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Tech-driven Renewable Portfolio Management

todayApril 11, 2024 536 1

Background

PANEL DISCUSSION

  • What are the challenges of an increasingly large and complex portfolio of assets?
  • Role of technology developments in creating new opportunities.
  • Performance optimization: Which digital tools and platforms are making the biggest impact?
  • How can asset owners scale up teams to meet new challenges?
  • Flexibility and hedging: Working through a combination of battery storage systems and renewable energy sources.

SPEAKERS:

Brock Mosovsky, Co-Founder and VP, Analytics at cQuant.io
Irina Reitgruber, Consultant, Affiliate Analyst at ComTech Advisory
Marie Pégoud-Féjoz, Senior Producer, Content Lead at Commodities People
Phil Wiltshire, Commercial Associate at Forsa Energy

Transcript

MARIE PEGOUD FEJOZ, CONTENT LEAD, COMMODITIES PEOPLE
Hello everyone and welcome to the second session of renewables and storage optimization online. My name is Marie, I'm with commodities people. I look after our energy trading and commodity trading events in Europe and it is my pleasure to be welcoming on stage a great panel of speakers to discuss tech driven renewable portfolio management. Irina feels broke. Welcome. Could you please introduce yourselves to our audience? Irina, do you want to go first?

IRINA REITGRUBER, CONSULTANT, AFFILIATE ANALYST AT COMTECH ADVISORY
Yes. Thank you Marie. My name is Irina Reitgruber. I am working with Comtech Advisory and was working with a lot of software vendors previously and I have more than 20 years experience working in energy business. Comtech Advisory is a leading analyst organization analyzing the market for software tools serving energy businesses that starts from ETRM systems and goes to technology companies and companies supporting energy transition.

MARIE PEGOUD FEJOZ, CONTENT LEAD, COMMODITIES PEOPLE
Okay, great, thanks Irina and Phil, do you want to go next?

PHIL WILTSHIRE, COMMERCIAL ASSOCIATE AT FORSA ENERGY
Hi there, I'm Phil Wiltshire, I'm the commercial director at Forca Energy and force energy is an owner, developer and operator of transitory technology. In the past we've built renewable portfolios, we currently have flexible generation and we're also in the sort of new energy space as well. So yeah, that's me and I look after the commercial team. So it's all things route to market and trying to make the most out of those markets with the assets that we have.

MARIE PEGOUD FEJOZ, CONTENT LEAD, COMMODITIES PEOPLE
Brilliant. Thanks Phil. And finally, Brock.

BROCK MOSOVSKY, CO-FOUNDER AND VP, ANALYTICS AT CQUANT.IO
Yeah, hi, my name is Brock Masoski, I'm the vp of analytics and co-founder of Ceqant IO, which is a software as a service cloud native energy analytics platform. We work with a variety of customers across the energy landscape, renewable developers, independent power producers with traditional generation or renewable energy trading shops, consultancies, and we provide a broad suite of tools including portfolio optimization and management, and a lot of the fun things we're going to talk about on today's call. So thanks so much for having me.

MARIE PEGOUD FEJOZ, CONTENT LEAD, COMMODITIES PEOPLE
Indeed. Thanks Brock for being here. So yes, we are gathered to discuss the role of technology in managing renewable portfolios. Renewables are obviously at the center of the transition to less carbon intensive and more sustainable energy systems. And generation capacity has been growing rapidly for a few years, but it's not without challenges when it comes to portfolio management. So there's lots to discuss on this. We have some questions for our panel, but please, I'd also like you to know that the panel welcomes questions from the audience. So please do post yours in the q and a box and we'll take some time at the end of the session to answer as many as we can. So let's just dive in. My first question is actually for the whole panel. And we start with Irena's point of view. The question is this one, what specific challenges arise when managing an increasingly large and complex portfolio of renewable assets? So how do these challenges evolve as the portfolio expands in size and diversity? Irina, do you want to share your thoughts on that?

