The international energy company E.ON focuses on energy networks, customer solutions and renewable energies. Its Munich-based short-term market access manages E.ON’s trading portfolio for gas and power in the day-ahead and intraday markets for German and Austrian customers. Due to the volatility of the renewable energy portfolio, traders constantly adapt their position in the markets in order to balance their portfolio. This requires a reliable, fast system with deal capturing and a high level of automation. Therefore, E.ON selected Powel DeltaXE as their short-term trading and scheduling platform. They went live with the platform in April 2017.
Like the entire energy sector, E.ON has seen substantial change in its business over the last few years. One of the greatest was the transition from being a conventional power producer to a more customer-focused company. Within its short-term trading unit of E.ON Energie Deutschland, this transformation required a system that was flexible and allowed for customisation. In addition, specifically the 24/7 operation called for high standards regarding the system´s reliability and ability to support operations, at all times.
Challenges and opportunities with renewable power trading
Germany is leading the way in the switch to renewable energy. In 2017, a record-breaking third of the country's electricity came from renewable sources. It was also a record year for wind power production. Last year, German wind turbines produced 12 TWh more than in 2016, ending the year with 100 TWh.
As a result, short-term energy trading is mainly about renewable energy sources. Given the intermittent nature of solar and wind power, traders face constantly changing positions and market situations.
As Lisa Pflaum, energy trader at E.ON Energie Deutschland, puts it, “Sometimes it feels like you need to be a meteorologist in order to be a good trader. You never quite know what your day will look like, of course you know the forecasts, but you do not know whether the outcome will be the same.”
To concentrate on the developments in the market, short-term traders need a reliable and fast-moving system that can deal with day-ahead and intraday trading needs. This includes a high degree of automation, allowing the trader to focus on the actual trading while the system runs in the background, alerting them to any changes or events.
Lisa Pflaum is an intraday and day-ahead trader in power and gas, focusing on the German market. She has a portfolio consisting of wind and solar power, as well as retail volumes and finds that DeltaXE helps make her working day easier and more efficient.
“DeltaXE helps me combine these portfolios, making them easily visible and tradable. I see a live update of my position in DeltaXE and as it integrates all the information you need from the trading systems, it is a very easy system to use,” she says. “Thanks to the automation, I just have to look at DeltaXE to see my position, and I can really focus on what is happening in the markets at that time.”
What makes a good deal capturing and scheduling system?
A portfolio management system needs to fulfil high performance and automation requirements. With its ability to automate processes and interface to ETRM systems using standard tools with high-performance, DeltaXE proved to be the best solution for E.ON.
The Powel DeltaXE platform is an all-in-one energy trading and logistics solution for energy and gas markets. Due to the modularity and configurability, DeltaXE can be fully integrated with external trading systems and support trading and logistics for most European markets. At E.ON, it is used to manage the short-term trading position for power and gas for the day ahead and intraday markets, with deal capturing and automated processes for power scheduling and gas nomination.
Roman Fricker, Specialist for Short-Term Optimisation at E.ON Energie Deutschland, was the project lead for the implementation of DeltaXE. “It is no longer about one single power plant delivering the energy, we now have a decentralised system containing a lot of different, smaller assets providing the electricity. This needs a different type of management in terms of meeting supply and demand,” he explains.
“We decided for DeltaXE because we know that DeltaXE already has a very good customer base, therefore we knew that our competitors are already using it successfully. We needed a solution with existing and proven processes that we could leverage and implement quickly.”
Partners in innovation
Innovation is at the heart of Powel´s work, and they embrace clients that have an innovative and open approach. Powel already helped Uniper to become first movers into the cloud by implementing its 24/7 operational systems in the Azure cloud, and in this project with E.ON, Powel successfully delivered DeltaXE as a cloud solution for E.ON.
“We try to be innovative and stay ahead of the market. We had a clear strategy of moving to the cloud,” says Bernhard Schütz, IT Project Manager E.ON Business Services, who still sees many opportunities he wants E.ON to explore further. “We want to handle and analyse our data, as well as to utilise machine learning and automation. You need to build up the knowledge to deal with these advances and challenges,” says Bernhard Schütz. “The main reason for going into the cloud was our ability to implement it very quickly. Also our architects agree that this is a good architecture, which gives us the confidence that our decision was the right one.”
Powel is currently working on the implementation of Powel Intraday Trading and Algo Trader to further automate and optimise short-term trading. This offers a complete algorithmic trading platform, enabling the rapid design, testing, deployment and refinement of automated strategies that leverage unique trading techniques. Based on a white-box approach, Powel Algo Trader allows customers to work directly in the code to customise strategies specific to their market needs.