I had one of those calls recently. The sort of call where a vendor wants to know why we aren't covering them as much as their competitors and is all upset about it. I get those calls, as all analysts do I am sure, from time-to-time and from our point of view they are both infuriating and also an opportunity. They are infuriating because most often the vendor calling to complain is one that you have been trying to engage for some time but never returns your calls or email. An opportunity because it finally gives you an opportunity to discuss the issue.

The role of an analyst is one that requires constant interaction with all players in an area such as ETRM software for example. The analyst wants and indeed needs to talk to vendors, suppliers, consultants, integrators, end users and more besides to keep up with everything that is going on. It is an aspect of the job that I find most rewarding.

Did you know that we offer a Directory of ETRM Vendors and Products that is available for a small subscription and is updated by our analysts on a quarterly basis? It is designed to help those looking to pull together long lists of products in procurement projects or for those who like to keep upto speed with the latest developments.

The Directory is available for subscription here.

The UtiliPoint Commodity markets study is underway and getting a very good response. If you want to offer your views on how commodity markets changes are impacting traders and ETRM/CTRM software then please do take a small amount of time to fill out the survey which may be found here. Meanwhile, Patrick Reames has inspected he early responses and wrote an article on market liquidity based on those responses. It is well worth a look and shows the kind of data this study will eventually generate.

When talk turns to wind power, for most people the first image that springs to mind is one that consists of many huge turbines dotted across the landscape or out at sea. It is very much a large-scale vision. Yet today there is increasing interest in wind turbines that are small enough to mount in backyards and local parks, and on the roofs of houses and office buildings. Could these turbines, that in many cases look like attachments for a giant hand held cake whisk, become a big part of the energy future?

As with any nascent technology it is not an easy question to answer, but what has become clear in recent months is that they are slowly moving towards the mainstream. This has been particularly evident in the UK, with the recent move by German and European power major RWE—through its UK utility RWE Innogy—to take a minority shareholding and make a capital injection into Quiet Revolution Ltd, a small wind turbine company based in London.

Energy commodity trading funds are getting physical it seems. Discussions with a couple of fund managers and a major provider of commodity OTC electronic trading and deal discovery platforms have all indicated to me in the past few weeks that this is the case. The banks of course have been heavily involved in physical energy markets for some time actually owning assets like generation and oil & gas reserves in the ground and the Enron experience apparently taught everyone at the time that connection to a physical trading desk was paramount. Despite that, many fund managers have actually been focused on financial commodity markets until recently.

What is causing this sudden interest in trading physical energy commodities and in OTC markets I wondered? Well, it seems there are several reasons as follows;

For the first time in recent history the UK is now consuming more energy than it is able to produce. Over the next 20 years natural gas reserves will become depleted and the UK will become increasingly dependent upon imported energy. This increased dependency on imported energy and the December 2007 announcement of a Strategic Environmental Assessment (SEA) to examine additional UK offshore wind energy generation capacity may be responsible for many of the recent investments in existing and new wind energy initiatives in the UK. In addition the Climate Change Bill to be debated in the House of Commons this week will commit the UK to cutting greenhouse gases by 80 per cent by 2050. An amendment put down by the UK Government will also require all companies to publicly reveal their greenhouse gas emissions by 2012. In recent years attractive subsidies and high electricity prices have turned Britain’s onshore wind farms into extraordinary profit centres, with a single turbine capable of generating significant profit per year. According to new industry figures, a typical 2 megawatt (2MW) turbine can now generate power worth £200,000 on the wholesale markets.

Talking to a number of folks around the business, one trend that appears to be gaining ground is algorithmic trading in energy and commodities. Essentially, this is computer automated trading based on some algorithm that identifies trading opportunities. Algorithmic trading is commonly used on other Asset Classes but has been slow to take off in energy and commodities due to the complexity of trading but is now starting to take off according to our sources.

There is no doubting the European Union (EU) knows what it wants to do in terms of cutting emissions and renewables growth. Its 2020 vision, to cut greenhouse gas emissions by 20 percent on 1990 levels and for 20 percent of the region's energy mix to come from renewable sources, is one of its core and oft debated goals. The problem is about how it gets there. Knowing what it wants, and then actually achieving it, are two very different things.
This is clear in the many questions currently being raised by member states and it was brought to the fore at a recent two-day summit of EU leaders in Brussels. Whilst leaders agreed to stick to the 2020 plans, there were clear divisions over how to share the emissions cuts, particularly given the impact of the current financial crisis.

UtiliPoint s.r.o. - A 100% UtiliPoint International, Inc. owned company - is now the seat of our European operations here in the Czech Republic. It's only taken 10 months to form the company owing to Czech rules, regulations and requirements so celebrations are in order!

Our full details:

UtiliPoint s.r.o.
Frantiskanska 6
Brno 602 00
Czech Republic

IC: 283 05 728, DIC: CZ283 05 728

Michael Coleman thinks it is. He has been around the ETRM block once already and has seen and experienced first-hand the issues faced by traders and risk managers in the commodity space and, with Hyper Rig, he and his colleagues are trying to solve many of the issues they have observed over the last several years. But what is Hyper Rig?