IRINA REITGRUBER, CONSULTANT, AFFILIATE ANALYST AT COMTECH ADVISORY
Yeah. So if you look at their renewable portfolios at the moment, it's really quite different from what we heard from classical energy companies. So the renewable sites are located in different places. There is a need to forecast the production of those sites. There is a lot of data coming together from those portfolios. Additionally, we see that consumption becomes prosumer. So instead of consumers, we see prosumers on the market. So they produce and consume, they provide certain flexibility. So the first thing which comes into my mind here is that there is a huge amount of data companies need to work with. It's a metadata data needed for forecasting of renewable production. That's weather data, it's satellite data. And all this data needs to be processed, needs to be cleaned, needs to be valued, and that's already a challenge. And also all the market goes more in the direction of real time because all the changes happen very quickly. So you need a very high performance processing of this data. And that of course becomes a challenge for many companies. But it's an opportunity at the same time because there are a lot of techniques which you can apply for this, and we will talk about it in this webinar. So you can be very successful if you apply modern technology to deal with such portfolios.

MARIE PEGOUD FEJOZ, CONTENT LEAD, COMMODITIES PEOPLE
Thanks Irina, Brock, I believe you wanted to add on that as well.

BROCK MOSOVSKY, CO-FOUNDER AND VP, ANALYTICS AT CQUANT.IO
Yeah, a lot of the details that arena mentioned are super key for the portfolios, one of the biggest being intermittency. And the fact that renewable energy is not dispatchable. It represents a huge change from the traditional thermal generation portfolio. So we have to accept the energy when it's being generated. We have intermittency throughout the day. We have some months with increased production, some months where we see decreased production if we're looking at wind and solar, and we have to match all of that to demand, whether we're a regulated utility that's directly serving customers or we're an independent power producer putting the energy on the grid. And so you start to see this very strong statistical analysis perspective come into the portfolio like it never has with traditional generation, where you had essentially a gas pedal that you could step on, right? And what we see is negative covariance between generation, renewable generation and market prices. And that becomes really a challenging thing to manage within broader portfolios. So I think the idea of managing these portfolios has shifted quite a bit because of the nature of that generation. And Irina also mentioned there's a lot more geographical diversity within these portfolios. There's different asset classes, there's different locations, each of which has different weather patterns and different pricing structures. And then you also have different attributes that you're managing as well. Things not only just the financial position and the megawatt hour position, but also things like resource adequacy capacity, renewable energy certificates, carbon. Right. All of these components are kind of blending together. So I think there's a lot of challenges indeed.

MARIE PEGOUD FEJOZ, CONTENT LEAD, COMMODITIES PEOPLE
Phil, your views on that?

PHIL WILTSHIRE, COMMERCIAL ASSOCIATE AT FORSA ENERGY
I don't have to be honest, I don't have too much to add to what either Irina or Brock have said, but what I will say is in some sort of corroboration of it, really. We've seen, I mean, we've gone from a market which can be somewhat managed through fairly predictable tools and through spreadsheets and through fairly ad hoc methods, and we've seen that evolve into much faster processes, much larger data sets, and much more complicated data sets as well. Because what we've seen with the renewable transition in many markets is also a transition in how the markets are designed. And that just adds a sort of complexity to it, because we are moving from energy as a commodity with a unit price, to availability of assets being much more in focus for some, particularly for batteries. And that's to play on the intermittency that you were both speaking of. So we've seen that in our day to day activity. And what I would say is that there is a definite shift towards centralized technology. So cloud based platforms that can be deployed repeatedly across a portfolio rather than bespoke. I have this tool for this asset and then this separate tool for that asset. There's a lot more. I think the technical term is generic coding of these kinds of data analytic tools. I don't know if that corresponds to your view as well, Brock.

BROCK MOSOVSKY, CO-FOUNDER AND VP, ANALYTICS AT CQUANT.IO
Yeah, just to respond briefly to that, I think the idea of centralization of the analytical tools is also linked to visibility across the portfolio. And the idea that you want to have a holistic view of everything within the portfolio becomes much more important when you're looking at all the statistical relationships about how this wind asset and this solar asset and this particular customer demand and these attribute targets all fit together, because all of that needs to be managed simultaneously. The days of, as you mentioned, Phil, having a spreadsheet for this assets operation and a spreadsheet for the trading activity over here and having this kind of disconnected multiple views, multiple sources of truth in terms of what's going on in the portfolio. I think those days are starting to fade into the background and we're ushering in a new era where that holistic view of the portfolio is absolutely critical to maintain profitability and reduce risk.

