appropriate - from a specialist concept to workshops and employee training sessions and ultimately to system selection and implementation.

Read more:

Identifying and assessing commodity risks

Controlling commodity risks in an opportunity-driven manner

ETRM systems - selection and implementation

Hedge accounting

Do you use financial derivatives for economically stabilising your commodity price risks, but fail to recognise your hedging relationships in the balance sheet? Take the next step together with d-fine and use hedge accounting in accordance with IFRS 9 / IAS 39 so that you will also be able to maintain optimum control of your balance sheet outcomes.

Drawing on our wide-ranging expertise and project experience, we will be able to advise you on the practical application of hedge accounting to your own hedging strategies - from identifying your exposure to commodity risk and the documentation of your hedge relationships through to the measurement of hedge effectiveness and accounting logic.

Our experts will work together with you to identify additional potential for your company.

Read more:

Hedge accounting for commodity price risks

Market regulation

The steadily growing number and complexity of requirements for energy and financial market regulation at the European and national levels brings with it ever new challenges for the energy business and industry. For energy and commodity trading, the regulations of REMIT, EMIR and MiFID II, for instance, have far-reaching consequences for the relevant systems and processes.

Your company will need to migrate all requirements into your operating business processes by the relevant deadline. To do this, it is essential that regulations relevant for your business areas are identified early and this information is used to determine the actions that need to be taken by your company.

d-fine will provide you comprehensive support - from initial analysis through to implementation and operationalisation of regulatory requirements. These include, in particular:

  • carrying out a comprehensive impact assessment,
  • defining a target image and developing a joint implementation plan,
  • efficiently implementing all necessary adjustments or expansion for existing processes and systems, and
  • training your employees to optimally prepare for the changes to take place.

Our experts will be pleased to speak with you about the status of the current regulation process and consequences of this for your company.