The Role of ETRM in Renewable Energy Trading

Energy Trading and Risk Management or ETRM software is a set of applications used by commodity traders, suppliers, risk managers, marketers, or wholesale distributors to streamline and automate operations related to the supply and trading of commodities. These commodities can include oil, petroleum, bunker fuel as well as rapidly evolving renewables such as solar energy, geothermal energy, wind energy, or biofuels.  

In this article, we will understand more about renewable energy trading and how an ETRM can play a critical role.

Major Shifts in Energy Trading 

Energy or commodity markets are characterised by volatility and price fluctuations. However, the landscape is witnessing some major shifts. Energy markets are connecting on a global level with local trading centres transitioning into regional markets. The trading is becoming more real-time with commodities such as gas and power being traded in just a couple of minutes. This means companies are now building newer algorithms and intraday trading teams to adapt to this new structure. Moreover, with increasing automation, intraday trades are now based on automated algorithms rather than human intervention or bias. 

The biggest change has been the transition to newer alternative, cleaner fuels to combat the environmental impact following decarbonisation goals. This has enabled the introduction of newer commodities such as biofuels or guarantee of origins for renewable energy consumption, Experts believe that these commodities have evolved into over-the-counter (OTC) trading markets which means that stakeholders need strong price risk management due to limited availability of liquidity. 

So, how can business support their growth in renewable energy trading

Why Should Businesses Choose an ETRM

As government initiatives including tax benefits and financial incentives drive growth in the renewable energy sector, there will be fierce competition on prices for the renewable energy sources. Therefore, the traders, suppliers, and distributors need to move beyond manual processes involving spreadsheets and legacy systems to empower themselves to make swift, profitable decisions in the market with a highly complex supply chain. 

A smart, real-time energy trading and risk management software enables you to automate processes including

that too in a cost-effective way.  ETRM assists you in managing risks and operating in complex integrated supply chains for renewables. It handles complex interfaces effortlessly and manages all front, middle and back-office needs, providing you complete visibility and control over your operations.  

Primarily, the adoption of an ETRM for renewable energy trading helps you in

  • Managing market, counterparty and operational risks more effectively.

  • Integrating external data feeds and systems into a single system, ensuring one version of the truth.

  • Handling operational complexity that can have a direct impact on profitability.

  • Getting a consolidated view of your business to simplify decision making.

  • Managing carbon taxes and emissions trading in both US and Europe.

  • Improving profitability through real-time market-insights, advanced analytics and dashboards.

  • Saving time so you can focus on the overall growth of your business.

  • Reconciling trades in real-time.

Overall, an industry-specialised ETRM as per your needs can give you a complete solution that integrates everything from trading to invoicing.

Since Inatech comes with a deep understanding of biofuels wholesale and retail supply chain, our specially designed ETRM solution for renewable energy, Inatech renewable fuels ETRM will help you streamline trading including carbon credit products trading, hedging, credit, inventory, and cash flows. 

It will also ensure leaner operations by handling different types of feedstocks and biofuel products, supply chains and cost structures across geographies. Additionally,  Inatech renewable fuels ETRM allows remote collaboration through processes and systems in a secure, and efficient manner.

To know more about how you can tap this new renewable energy opportunity with Inatech renewable fuels ETRM, speak to our expert today for a free demo!