What do future ETRM systems look like?

The recent Energy Trading Week conference discussed many of the challenges and opportunities shaping the future of our industry, from finance to renewables and carbon emissions. It also discussed the strategies and technologies helping industry players turn these market developments to their advantage, including the panel session What do future ETRM systems look like?

The panel featured Gen10 Founder & CEO Richard Williamson, alongside expert analysts, consultants, and representatives from energy commodity firms to discuss what the industry needs from their ETRM systems, and how ETRM vendors are creating the systems of the future today.

The long watch

Catch the full on-demand webinar recording now.

The Quick read

We summarise the key takeaways for you.

Evolving customer needs and industry trends

As with many panels at the event, decarbonisation was a major talking point. Richard explained how this is encouraging ETRM vendors towards better inventory management solutions, to manage both more granular renewables contracts, and to manage carbon dioxide emissions for energy commodities. This inventory management is a particular strength of Gen10, based on 20 years’ experience working with physical and agricultural commodity traders.

Richard also explained how this is the second time Gen10 have created carbon solutions, but there is much more urgency from the industry now than there was back in 2008, with real growth in carbon offsets and trading recently.

Governance and ESG were also discussed, with the conclusion that more digital governance and provenance are needed. And industry analyst Dr Gary Vasey also explained how clients’ need for greater agility is leading to more ETRM subscription pricing, and to cloud ecosystems.

Architecture and ecosystems

Flexibility was highlighted as an important need by several panellists, who discussed how this is feeding into the trend of ETRM ecosystems, where one core ETRM system is integrated directly with a range of supporting software to create a flexible ecosystem that does exactly what the business needs. It was mentioned that these ecosystems are even more effective when they are not tied in to a single service provider.

Richard explained how this flexibility can be carried over into user interfaces, such as how each user at a Gen10 client organisation can create their own drag-and-drop dashboards and reports and customise their documents and workspaces however they need them. The key is how the data is structured in order to give clients the optionality they require, and that is where Gen10’s focus on the details and the exceptions has paid off.

But it seems from other panelists that even today, getting the data right in the first place so that they can report on it remains a challenge. There was also some discussion of the aspects of ETRM that will likely stay the same, at least in the medium term. For example, viewing trades, P&L and position reporting may not change as rapidly as advances in analytics, inventory management and trade process automation, so one potential future ETRM ecosystem could involve the organisation’s current system (with all its limitations), connected to modern commodity management apps that provide the advanced features energy companies need.

The session ended with a question around The Big Four tech companies and whether Google, Amazon etc would disrupt the space? Analyst Gary Vasey referred to a survey he conducted where most industry participants think not, but that through their cloud architecture and access to their innovations are enablers for others to innovate and disrupt. This has already been proven by Gen10, who already host our cloud solutions on AWS and leverage their AI/ML and use it for faster development of new commodity management functionality and insights.

The general consensus on ETRM architecture was that monolithic systems stifle innovation while a modular approach encourages it.

It’s all about the data

Whether between your organisation and partners, suppliers & customers, or between different parts of your ETRM ecosystem, data will need to be much easier to share. Discussions around data have often revolved around standardisation, and this session was no exception, although Richard pointed out that perhaps we should not be framing this as a question of “standardisation” but of “organisation”.

This terminology avoids some of the sensitivity around the idea of standardisation, and the questions around how much company information should be shared with potential competitors. With analytics technology for example, the real challenge likes in organising the data; once you have the data organised you can visualise and manipulate it. But until businesses organise their data, the full potential of digital transformation will not be fulfilled.

Gary Vasey also discussed how Richard frequently talks about standards and collaboration, and that is the direction the industry should be moving in, but whether it will happen any time soon is another question. However, backing up Richard’s point above, it was pointed out that companies need to standardise better internally too, as each team may be using a different vocabulary and be looking to get different outcomes from using their ETRM.

 

Richard ended the session with some advice for those looking to take the next step towards their own ETRM of the future; that you should consider your procurement and selection process. If you want innovation in your technology you need to invite the innovators to do it; don’t let your processes keep you in the thinking and technology that has prevailed for the last 30 years.