MARIE PEGOUD FEJOZ, CONTENT LEAD, COMMODITIES PEOPLE
Thanks. Yeah, so we've covered the challenges, but Irina touched on a bit of the opportunities there, as well as building on that. In what ways have recent technology developments opened up new opportunities in renewable portfolio management? Irina, since you touched on that, do you want to take a first stab at it?

IRINA REITGRUBER, CONSULTANT, AFFILIATE ANALYST AT COMTECH ADVISORY
Yes, sure. Look, first of all, the first technical advancement we see is very widespread use of the cloud with opportunities and all cloud features like elasticity, scalability. It's increasingly important because the amount of calculation you need to have is huge. But of course, where you see big data, you can apply machine learning, you can apply artificial intelligence tools, and that is usually done, for example, for forecasting, we see it everywhere, but also for flexibility optimization. So if you look at a large renewable portfolio, as Brock already mentioned here, you have unpredictable, in a sense reduction, and you need to compensate for those fluctuations in a very short term by using flexibility and where the flexibility comes from. So you can see flexibility coming out of batteries. And this is also a very important trend nowadays. But also people are talking about demand response flexibility. So the demand side of flexibility can maybe reduce consumption or even increase consumption in some points in time where it's needed, and it can be managed by pricing tools, for example. So what is important here is that this kind of flexibility is somehow aggregated and used in the market with market mechanisms to compensate for those fluctuations. So optimization in the short term, real time optimization is also the tool which helps to optimize these flexibilities in a very short time. And maybe last but not least there are already AI tools which are supporting trading directly. So then you can learn. So machine learning allows you to learn the past data, the trading decisions done in the past, and the market situation which was in the past. And based on that, artificial intelligence can also provide some suggestions for trading. And this is already used in financial trading, maybe not yet in energy, but I think it will be coming in energy trading as well. So the responsibility for trade stays of course with the trader and not with the machine, but to have good suggestions and to have possibility, for example, to backtest your strategy based on realistic market scenarios. That's a very important tool for portfolio managers, again with the application of such tools as AI.

MARIE PEGOUD FEJOZ, CONTENT LEAD, COMMODITIES PEOPLE
Right, thanks Irina. And I believe you wanted to contribute there as well.

BROCK MOSOVSKY, CO-FOUNDER AND VP, ANALYTICS AT CQUANT.IO
Yeah, I'll kind of play off. One of the things that Irina said that I think is one of the biggest opportunities is optimization. And there's optimization to be done within modern energy portfolios at various different levels with various different tools. There's optimization of day ahead and real time bids and offers into the market. There's optimization of active management of the portfolio where you're going out to the market and procuring financial or physical hedges for an existing portfolio. And there's optimization of actually how you construct the portfolio itself. Being, I think, very aware of when I add a solar asset to the portfolio, what is that doing to my net megawatt hour position? What is that doing to my cash flows? What is that doing to my risk? How is it impacting my renewable energy certificate position and carbon, all the different components that we're trying to simultaneously manage? I think the optimization component is really an opportunity. And there are tools, I'm somewhat biased because this is something that cquant does quite a bit of in our day to day, and we help our clients with this. But there are tools in the market that can help participants optimize these portfolios. And then from a technology perspective, I think batteries are undeniably a huge force right now. They're not a cure all. I'm not going to say that batteries are going to solve all of our problems. There's still challenges with batteries, but they do add flexibility. They do allow you to at least start to smooth the edges of this non dispatchable renewable energy and to shape it a little bit more than it would be otherwise. And that's a super important technology. Costs are continuing to decline for batteries. We're seeing increased adoption on the grid. And so I think that's important, when we're talking about technology in renewable energy portfolio management, batteries are a key player.

MARIE PEGOUD FEJOZ, CONTENT LEAD, COMMODITIES PEOPLE
Okay, do you have anything to add on this, Phil, before we move to the next question?

