Vienna, September 3, 2019 – The Swedish energy trading company Modity is preparing for the expansion of the Swedish intraday market, and with VisoTech is investing in automated energy trading. In this way the company can increase trading volume and improve risk management while at the same time tailoring their trading algorithms to the individual needs of their customers.
All signs in the Nordic market indicate a likely increase in volatility, speed and complexity. Currently, power in this market is still traded in 60-minute blocks. In 2023, 15-minute blocks are planned to be introduced, in order to comply with EU regulations. Additionally, the volume of renewable energy is growing steadily in northern Europe. More and more solar and wind energy is being fed into the power grid, increasing the need for trading closer to delivery time.
Energy trading in the Nordic energy system needs to become more flexible, requiring automated trading that also takes into account solar and wind forecasts in real time.
Modity is a rapidly growing energy trading company focused on energy producers and industrial customers. The company employs around 40 people and in 2017 generated sales of 2.9 billion Swedish kroner, around 270 million euros. “In 2023, the Nordic power market will adopt the quarter-hour standard. The result is four gate closing times per hour. In line with increasing renewable energy in the market, price volatility is also increasing. These fast changes in the market and the increased granularity can best be mastered through algo-trading, “said Kruno Kuljis, Head of Physical Trading at Modity. Modity’s goal is to use customised algorithms and information channels adapted to each of its retail customers.
“We are pleased to have gained our first customer in Sweden with Modity. The Nordic energy market gives us the opportunity for further growth. With our products, energy companies here can develop a competitive advantage – especially the early adopters, who will be well prepared for the anticipated acceleration of the market, “explains Jürgen Mayerhofer, Managing Director of VisoTech.
Decision criteria: individualised adaptability
“Energy trading in the Nordic energy system needs to become more flexible, requiring automated trading that also takes into account solar and wind forecasts in real time,” says Kruno Kuljis. Modity tested several systems, choosing VisoTech’s platform; the implementation is already running. One of the crucial points for the decision was the adaptability of the system. According to Kuljis, “Each customer has their own risk philosophy. That’s why we wanted to include them in our portfolio and let computers and algorithms act accordingly. That we now have the opportunity to develop our own algorithms in Python is an important factor.”
With our products, energy companies in the Nordics can develop a competitive advantage – especially the early adopters, who will be well prepared for the anticipated acceleration of the market.
New challenges for specialists
Kruno Kuljis does not believe that the Swedish energy traders who are still trading manually will lose their jobs due to the technology change. “On the contrary, the entire industry needs knowledgeable, innovative people with good knowledge of the energy system. Traders’ skills are needed to support algo-trading as well as long-term trading. The industry also needs people to programme and manage the trading algorithms. “
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