Volatility, geopolitical factors, technological advancements–there are many reasons energy and commodity businesses are exploring global expansion. Dale Emmerson, capSpire Managing Director, based in the UK, has witnessed several shifts and evolutions in the last 30 years of global ETRM business.
Looking at the industry today, Dale notes “a rapid change to energy market dynamics over the past 2-3 years.” With more access to foreign markets and increased competition, ETRM businesses are seeking ways to innovate and optimize revenue. “For example, there’s a lot of interest from European and North American companies in the Japanese power markets at the moment as it matures and liberalizes further,” Dale remarks. At the same time, the energy transition towards net-zero targets is reshaping portfolios, with a growing emphasis on integrating renewables and biofuels into the energy mix.
Renewable sources, like solar and wind, introduce volume uncertainty and new challenges for businesses. “Historically, companies were just trying to manage market and credit risk around their assets or trading portfolio,” Dale explains. “With renewables, you’re bringing volume risk and uncertainty into the picture. You’re not always certain of what power you’re going to get and when you’re going to get it. Weather is unpredictable.”
Dale notes the market is moving toward very high-volume, short-term trading driven by complex physical portfolio uncertainty. “With the increase of machine learning, algo trading, and volatility, particularly in Europe, new challenges are created,” he says. “Organizations need technology to manage the move towards real-time position and P&Ls, for example.”
These shifts make modernizing and optimizing even more important. “Many clients I work with rely on trading solutions, architectures, and software products that were perhaps implemented 15-20 years ago. It’s time to evolve.” This is where capSpire’s edge helps cut through the confusion of implementing, improving, or augmenting systems and processes to support modern energy markets.
ETRM is a highly specialized, complex sector, and adding globality to the mix requires even more nuanced industry expertise. “It starts with a strong understanding of underlying principles of trading and risk management, understanding the technology in the space and how to deliver technology solutions,” says Dale. Understanding a client’s unique goals, systems, and pain points is also important. When expanding into new global markets, “it’s not one size fits all,” Dale says. capSpire provides global advisory services, delivery of new technologies and processes, and operational support for businesses with new or established business models globally.
Dale, who joined capSpire in October, finds the firm’s deep knowledge base and holistic, end-to-end approach in the ETRM space refreshing. “This sector is our sole focus and we have deep expertise. If you look at the profile of our people they’ve got 10, 15, 20 years of experience.” Why does this matter for clients? “With other consultancies, you might be starting projects with people that are not even from the ETRM sector. Our team is already up to speed. It means that we deliver meaningful results quicker for less effort.”
With ten hubs on four continents, capSpire is positioned to help clients operate and grow, no matter where they are or where they’re going. To learn more, connect with Dale.
