Power Scheduling and Gas Nomination Solutions for European Power and Gas Markets

The study at a glance

Challenges to keep in mind

The world of energy trading and its distribution is continually changing due to the constant arrival of new regulations and new technologies. These changes challenge utility companies and are thus a driver of change when assessing scheduling applications. Three of the main challenges are:

Regulatory requirements

Scheduling and nomination management as well as IT solutions are influenced by changing legal requirements. The relevant regulations are generally adapted in cycles and include changes such as new data formats and requirements for supplier change management or the shifting of more responsibility to the DSO. In order to adapt quickly to new regulatory requirements, a flexible solution design is essential and is becoming increasingly important.

Short-term trading (STT)

The development of the intraday market is a consequence of the changing European trading market following the energy transition and nuclear phase-out. The intraday market was a response to managing the production of renewable energy, where forecasts are difficult to establish and often less reliable. As intraday markets evolved, so did the necessity to trade as closely as possible to the time of delivery, which is known as short-term trading. Additionally, the arrival of automatic trading solutions enables utility companies to execute unmanned trading on an uninterrupted 24/7 basis.

Real-time positioning and scheduling

Real-time interaction between traders and schedulers becomes necessary to assure that gate closing times are met and penalties due to possible imbalances are avoided. The scheduling functionality must be fully integrated with the trading system. Similarly, when a scheduler executes a deal for balancing purposes, this has to be communicated to the different branches of the organization including the middle office and the back office in real-time.

Summary and Conclusion

This study shows that there is not one solution that fits every utility company. All solutions have their strengths and weaknesses, therefore the decision has to be based on a thoughtful assessment of the specific needs:

System Solution developed as stand-alone solutions but can either be connected to an ETRM system as an add-on or can be used through ETRM interfaces. In addition, various peripheral functions are offered, such as algo-trading systems, asset management or gas storage management. Many vendors have already developed their application cloud-based via providers such as AWS or Azure.

When it comes to the analyzed functionalities, the solutions vary in terms of the countries the system can model regarding power and gas scheduling. The availability ranges from Germany-only to “all” countries. Almost all solutions support the modelling of EIC Codes and are able to simulate TSOs within European countries with just a few exceptions. Only three solutions are not able to balance different market zones automatically but each of the solutions support all relevant European time zones. For nomination purposes all the systems are capable of automatically matching (IN/OUT) EDI files. However, not all solutions are capable of calculating balancing energy. The short-term trading and algorithmic trading capacities of the solutions greatly vary, as well. Furthermore, the complexity of the implementation, the costs and the offered flexibility and maintenance by the vendor are major differences of the solutions.

Many of the challenges that energy markets face today are already a prerequisite of all scheduling solutions presented. Supporting intraday nomination and being able to operate in the cloud are examples of this.