EnergyPoint

2004 Consensus Software Awards

Product Description

Mincom EnergyPoint is a fully integrated energy trading, and risk management solution, written specifically for the Australian National Electricity Market (NEM), that targets wholesales and retail participants in the energy market.)

The deregulated electricity market, one of the most volatile commodity markets in the country, must deal with three key business risks that make it unique from all other commodities - Demand, Price and Transfer risk. These can be explained by the following hypothetical example.

If we take a single ½ hour trading interval where an abnormally hot day results in 500MWh of consumption in excess of forecast demand levels (exposure).  Because this excessive volume was not forecast, it is unlikely that hedge cover is available to address this situation.  Consequently, this energy must be purchased at the open market or pool price.  This is DEMAND RISK. 

Due to the increase in demand a generation unit fails which constrains energy supply.  Consequently, an average pool price of $25/MWh rockets to $3,000.  This is PRICE RISK. 

While the pool price has now moved 12,000% from the average, the customer is still paying the retail contract level of say $30/MWh. This is TRANSFER RISK.

The cost of this exposure for a retail electricity participant would be; Demand Risk [500]* (Price Risk [$3,000] – Transfer Risk [$30]) = -$1,485,000…(for a 1/2hr trading interval!)

Mincom EnergyPoint assists in eliminating these risks by providing more effective analytics, pricing methodologies and portfolio management processes.  Traders and pricing managers can structure and rapidly execute risk mitigating and market winning strategies to minimise exposure, spread cover and costs, and layer different wholesale pricing mechanisms.  The result is a better matched and diversified pricing curve and a more competitive price offered to customers.

It manages this by uniquely incorporating portfolio management, front and back end office processes, comprehensive data management and a design architecture that delivers unprecedented control and flexibility in deployment, configuration, business logic and customisation. The solution has an emphasis on data right and data first, with the primary objective being to allow customers to manage core business processes from deal capture through to contract settlement, using the same data set. This ensures the effort required to capture and maintain data is substantially reduced and accuracy is increased.

Mincom EnergyPoint has the functionality, robustness and versatility to assist customers in achieving their strategic goals. This is achieved as:

• Mincom EnergyPoint is the only solution available that was built from the ground up to address the idiosyncrasies of the Australian market - providing the underlying flexibility to adapt to constant change within the market. This flexibility provides a solid foundation for export opportunities given the progressiveness of the Australian market.

• Customers gain access to the most comprehensive energy trading, pricing and risk management solution available today, backed by Mincom’s worldwide support, development, consulting and services network.

• Mincom EnergyPoint helps to deliver accountability and drive strategy by maintaining key information on trading activity and risk exposure – mandatory for effective governance.

• Mincom EnergyPoint is functionally rich with

• ‘Real’ and immediate portfolio simulation, evaluation and reporting,

o    Accurate, consistent and controlled portfolio and market data,

o    Automated contract nomination and sensitivity simulation allows for more prolific trading and pricing with greater time granularity,

o    Optimized deal mixing and portfolio management to achieve more diversified and efficient wholesale pricing strategies,

o    Facilitated complex deal structuring and trading book management,

o    Proactive sensitivity management and re-valuation,

o    Comprehensive risk management and benchmarking and variance analysis

o    Total performance analysis from purchases through the transfer pricing process to retail sales

Innovation

Mincom EnergyPoint is innovative across the application responding to the energy markets need to leverage a large volume of underlying data. Mincom EnergyPoint uses innovative tools to communicate data in 'real- time' to the right people allowing them to use information more efficiently than ever before. The way the data is displayed and deployed supports the trading and risk management decision cycle more effectively than the competition, thereby providing a competitive advantage. (patents pending) Recognising the need for each market participant  (potential customers of Mincom EnergyPoint) to incorporate their own unique trading methodologies, a powerful development environment, customisable business logic layer, graphical user interface customisation and reporting tool is also incorporated.  This “Studio” component is innovative in its own right as it is capable of being utilised by other applications to provide equal architectural flexibility as is currently available within Mincom EnergyPoint.

Performance

BUSINESS

Mincom EnergyPointis designed to minimize risk and maximize portfolio optimization and efficiencies throughout supporting data operations.

Beneath an innovative user interface, the emphasis is on data right and data first. The initial objective of Mincom EnergyPoint is to relieve the skill sets of an organization, by allowing them to refocus on tactical operations, rather than data inputs, validation and normalisation.

TECHNICAL

The underlying software is written in PLSQL, using the in built Oracle 9i SQL engine. This supports the efficient, high performance processing that is required to address the high volume, mission critical data that is transacted within the solution.

Energy trading operations and pre-deal analytics are entirely dependent upon meter information and market/sensitivity data from external market systems and custom data sources. The integration and data interfacing features of Mincom EnergyPoint are imperative element to the solutions data warehousing capability

Potential

Mincom EnergyPoint satisfies the requirements for risk management and trading in the major markets of North America and the UK including Power Pool (UK), Ontario (Canada), Alberta (Canada), NY ISO (New York, USA), CISO (California, USA), NE ISO (New England, USA), P ISO (Pennsylvania, USA), NEM (New Zealand) and NEMMCO (Australia).

Other information the judges should know

Alternate web-site:  www.mincom.com/products/energypoint 

Content2004Copyright©Mincom
Format2004Copyright©Consensus Pty Ltd

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