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The energy trading and risk management market size is estimated to grow by USD 436 million at a CAGR of 4.81% between 2023 and 2028. The global demand for smart grids is rising as nations increasingly focus on integrating renewable energy sources into their power systems. This shift towards more sustainable energy solutions is driven by the need for improved operational efficiency and better management of energy resources. Smart grids enhance the reliability and flexibility of power distribution, enabling the integration of diverse energy sources, including solar and wind. By adopting advanced technologies, utilities can optimize energy usage, reduce outages, and lower costs. The growing emphasis on renewable energy and technological advancements is revolutionizing the energy sector, paving the way for more efficient and sustainable energy systems worldwide.
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The market share growth by the power segment will be significant during the forecast period. The main factor that drives the growth of this segment is the rising demand for resource management and efficient operational processes. In this sector, in order to increase the use of aging technologies, there is also a need for digitization. The requirements for operational efficiencies, cost reduction, real-time tracking, and regulatory compliance mainly propel the demand for the digitization of operations.
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The power segment shows a gradual increase in the market share of USD 570.30 million in 2018. One of the significant applications of energy trading and risk management in the power industry segment is the workflow automation of the energy generation and management system. These tools enhance users' control of the system and help them to work effectively with team members from other teams.
The software segment is crucial in the market. With the increasing demand for software that can mitigate risks and improve overall organizational performance, the software segment is expected to experience significant growth in the ETRM market during the forecast period. Advances in technology, increasing volume of data, and the need for efficient risk analysis and management contribute to this growth. Automated processes, which consume a lot of time and effort, are one of the greatest benefits of using energy trading and risk management. Thus, energy trading and risk management streamline the compliance process, reduce errors, and eliminate the need for costly and time-consuming manual processes. As businesses continue to collect and analyze large volumes of data, there is a growing need for software that offers advanced analytical capabilities.
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APAC is estimated to contribute 32% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The industrial sector of North America is technologically mature, which leads to an abundance of use cases. This will fuel the adoption of software technologies across the region. Given the increase in energy prices and an increased focus on meeting demand from both natural gas as well as unconventional sources, the region is becoming a major contributor to the global ETRM market. In the current market scenario, it has become essential to have well-organized energy management systems in place for efficient energy utilization and to decrease costs. The rising applications of smart grid services and the intensifying competition among industrial enterprises are the main reasons for the growth of the ETRM market in North America.
The market refers to the use of software solutions to manage the buying, selling, and risk management of commodities such as crude oil, refined products, natural gas, NGLs, electric power, and more in the energy sectors. ETRM systems play a crucial role in commercial decision-making on the trade floor by providing price transparency, controlled access, and regulatory compliance. These systems help energy companies manage operations, credit, and risk coverage in a complex and volatile market. The shale gas boom and the increasing focus on renewable energy have significantly impacted the energy trading landscape. The Oil and gas industry continues to dominate the market, but the renewable energy sector is gaining momentum. ETRM systems are essential for managing the unique risks associated with these energy sources. The middle office plays a critical role in ETRM, ensuring that trades are executed efficiently and that risk is properly managed. Technical expertise is required to effectively use these systems, making them a valuable investment for energy companies looking to stay competitive in the market. ETRM systems provide real-time market data, analytics, and reporting, enabling energy traders to make informed decisions and mitigate risk. As the energy market continues to evolve, the demand for advanced ETRM solutions is expected to grow.
The market is witnessing a surge in demand for smart grids globally, propelling its growth trajectory. Investments in smart grids are accelerating worldwide, leading to more efficient utilization across economies. Power engineers are leveraging trading and risk management software to analyze real-time data, optimizing power system output and enhancing the reliability and overall efficiency of smart grids.
Moreover, despite opposition to change and market volatility, the adoption of smart grids continues to rise, especially in APAC, driven by the need for improved power supply and transmission. This trend, bolstered by policies and regulations in North America and Asia, is expected to fuel the expansion of the global trading and risk management market.
The adoption of cloud-based energy trading and risk management software is a primary trend in the market. The adoption of cloud-based energy trading and risk management software has been one of the most important trends in the Global Energy Trading and Risk Management (ETRM) Market. Cloud-based energy trading and risk management software typically offer access to the application via web-based browsers where the admin defines the access level across the organization, and a user is able to simultaneously log in from any Internet Enabled device in the management system.
However, cloud-based trading and risk management software have always been beneficial for SMEs and manufacturing plants that need to reduce their IT expenses. The ease of scaling up is an important advantage for cloud energy trading and risk management software. In addition, the deployment of these solutions does not require wires, programmable logic controllers (PLCs), drawings, or operator interface equipment. Hence increased adoption of cloud-based trading and risk management software will contribute to the growth of the market during the forecast period.
