The software manufacturer VisoTech is integrating more and more European power exchanges into its automated trading.
IT. In electricity trading, the trend is towards more and more automation, observes Jürgen Mayerhofer. The managing director of the Austrian software house VisoTech and his company are profiting from this development.
The software and trading specialists have been on the market for about four years with their “autoTRADER” solution. At that time, after the solution was developed, they first started integrating the European power exchange Epex into their software. The energy exchange offered a software interface to their trading system.
The plan of the software developers was to conquer the German market first. In the meantime, a whole range of energy providers, such as Stadtwerke München, Leipziger Stadtwerke and Nürnberger N-Ergie are using the solution in Germany. “Germany remains an attractive market due to the number of market participants,” says Mayerhofer.
Growing number of exchanges are supported
But the software providers are now also active in other European markets. Spanish Iberdrola uses the solution as well as Scandinavian utilities. Participants in the north in particular benefited from connecting the Nord Pool power exchange to the automated trading system – the second exchange that was integrated after Epex. Further exchanges followed and will follow. The system can now also communicate with South Pool and with the Hungarian power exchange Hupx, and exchanges for the UK and Turkey power exchanges will also be integrated.
The automated trading system receives the forecast for power production, sees the difference to the delivery obligation and closes a gap automatically through a purchase.
Since last year, it has also been possible to use the autoTRADER for automated gas trading. According to Mayerhofer, the software is connected to Pegas, the trading platform for the major European gas hubs.
Whether dealing with electricity or gas, the automated trading process is similar: in the simplest case, an open position must be closed at a defined price. For example, a wind farm operator regularly receives current forecasts for its electricity production and output. The solution will then trade to close the gap between the delivery commitment and forecast. The automated trading system receives the forecast for power production, sees the difference to the delivery obligation and closes a gap automatically through a purchase.
According to Mayerhofer, nobody has to intervene in this case: “There are many different applications, but the focus now is always to act as autonomously and fully automated as possible.”
For example, a new demand for the solution is emerging through the marketing of flexibilities: An industrial consumer determines how many megawatts of power he wants to provide flexibly when and at what price. The software then trades on the exchanges with the available power.
Trading without direct market access
A new development of the programmers is the possibility to connect customers who have no direct exchange access and thus are not registered with Epex. If they use the autoTRADER software, they can participate in automated trading via service providers. The service provider in turn is also running the solution, including connection to the exchange. “This customer uses the market access of the upstream service provider. You can use it to trade algorithmically on the exchange, as if you yourself were registered”, explains Mayerhofer.
With this technology, the software provider opens up a new target group, namely municipal utilities that are not registered on the exchange because of their size. According to Mayerhofer, around 20 customers are currently using the program. “One of our main target groups is innovative service providers who want to stand up to the big guys. Another target group is large public utilities and energy traders themselves. “
For them and potential new customers, the software is constantly evolving with the help of a technical roadmap. One trend is the geographical extension of the application through the connection of more exchanges, for example in Spain or Italy. Another is optimisation in short-term trading and the connection to the OTC market, where two counterparties can trade bilaterally. “Automated short-term trading is a true growth market,” observes Mayerhofer.
One of our main target groups is innovative service providers who want to stand up to the big guys.
An issue that is not yet directly in focus, but could become important in the future, is the use of the software in a blockchain: the direct trade between two market partners without an interposed exchange.
In its further development, the provider is oriented on the wishes of its large customers. According to Mayerhofer, new product ideas are discussed with customers before any development begins. This is far more effective than developing a new feature as a software vendor in a vacuum in the hope that someone later becomes interested. E&M
Article written by Armin Müller and published in E&M on September 1, 2018. © 2018 Energie & Management Verlagsgesellschaft mbH
The original article (in German) can be downloaded in PDF format.
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Since 1994, the independent newspaper Energie & Management has ranked among the most current, leading energy publications in the German-speaking energy market. E & M particularly addresses energy suppliers, municipal utilities, manufacturers of energy facilities and technologies as well as energy service providers. In addition to the energy industry, associations and politicians are also informed about the latest market developments in the generation and distribution of energy. With its background reports, interviews and commentaries, E & M is today one of the leading opinion-forming media in the field of energy management and energy technology.
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