A comprehensive energy trade and risk management software developed by APLUS Enerji which incorporates modules such as probabilistic price forecast, portfolio optimization models, transaction lifecycle management, reporting and quotation preparation for end users. RIX | ETRM has 5 sub-modules:
RIX | ESTIM: The module which is using the inputs from the fundamental electricity price forecasting software and generating “Probabilistic Price Forward Curve” by running Monte Carlo simulator at least 400 times.
RIX | OPTIM: An integer linear optimization tool optimizing Forward – Future – Options transactions in order to determine the optimum position according risk and return expectations of users via statistical price distribution estimated by RIX | ESTIM.
RIX | TRADE: The module in which Transaction Lifecycle Management operations are being done.
RIX | onTRACK: A reporting tool which works on trader and company based risk and profitability (reports), calculates and manages the counterparty risks.
RIX | PERFORMANCE: The module in which ‘Quotation Management’ for end-users, “Customer based Profitability Analysis” and “Credibility Management” are being done.
RIX | ESTIM provides users to enter the scenarios for deviation rates from the expected values of important parameters that can affect the spot electricity price. Therefore, the users execute Monte Carlo simulations with RIX l ESTIM tool as many times as it satisfies a consistent statistical distribution and finally delivers the “Probabilistic Price Forward Curve”.
RIX | ESTIM starts working after integrates with fundamental electricity price forecast software like AVIEW | MARKETSIM in order for users to enter below listed parameters for normal, uniform and gradual distribution groups:
- Inputs categorized as normally distributed
-Available Thermal Power
-Reservoir Hydro Generation
-Run of River Hydro Generation
- Inputs categorized as uniformly distributed
-Commissioning dates of new power plant investments
- Inputs with gradual uniform distribution
-Escalation in natural gas price
-Escalation in the tariff
-Natural gas supply crisis
Among above inputs, scenarios of possible multicorrelations which could result in covariances can be shown and the ratio of how much the related parameter is responsive towards the other parameter could be estimated.
After the Monte Carlo Simulation is completed, PFC is calculated and it is shown as a probability distribution function (PDF) or as a cumulative distribution function (CDF). The Merit Order where the supply, demand and price are intercepted for each individual power plant is also indicated. The users can run Monte Carlo simulations between 400 and 1000 times.
RIX | OPTIM is a portfolio optimization tool which enables the companies to increase their competitiveness in energy trading activities, to limit the risks that they are exposed and thus maximize the profits of their portfolio. This analytic tool helps traders in order to minimize the uncertainties stemmed from market risks and Excel based manual calculations while automizing the entire process. RIX | OPTIM has two different functions: portfolio position management and procurement management.
Portfolio position management function considers the available generation assets and available bilateral agreements of the company and then calculates the net position (short or long) which has to be hedged. During the estimation of net position, available and current customers are taken into account separately and for potential customers the parameters like churn rate is calculated. Therefore both position netting and risk calculations are included in this function.
Procurement management function works integrated with RIX | Estim which constitutes the probabilistic price forward curve. After probabilistic price forward curve has been transferred to RIX l OPTIM, market float rate (spot market open position ratio) is estimated in different levels. Then, Forward, Futures and Option products are considered and matched with these market float rates in order to optimize the portfolio. Once the market float rate is decreased the risk that is exposed by the company reduces but the electricity procurement costs increase since the procurement strategy is primarily based on OTC. This leads to a decrease in potential profit of energy trading company. On the other hand, the potential profit grows once the market float rate is decreased but this triggers the potential risk to increase as well. Therefore, parameters such as risk, cost, cash flow and profitability are calculated as proportions in 5% intervals in order to analyse increasing and decreasing risk conditions. These parameters are supported with VaR, cVaR, PaR and other indicators in order to provide a solid view for traders.
Last but not least, RIX l OPTIM offers the opportunity for the creation of new products which provides an important advantage to the energy trading companies that are operating in illiquid markets.