Energy data security-related concerns are a major challenge in the market. In recent years, energy and utility organizations have been high-profile targets for hackers, cyber terrorists, and foreign governments. With relatively few keystrokes from anywhere on Earth, this could result in a catastrophic disruption of the system. It has been observed that cyberattacks on public utilities and energy service providers have been primarily focused on reconnaissance rather than data theft.
Though modern techniques provide significant benefits over traditional methods, cyber threats are still rising. In addition, the use of remotely accessible functions is increasing as more and more people demand IoT integration into utilities. This will also increase the number of cyber threats. Thus, the security concerns regarding energy data are expected to adversely affect the management market during the forecast period.
The market growth analysis market report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market growth and forecasting report also includes key purchase criteria, and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
ABB Ltd. - The company offers energy trading and risk management software such as ABB Ability Energy Manager and ABB Ability Trading.
Accenture Plc - The company offers energy trading and risk management software such as Accenture Energy & Utilities and Accenture Risk & Compliance.
Amphora Inc. - The company offers energy trading and risk management software such as Amphora Trader and Amphora Risk.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD million " for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.
Electricity Trading Market Analysis Europe, APAC, North America, South America, Middle East and Africa - US, China, Japan, Germany, UK - Size and Forecast
Trade Management Software Market Analysis North America, Europe, APAC, South America, Middle East and Africa - US, China, Germany, Canada, UK - Size and Forecast
Algorithmic Trading Market Analysis North America, APAC, Europe, South America, Middle East and Africa - US, China, UK, Japan, Germany - Size and Forecast
Energy Trading and Risk Management (ETRM) refers to the use of software solutions to manage commercial decision making in energy markets. These markets involve the trading of various commodities such as crude oil, refined products, natural gas, NGLs, and electric power. ETRM systems are essential for organizations involved in energy sectors, including process-oriented businesses and sell-side firms, to effectively manage their trading activities. ETRM solutions provide price transparency, controlled access, and regulatory compliance for energy commodities. With unpredictable energy prices and evolving regulatory requirements, these systems are increasingly important for managing risk coverage in energy trading.
Moreover, the Energy Trading and Risk Management (ETRM) market refers to the use of software solutions to manage the complexities of energy trading and risk management in process-oriented businesses, particularly in the oil and petrochemical industries. Sell side firms rely on ETRM systems to efficiently record trade activities, manage contracts and accounting functions, and mitigate risks associated with trading in challenging industrial and regulatory environments. ETRM solution providers offer innovative solutions that cater to the company's commercial needs, enabling them to manage trading and collateral management platforms effectively. These solutions provide a wide range of applications, including market data management, risk analysis, trade capture, and accounting.
Furthermore, ETRM software solutions play a crucial role in managing the risks and complexities of energy trading. They help firms to manage their exposure to commodity price volatility, operational risks, and credit risks. With the increasing complexity of energy markets, the demand for advanced ETRM solutions is on the rise. In the oil and petrochemical industries, where trade activities are a significant part of the business, ETRM systems are essential for managing risk and ensuring regulatory compliance. The use of these systems enables firms to make informed decisions, optimize their operations, and improve their bottom line. Overall, ETRM solutions are an essential tool for managing the risks and complexities of energy trading in process-oriented businesses. With the help of these solutions, sell side firms can efficiently manage their trading activities, mitigate risks, and meet regulatory requirements in challenging industrial and regulatory environments.
Similarly, the market caters to the needs of various energy sectors, including oil and products and power. The market revenue is segmented by type, with service and other being the major segments. The service segment includes front-office functions such as trade capture, risk management, and reporting. Manual recording is being replaced by innovative ETRM solutions that automate various trading processes. These solutions help organizations effectively manage their hedging portfolio and make informed commercial decisions on the trade floor. Electricity and refined petrochemical products are major commodities traded in the worldwide energy trading market. ETRM solutions are key drivers for efficient and effective energy trading operations.
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Market Scope |
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Report Coverage |
Details |
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Page number |
161 |
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Base year |
2023 |
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Historic period |
2018 - 2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 4.81% |
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Market growth 2024-2028 |
USD 436 million |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
4.28 |
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Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
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Performing market contribution |
APAC at 32% |
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Key countries |
US, China, UK, Germany, and Japan |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
ABB Ltd., Accenture Plc, Amphora Inc., Brady Technologies, CommodityPro, EKA Software Solutions, Enuit LLC, Enverus Inc., Fendahl International, Fidelity National Information Services Inc., IGNITE CTRM LLC, ION Group, nGenue LLC, Open Access Technology International Inc., Publicis Sapient, SAP SE, The MathWorks Inc., and TMX Group Ltd. |
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Market dynamics |
Parent market analysis, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market growth and Forecasting, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for market forecast period |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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