Energy & Commodity Trading


With over 200 supported projects in energy trading in medium-sized companies and international corporations, we are well familiar with current challenges and best practices.

Our focus topics include:

Renewables / Contractual Assets

Long-term marketing of power generated from renewable energy assets as an essential component of supply strategies. Due to the coal phase-out, large energy suppliers are looking for alternative assets to cover their power supply needs. In addition to long-term contracts for virtual power plants (VPPs, VTPs), these include more and more multi-year supply contracts for energy generation from renewable energy assets (PV, Wind, Hydro, Biomass), so called Power Purchase Agreements or PPAs.

The following challenges, amongst others, arise during negotiations and in the operational management after the “contractual assets” started delivering:

  • Contract negotiations: Pricing of long-term supply contracts taking into account e.g. seasonal and regional solar irradiation as well as efficiency losses / degradation of solar parks
  • Data flows: Daily exchange of numerous information between asset owner / plant operator and marketer (e.g. solar park: forecasts, auction results, generation volume, inverter and plant availability, solar irradiation)
  • Settlement: More complex price / settlement formulas as well as compensation payments
  • Risk management: Derivation of long-term price timeseries for the calculation of market risk as well as determination of credit risks for new or only recently established asset owners / consortia as counterparties

We already successfully supported a number of implementation projects for contractual assets (PPAs and corresponding certificates, as Guarantees of Origin / GoOs) and know the challenges involved in the appropriate translation into processes, organizational setup and IT systems.

PMI & Carveout

The restructuring of companies in the energy industry through mergers or the carve out of business areas continues. Due to the cost pressure resulting from the energy transition/revolution, energy corporations in particular are undergoing a restructuring process, which is reflected in mergers, outsourcing and / or also the swap of business areas.

The post-merger integration (PMI) or carve out projects set up in this context mainly cover the following topics:

  • Organisational adaptations
  • Analysis of necessary process changes
  • Adjustments in relevant IT systems along the value chain
  • Adjustments in reporting and steering
  • Stakeholder and change management

With our extensive experience in such large-scale projects, we can efficiently support you in identifying necessary changes, their operational design and their timely implementation (frequently under high time pressure).

Steering & Reporting

As part of a corporation or mid-sized utility, energy trading floors are their mother company’s market intelligence center. A state-of-the-art Steering & Reporting function creates transparency, both on internal performance and compliance, and on value-adding external data.

New products and markets, regulatory changes, and corporate restructuring need to be handled in an efficient manner. Automation, cloud migration, as well as off- or near-shoring can drastically increase performance and efficiency, and allow resources to focus on value-adding activities such as analytics.

Last not least, a historically grown portfolio structure can typically be streamlined to increase transparency and trader buy-in.

Quant & Analytics

We help commodity and energy traders to improve time-to-value and data-to-information. The value of timeliness and scalability grows in increasingly efficient, intraday-driven markets. Finding the right API that marshalls, caches and integrates data streams in real-time and choosing matching cutting edge auditable valuation and risk models is as important as optimizing the allocations and interplays of back-, mid- and front-office quant-capabilities.

Architecture and Performance Optimisation

Energy trading landscapes are in a state of continuous change. The introduction of new technologies enables more comprehensive data analyses, a high degree of automation / process stability and cost reductions. New and changing business models require adjustments to systems and interfaces and increase the amount of processed data equally to changes driven by market design and regulators.

Many times, a combination of such changes lead to deteriorating system performance. At the latest when the end-of-day process is not completed before trading starts and critical risk KPIs are not available, the day-to-day business is at risk. Route-causes can be found on various levels. With our extensive experience from multiple projects, we will gladly support you with the:

  • Analysis of performance issues (infrastructure/applications/business processes)
  • Identification and evaluation of optimisation measures (from workarounds to strategic changes in the IT architecture)
  • Efficient and successful implementation

We are looking forward to share our know-how with you and support you in the efficient and successful implementation of your respective projects as well as the resolution of your challenges.

© 2024 The Advisory House AG