RIX | TRADE is a Transaction Lifecycle Management system and composed of below sub- modules:
- Deal Capture: The module that captures and lists the contracts from OTC and Exchanges into the system. Currently, OTC products (Tradition, GFI, Volt, Balkaner, etc.) or bilateral contract potentials can be entered by users as procurement alternatives. Once EPIAS and BIST become active in Turkish Electricity Market, the integrations and configurations will be made with these platforms.
- Order Routing: The module in which intra-company and counterparty confirmation processes for selected products is automatized.
- Contract Management: The module in which contracts are signed (confirmed) for captured products and any relevant actions such as collateral, invoicing, payment date are being listed as an information.
- Spot Market Operations: The module in which the bids for Day-Ahead, Intra-Day, Balancing and Ancillary Services’ markets are being prepared and being sent to Market Operator automatically. In return to that the module transfers the information such as settlement and collateral from the Market Operator inside the system.
- Collateral Management: The module in which collateral liabilities concerning OTC or Exchanges are kept and required information exchange is done by integrating with corporate finance systems.
- Settlement and Billing Module: The module in which settlements regarding trade contracts or spot operations are estimated, notifications are being checked and sent, and invoice amounts after the settlement are calculated and sent to relevant systems for billing.
RIX | onTRACK is a comprehensive and performant reporting tool which provides trade follow-up, portfolio structure analysis, counterparty credibility analysis functionalities and complex regulatory report formats.
Under trade follow-up function, reports which are categorized as “Before Day” and “End of Day” can be prepared in daily, weekly, monthly, quarterly, half yearly or annually periods. Moreover, reports can be trader based or cover the total traded volumes by the entire trading team. Below standard reports are generated for short, medium and long terms:
- Day-Ahead and End of Day (EOD) reports
- Mark-to-Market or real;
-Profitability reports for the entire portfolio and customer group segment
-Risk reports for the entire portfolio and customer group segment
-Trader based profitability and risk reports
- Notifications concerning due date of current contracts and exceeded limits
Concerning the counter party risk, reporting the parameters like account payables and receivables, financial and volumetric trade amounts
Since RIX | onTRACK is designed as a user-friendly and a flexible module, new reports could be generated according to needs of companies.
Under portfolio structure analysis function, the amount of risk exposed to trading company is determined in the case that the counterparty defaults or underperforms. This function which is also named as counterparty credibility management works according to several criteria which are set by the trading company. Following transactions are done under this module:
- The financial and non-financial scores of the counterparties are calculated in the system.
- The score received from an external credit rating agency is matched with the score already exists in the system.
- The credibility category which is corresponding to counterparty’s credibility score is determined and counterparty is assigned to that credibility category.
This module includes functions such as quotation preparation for end–user sales processes, customer credibility management and customer and segment based profitability analysis. The quotations for each customers are prepared under this function by considering their consumption profiles, imbalance costs, taxes, network usage costs or any other relevant costs. The system provides the flexibility to define various cost items for each contract type. The system also supports the calculation of below standard contracts:
- Standardized fixed price contracts (Tariff based)
- PMUM/EPIAŞ (spot) indexed contracts
- Products with tranches
- Full supply contracts (incl. energy balancing) and contracts with fixed volumes and/ or take-or-pay contracts.
Beside quotation preparation functionality, customer credibility function which works according to several criteria such as on-time payment and imbalance costs of each customer is operated under RIX | PERFORMANCE. Following transactions are done under this module:
- The financial and non-financial scores of the customers are calculated in the system.
- The score which is received from an external credit rating agency is matched with the score already exits in the system.
- The credibility category which is corresponding to customer’s credibility score is determined and customer is assigned to that credibility category.
Under the customer and segmentation analysis process following tasks are carried out:
- The analysis of requirements and behavior for current and potential customers
- Assigning right segments for each customer
- Measuring segment performances and determination of right strategies
The churn-rate analysis, the income, cost and profitability analysis for each segment, portfolio and customers are being done under this function which helps for the identification of marketing strategy for the entire portfolio.