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Within a few years intraday power trading will, for the large part, be automated

Press review: MBI Energy 4.0

„Within a few years intraday power trading will, for the large part, be automated“

 

Software company VisoTech reports on a well-stocked project pipeline. “There are a few tenders which we are involved in”, says managing director Johannes Püller in a conversation with Energy 4.0. According to his estimations the number of customers should rise to 30 by the end of the year. Currently the Viennese company can count 25 customers, including energy companies Steag, Verbund, Tiwag, Iberdrola, SN Energie from Switzerland and Stadtwerke Leipzig.

VisoTech sells software for fully-automated power trading, risk assessment or schedule and balancing group management. The autotrader is oriented towards continuous intraday trading on the Epex Spot and Nord Pool power exchanges. Other fields, such as day ahead transactions and over-the-counter trading, are not the main focus, but are analysed.

In the first half of the year the intraday market reached a volume of 34.7 terawatt hours on the Epex Spot, which corresponds to 13 percent of total spot trading. Therefore, it is a relatively small segment, which has two characteristics: firstly, it is showing strong growth because the demand for short-term balancing of portfolios is becoming greater with the increasing production of renewable energy. The volume of wind power production is particularly difficult to predict, the actual production quantities are only known at the last minute.

Secondly, the intraday market is exceedingly volatile, there are extremely fast price movements. “The closer the delivery becomes, the more price and quantity fluctuations there are”, explains Püller.

The largest contracted volume occurs in the last two hours before the close of trading. It is difficult for a trader to keep track of everything. “It is almost impossible to do it manually”, says Püller.

Around 20 percent of trading is automated

The autotrader software is available in different packages, which cost between 80,000 and 250,000 Euros, whilst maintenance costs are roughly 15 percent per year. Comparable solutions are offered by only two competitors, states Püller. These are namely the software company Soptim from Aachen and Likron, a company from Munich specialising in quantitative strategies.

Every day traders place more than 300,000 orders on the Epex Spot, which are executed around the clock. As a result, there are up to 35,000 transactions per day. The intraday market now occupies a key role in the direct marketing of renewable power.

Püller estimates that around 20 percent of intraday trading on the Epex Spot is automated. He is convinced that that share will increase sharply, as trading is becoming ever quicker. “Soon a manual trader will not even get a glimpse of attractive orders because an algorithm will have already executed them”, says Püller.

As such the automation has a snowball effect. “In a few years intraday power trading will primarily be automated”, says VisoTech’s managing director convincingly.

Another stimulant is the planned coupling of the European intraday markets. Merging orders across borders would further increase the complexity of intraday power trading.

However, it’s not there yet: the so-called XBID project is highly complex, as there are 14 local implementation projects which the respective transmission network operators and power exchange operators are involved in.

When it comes to reaction times, an algorithm is superior to every human trader.

The automation itself will not make traders redundant, but their role will change. “More than ever they will have to work strategically”, believes Püller. And besides, they will have to feed and monitor the algo-trading.

Helmut Kipp 

 

Article from: Energy 4.0, 1. August 2017, Nr. 8; © 2017 Energy 4.0. MBI Martin Brückner Infosource GmbH & Co., Frankfurt / Main.

Über Energy 4.0 & MBI Martin Brückner Infosource

Als hochspezialisierter Informationsdienstleister führt MBI seit dem Jahr 2013 den Geschäftsbereich Energy & Commodities der Dow Jones News GmbH weiter. MBI versorgt Marktteilnehmer mit aktuellen und hochwertigen Fachinformationen für die Bereiche Stahl & NE-Metalle, Energie und Agrar.

Die MBI-Publikationen und Online-Informationsplattformen bieten eine verlässliche Grundlage für Geschäftsentscheidungen und verschaffen den Lesern einen Informationsvorsprung, der in den schnellen und intransparenten Rohstoff- und Energiemärkten von entscheidender Bedeutung sein kann.

Seit Juni 2016 liefert MBI mit Energy 4.0 einen fundierten Überblick über alle praxisrelevanten Entwicklungen der Digitalisierung – speziell für die Energiebranche. Der Fokus liegt dabei auf Best-Practice-Stories.

Webseite: www.mbi-infosource.de

Heftabbildung Energy 4.0

© 2016 by Energy 4.0

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