SunGard Identifies Ten Trends for Utilities in Energy Trading & Risk Management

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SunGard has identified ten trends for utilities in energy trading and risk management.

Trip Ray, managing director of SunGard’s Energy & Commodities business, said, “Utilities are in the midst of a transformation; from the emergence of supergrids and renewable energy to continued focus on evolving regulations. To capitalize on these changes, utilities are looking to introduce innovations in technology to help drive revenue protection and decrease operational costs. For instance, they are seeking to increase data transparency, replace aging infrastructures for improved efficiency, and leverage technology to reduce operational risk.”

SunGard has identified ten trends for utilities in energy trading and risk management:

1.    As “supergrids” continue to connect many smaller and more local grids, energy buyers and sellers will have a broader, more competitive market open to them, impacting energy trading timing and prices.

2.    Compliance regulations are driving increased trading of renewable obligation certificates, renewable energy guarantees of origin, and climate change levy exemption certificates which will require utilities to have the proper technology in place to support these trades.

3.    Renewables are pushing utility companies to increase their analytics and operations capacity in order to balance fairly predictable demand with the more unpredictable nature of on-and-off sources like wind and solar.

4.    Discussion around the creation of a single European energy market is driving increased scrutiny and demand for regulation for energy traders across Europe.

5.    In an effort to bolster lagging support for emissions markets, some governments are considering setting minimums for carbon prices in active or developing cap-and-trade markets to encourage market participation.

6.    As more utilities switch to natural gas for power generation needs, companies are dealing with operational convergence issues resulting from the differential nature of the gas and power markets, thus prompting them to seek solutions that holistically manage those market operations.

7.    Smartgrids will continue to fuel increased focus on data for decision support and analytics, and big data will drive utilities to create warehouses for aggregation.

8.    Costly efforts to decarbonize the power industry are prompting energy companies to develop solutions that offer visibility, manageability and predictability into energy use, cost and performance.

9.    Effects of weak demand, uncertainty in energy costs, and stagnant rate cases are driving the use of statistical modeling for improved credit risk analysis and to drive collections efforts.

10.    Utility companies will continue to move IT to private clouds to help them reduce costs and focus on core competencies.

“The utilities sector, like much of the wider energy market, is in flux as it awaits word on several key regulatory requirements,” explains Patrick Reames, managing director of CommodityPoint. “From aging infrastructure to the movement towards aggregating and communicating big data to the many different regulatory concerns, utilities are at a cross roads and it's clear they will need to increasingly leverage technology in order to meet and stay abreast of these emerging challenges in the coming years.”

About SunGard’s Solutions for Energy & Commodities
SunGard's energy and commodities solutions help energy companies, corporate hedgers, hedge funds and financial services firms to compete efficiently in global energy and commodities markets by streamlining and integrating the trading, risk management and operations of physical commodities and their associated financial instruments. Through real-time data, connectivity and analysis, SunGard's energy and commodities solutions help customers achieve transparency and regulatory compliance, address end-to-end transaction and operational lifecycles, and meet time-to-market needs with flexible deployment options. For more information, visit http://www.sungard.com/energyandcommodities.

About SunGard
SunGard is one of the world’s leading software and technology services companies. SunGard has more than 17,000 employees and serves approximately 25,000 customers in more than 70 countries. SunGard provides software and processing solutions for financial services, education and the public sector. SunGard also provides disaster recovery services, managed IT services, information availability consulting services and business continuity management software. With annual revenue of about $4.5 billion, SunGard is the largest privately held software and services company and is ranked 480 on the Fortune 500. Look for us wherever the mission is critical. For more information, please visit http://www.sungard.com.

Trademark Information: SunGard and the SunGard logo are trademarks or registered trademarks of SunGard Data Systems Inc. or its subsidiaries in the U.S. and other countries. All other trade names are trademarks or registered trademarks of their respective holders.

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Adriana Senior
SunGard
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