Modernizing Utility Supply, Trading, and Risk Management for the Energy Transition
Breaking Down Silos to Enable Grid Reliability and Renewables Integration
The energy transition is reshaping the utility landscape at an unprecedented pace. As utilities accelerate the shift toward renewables, distributed energy resources, and electrification, the complexity and volatility of energy markets have surged. This new reality demands a fundamental transformation of supply, trading, and risk management systems—moving beyond legacy Commodity/Energy Trading and Risk Management (C/ETRM) platforms to embrace a data-centric, AI-enabled digital ecosystem.
The Challenge: Legacy Systems in a Volatile, Decarbonizing Market
Traditional C/ETRM systems were designed for a world of single commodities and stable, centralized generation. Today, utilities must manage portfolios that span wind, solar, batteries, gas, and more—across multiple geographies and regulatory regimes. The rise of renewables introduces new challenges: intermittent supply, rapid price swings, and the need for real-time balancing. Meanwhile, extreme weather events and evolving market rules add further layers of risk and uncertainty.
Legacy C/ETRM architectures are ill-suited to this environment. They are often:
- Siloed: Data is fragmented across commodity, region, and business unit, limiting visibility and collaboration.
- Manual: Extensive human intervention is required for data aggregation, reconciliation, and reporting, increasing the risk of error and slowing response times.
- Inflexible: Over-customized, on-premise systems are costly to maintain, difficult to integrate, and slow to adapt to new market requirements.
- Limited in Analytics: Most lack the advanced analytics and AI capabilities needed for modern forecasting, optimization, and risk management.
The result? Utilities struggle to respond with agility, optimize portfolios, and manage risk in real time—precisely when these capabilities are most critical.
The Solution: A Data-Centric Digital Ecosystem
To thrive in the energy transition, utilities must break down data silos and create a unified, connected data landscape across supply, trading, and risk. This transformation enables:
- Agility: Real-time access to data and insights across the value chain, supporting rapid decision-making in volatile markets.
- Collaboration: Seamless data sharing across teams and functions, accelerating innovation and operational alignment.
- Visibility: End-to-end transparency across assets, markets, and operations, enabling portfolio optimization and sustainability tracking.
- Efficiency: Automation of business processes, reducing manual effort and operational risk.
- Innovation: Unlocking next-generation decision support and portfolio optimization through AI and advanced analytics.
Key Architectural Components
A modern digital ecosystem for supply, trading, and risk management typically includes:
- Service and Integration Layer: Leveraging AI and low-code tools to create new business services and digital user channels.
- Unified Commercial Analytics Platform: Bringing together data and analytics capabilities across the organization to enable high-value, AI-enabled workflows.
- Common Commercial Infrastructure: Core systems to execute and record business-critical processes, integrated with external market data, exchanges, and regulatory platforms.
The Role of AI and Advanced Analytics
Artificial intelligence and advanced analytics are at the heart of the next-generation utility. By moving to a data-centric architecture, utilities can:
- Forecast Demand and Supply: Use AI to combine weather, asset, and market data for more accurate short-term and long-term forecasts, critical for balancing renewables and grid reliability.
- Optimize Portfolios: Simulate market scenarios, identify arbitrage opportunities, and recommend optimal hedge positions in real time.
- Automate Risk Management: Continuously monitor credit, market, and operational risks, flagging policy violations and enabling automated hedging and compliance.
- Enhance Back-Office Operations: Automate reconciliation, invoice matching, and regulatory reporting, freeing up resources for higher-value analysis.
Example Use Cases
- Front Office: AI-driven demand forecasting, market simulation, price forecasting, and schedule generation.
- Middle Office: Automated credit scoring, contract review, and risk policy monitoring.
- Back Office: Automated reconciliation, financial statement generation, and regulatory compliance.
Case Studies: Real-World Impact
1. Global Renewable Power Leader: Standardizing Trading and Risk for Renewables
A multinational utility with a rapidly growing wind and solar portfolio faced fragmented commercial optimization across regions and legacy systems. By partnering with Publicis Sapient, the company:
- Integrated commercial activities into a global supply and trading platform
- Standardized systems and processes, reducing customizations and complexity
- Implemented a unified ETRM solution, enabling real-time risk management and automated settlement
- Result: Streamlined operations, improved risk controls, and a significant increase in trading P&L through optimized congestion and battery trading models
2. North American Power & Gas Company: Consolidating for Growth and Efficiency
A fully integrated power and gas business, active in both wholesale and retail, needed to modernize after a period of acquisitions. Publicis Sapient:
- Designed and implemented a consolidated ETRM platform, integrating exchanges, pricing, and ERP systems
- Automated transaction lifecycles, replacing manual spreadsheets
- Enhanced data migration and quality, enabling consistent reporting and analytics
- Result: Improved operational efficiency, enhanced forecasting accuracy, reduced margin leakage, and better customer analytics
The Transformation Journey: From Tactical to Strategic
Modernizing supply, trading, and risk management is a journey, not a one-time project. Utilities should:
- Automate and Decouple: Start by automating manual tasks and decoupling legacy systems, migrating data and compute to the cloud.
- Enable AI and Real-Time Insights: Build unified analytics platforms and integrate AI for forecasting, scenario analysis, and decision support.
- Innovate and Monetize: Develop new business models, such as carbon marketplaces and new energy trading, leveraging the digital ecosystem for continuous innovation.
Why Publicis Sapient?
Publicis Sapient partners with leading utilities worldwide to drive digital transformation across supply, trading, and risk. Our approach combines deep industry expertise, advanced technology, and agile delivery to help clients unlock value, improve resilience, and lead in the energy transition.
Ready to modernize your supply, trading, and risk management for the future of energy? Connect with us to start your transformation journey.