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The energy trading and risk management market size is estimated to grow by USD 399 million at a CAGR (Compound Annual Growth Rate) of 4.6% between 2022 and 2027. The growth of the market depends on several factors, including the rising demand for smart grids globally, increasing focus on renewable energy, and improved operational efficiency. Energy trading and risk management involve developing and adapting models to manage energy assets and build commodity trading strategies.
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This energy trading and risk management market report extensively covers market segmentation by application (power, natural gas, oil and products, and others), type (software and service), and geography (North America, APAC, Europe, South America, and the Middle East and Africa).
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 556.92 million in 2017 and continue to grow by 2021. 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 global energy trading and risk management (ETRM) 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 faces challenges such as market volatility, global market variances, and data security issues. Market consolidation drives the demand for integrated systems, facilitating commercial decision-making and market execution. ETRM systems manage trading activities involving commodities like crude oil, refined products, and electric power. These systems ensure price transparency, market monitoring, and controlled access to trade floors. They cover risks associated with trading in energy, and optimizing profit margins for sell-side firms. Opposition to change and evolving regulatory requirements pose additional challenges, necessitating innovative solutions from ETRM solution providers tailored to the needs of process-oriented businesses.
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. 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 energy trading and risk management 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 witnesses a dynamic landscape characterized by factors such as market volatility, global market variances, and opposition to change. Energy sectors, including commodities like crude oil, refined products, and electric power, face challenges related to data security issues and evolving regulatory requirements. ETRM systems play a pivotal role in managing trading activities and mitigating risks associated with market movements and unpredictable energy prices. Market consolidation drives the demand for integrated systems, facilitating commercial decision-making and market execution. Energy trading and risk management solution providers offer innovative solutions tailored to address the complex supply networks and ensure price transparency. Enhanced capabilities in recording trade and equity data, along with efficient risk coverage, are crucial for optimizing profit margins amidst the challenges posed by manual recording and evolving market dynamics.
The market forecasting report covers market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Energy Trading And Risk Management Market Scope |
|
Report Coverage |
Details |
Page number |
154 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 4.6% |
Market growth 2023-2027 |
USD 399 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
4.0 |
Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 32% |
Key countries |
US, China, Japan, UK, and Germany |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
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 Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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