Well, it is time for „The World in 2025″, so ROITI’s CEO Ventsislav Topuzov shares some opinions about the world and makes a few bets on key impacts on the ETRM market that await the business in 2025..

ROITI’s business was largely driven by projects related to renewables and regulations in 2023 and 2024. While I still expect a strong renewables-driven project portfolio in 2025, I would argue that some market fundamentals are shifting, and there will be a slow move toward other topics—not only for us but for the overall market. I will outline briefly the key trends I perceive and how they will likely impact our markets.

3 Key Trends in The ETRM Market

1. Market volatility will continue across leading markets: power, gas, oil

I would argue that power volatility in the new energy mix will stick around for a while. At the start of 2025, prices in Germany and the Nordics were in the top hundreds of EUR per MWh. By now everyone is fully aware they are going negative once the sun shows up. RES investments may be slowing down but the energy mix is already fundamentally changed and volatility is going to be present for some time.

While Russian gas imports to Europe had already declined, they ceased entirely on January 1st. As I am wrapping up this article in late January, Azeri gas supplies are also disrupted due to issues at Shah Deniz. Experts may argue that the Russian suspension has already been priced in and is no longer a driver of volatility – and LNG is now well-positioned.  However, Western Europe’s economic and political situation is not always predictable, adding to the uncertainty that is driving petrol prices.

2. Grid investment will slowly start being reflected in traders’ portfolios.

There are tens of billions of announced investment plans worldwide. Germany is planning to expand their electricity grid investments to around 650 billion euros by 2045. Similarly, the US has announced 14.5 billion US dollars invested in reliable grids at the end of 2024, according to GDO.

While this is a market enabler, utility companies will be exposed to metals prices. As for the vertically integrated companies, where the trading units are often centralized risk managers, metals and interest rates hedges are likely to enter their portfolios again.

3. AI adoption will shift from “Let’s play around to see what we can do” to “Here are the next 3 concrete business cases for our company this year”

Over the past two years, AI has been a massive buzzword, and there has been much experimentation with what it can and cannot do. There are also legitimate concerns about what happens with the data. Now that AI is gradually becoming accepted as a new normal, the focus will shift to concrete business cases that reduce mundane tasks or improve analytics.

How Are Those Impacting The ETRM Space

If the above predictions are met, they will have a very specific impact on ETRM systems.

• New integrations: High volatility is already attracting financial players like hedge funds to the energy markets. In addition to new entrants, vertically integrated utilities will start integrating metal products into their portfolios.
• Way more focus on analytics: both driven by volatility and by the inertia of increasingly adopting AI into the IT landscape
• AI tools will start addressing more mundane tasks: “reading” contracts and booking trades, cleaning up data, and assisting ever more in trading systems support.

What Are We Doing About It

ROITI’s core strengths are generally in ETRM integrations, so we are expanding our team in this area. On top of that, we are heavily investing time in ETRM onboarding, so we ensure the quality we bring to market improves consistently.

We have been developing a Data Science team for four years now – and it is finally starting to seem mature with serious expertise. We are confident to bet on success-based fees for potential analytics engagements.

Lastly, we are attending E-World in February 2025 to tell you more about it .

Author: Ventsislav Topuzov

Editor: Hristina Tankovska

References:

Clean Energy Wire

European Environment Agency

U.S. Department of Energy, GDO