A tidal wave of change
The Nordic market is undergoing the most radical market changes since the introduction of the Energy Acts in the early 1990s, which were the foundation for creating the liberalised power markets. The current wave of changes is being implemented under the umbrella of the new Nordic balancing model (NBM) program. The impact of these changes should in no way be downplayed or ignored. It will not just be a single upgrade, but part of a wider change management program. It will represent a major step change in terms of your business operations, as well as the way in which you interact with business partners, exchanges, the Transmission System Operators (TSOs) and even your trading system vendors.
An ambitious scope
The NBM program is a joint effort by the Nordic TSOs, including Svenska Kraftnät, Energinet, Fingrid and Statnett. The aim being to consolidate and harmonise the Nordic power market with the continental European power market. The NBM Roadmap is extensive. The scope of change is challenging. Multiple parallel changes are being implemented. One of the major changes includes the NBM 15 min Imbalance Settlement Period (ISP), which is scheduled to go-live, Q2-2023. That will be upon us very soon.
Spotlight on the 15 min market change
This market change can be summarised as transitioning the power trading industry from 60 min (hourly) time resolution to 15 min (Quarterly). This will include the ISP as well as the Market Time Unit (MTU) for the intraday and balancing markets. The end result is for TSOs to have the granularity for managing increasing volume volatilities and growing imbalances from a renewables driven power system.
Also, traders will have the granularity to manage greater market and volume volatilities by trading closer to time of delivery, giving them the opportunity to adjust and fine tune their positions for reducing imbalance.
Impact of NBM 15 min
Without any question of doubt, we know that the already data intensive power trading community, is set to face an incremental increase in data volumes. Simple logic tells us transitioning to 15 min means traders will have to transition from manageable grids with 24 data intervals to much larger and complicated grids with 96 data intervals in a day.
What does this do?
It places traders in a position of no longer having the same overview they may have had previously. As the number of data points grows in combination with growing intensity from updates coming faster and faster, the complexity grows and reliance on the underlying trading systems will become even more business critical.
Energy trading IT landscapes need to adapt
Trading systems will need to be embedded much more into the overall IT landscape. 15 min granularity and increasing data volumes necessitates improved business operations through automated dataflows across different applications, covering for example forecasting, trading, asset monitoring/dispatching (SCADA), metering, settlement and invoicing. To achieve this, trading operations and their IT architectures will rely heavily on APIs for automated exchanges of data, supporting straight through processing of dataflows.
Future proof your power trading business
At Brady Technologies, we have made it a priority to help our customers adapt to these market changes. We have been making significant investments in short-term power trading.
As a foundation, we have the functionally rich physical power trading operations platform ‘EDM’, covering data management/metering, back-office settlement and invoicing. This has long been a trusted and leading trading platform across the Nordics. To complement this and strengthen the front-office trading capabilities, in line with the new requirements for 15 min granularity, we have developed a short-term power trading platform ‘PowerDesk’
PowerDesk is a modern, SaaS deployed solution, designed by traders – for traders. It has been designed ‘from the ground up’ with the 15 min granularity in mind, delivering no legacy constraints, offering optimal trading functionality combined with advanced decision support.
EDM and PowerDesk – an unrivalled proposition
PowerDesk offers direct connectivity to the exchanges, including quick trade functions for consolidating trade screens and reducing the number of clicks in the system, enabling faster trade executions. PowerDesk is in effect a ‘trader cockpit’, whereby data views are consolidated, including having a live net open position screen, enabling easy data analysis with trade
The combination of PowerDesk and EDM from Brady, offers a complete trading platform that can be embedded into your IT architecture supporting integrated workflows and automated dataflows. A typical example of this would be intraday trades being executed in PowerDesk, then feeding through EDM, that’s integrated with the SCADA system. Respective asset/production plans will be updated automatically, and revised schedules will be sent to the TSO.
Act now to avoid missing out
The NBM market changes are well documented and well known. One thing is for certain, they will be coming and as a business you’ll need to structure a change program for future proofing your business. The new market structures and 15 min granularity means there’s not going to be a small fix to your existing systems, you’ll need to fully embrace digital transformation.
Our advice. Now is not the time to sit on the fence. It’s time to be proactive and be prepared for what’s coming.
Brady has a wealth of expertise in this area – in this region. Let us help.
Written by
Scott Hestenes
Head of Energy Sales
About Brady Technologies
Brady Technologies (‘Brady’) provides trading, risk management and logistics software solutions to energy markets. We help energy trading participants to profit in new ways from the green transition and support ESG requirements.
Our heritage in European energy spans over 30 years. Our customers comprise some of the most renowned energy organisations in Europe, engaged in financial and physical trading on major exchanges including Nord Pool, EPEX, CME, Nasdaq and ICE, as well as OTC.
Brady solutions cater for utilities, independent power producers, asset developers, asset optimisers, energy traders, oil & gas companies, commercial aggregators and hedge funds, helping to optimise trading performance, drive greater visibility and cost control across the trade life cycle.