PHIL WILTSHIRE, COMMERCIAL ASSOCIATE AT FORSA ENERGY
Yeah, on the optimization front, I think your point, Irina, about AI coming into energy trading more so than it has today, I would agree with that. It's largely because I think we're also seeing a democratization or a decentralization of energy as well. So a lot more people are investing in or looking at electric vehicles, for example, and those by definition are decentralized energy assets, but they're done so in behaviors that are not necessarily as predictable as the actions of traders have been to date. And so you see those behaviors going into the market. It might be that AI, which is generally better at identifying larger, large sample trends rather than at predicting small samples. What would happen if I parked my car here instead of there? Well, it might get at 50% right, but if you talk about large populations, it fares a bit better. On the more holistic view is what would somebody do with a renewable portfolio and what opportunities are there. And I'm a bit reluctant to call it an opportunity because it's a bit like, I think it's, I think it's a bit like that renaissance marble and the statue in the marble type effect. The opportunity is there, but we don't see it until it's really defined. And so I think the more statistical approaches to projection of cash flow and managing a portfolio, it does two things. It says, as a developer, where do I go in terms of portfolio development? Are these assets suitable for the current position? I have. The other thing is it opens up possibilities for people that have assets that need to justify their existence a little bit more than the renewable sector has seen. You see that with batteries now as well, in that the capex took a bit of a wobble over recent years in a way that renewables didn't. So renewables, the falling capex has been expected. So people are saying, well, what is the worth of a battery in monetary terms, in a much more rigorous way than renewables? And so I think the tools to understand what a battery does for a portfolio, very data intensive. And so, like I said, the opportunities there, but it only appears when it's defined well. So the tools allow us to do that.

MARIE PEGOUD FEJOZ, CONTENT LEAD, COMMODITIES PEOPLE
Thanks for that. So our next question is more around flexibility. And we actually have two polls that we'd like to have your views on. When I say your, I mean the audience's view on. So let me just put up the polls. So as I said, they are, oh, it seems like they don't have access to the polls anymore. How weird is that?

BROCK MOSOVSKY, CO-FOUNDER AND VP, ANALYTICS AT CQUANT.IO
Let me go ahead and give you back control here.

MARIE PEGOUD FEJOZ, CONTENT LEAD, COMMODITIES PEOPLE
Thank you very much. I'd love to have control. Okay, well, you know what, while this is coming back to me, I'll just throw the question to our panelists then, in that case, and we'll throw the pause in later on. So what role do battery storage systems play in enhancing flexibility within renewable portfolio management? And I guess the second part of the question could be, oh, and there we go. That's not the one that we wanted. Sorry, could you remove that one? We'll go, we'll go through it later, don't worry. So, yeah, I was saying the second part of the question could be how can asset owners effectively combine battery storage systems with renewable energy sources to optimize performance but also hedge against risks? Basically, Phil, do you want to share your thoughts on that?

PHIL WILTSHIRE, COMMERCIAL ASSOCIATE AT FORSA ENERGY
Your phrasing of that was quite interesting because it kind of shows my view a little bit because there was a lot of enthusiasm a while ago about colocation of batteries. And so there were lots of people who would say, I'll put up a solar farm and put batteries on, which intuitively makes a lot of sense. But the savings of doing that from a technical standpoint depend on the market that you're going into. So if you've got a very interconnected market, it doesn't really matter where your battery is, and it doesn't really matter where your solar farm is within the reason of, you know, placing a solar farm. Well, what's more interesting is whether the cash flows that you get or the opportunities that you get between those two asset classes arise in a way that you can make the most out of your portfolio. There's a big disparity at the moment between how assets are financed or different asset classes are financed. The level of risk that you need to take in order to invest in one instead of the other. And how does a combination of those asset classes make that a more or an easier project to close? And that comes with the hedging. That is kind of the second part of your question, almost. So, yeah, I would say batteries, their place in a renewable portfolio is what it does for the portfolio in that respect, not necessarily what a private wire or colocation would do.

MARIE PEGOUD FEJOZ, CONTENT LEAD, COMMODITIES PEOPLE
All right, Brock, do you want to add on to that?

BROCK MOSOVSKY, CO-FOUNDER AND VP, ANALYTICS AT CQUANT.IO
Yeah, that's a great segue into some of my thoughts. I think the last thing, Phil, that you mentioned is the key. How are you going to integrate that battery? What is your strategy for integrating it? How is the battery going to operate? And that will really dictate the value, because batteries have a lot of flexibility into how they can derive value from the various market structures available. A battery can shift energy. A battery can sell ancillary services. So frequency regulation or spinning reserves. A battery can provide outage resiliency that tends to be more in behind the meter applications, but it can also kind of COVID outages in the case of thermal generation assets, we've seen batteries be combined with thermal generation to either kind of smooth out some of the ramping behavior or to provide short term outage resiliency. So there's all kinds of different values that the battery can contribute to a renewable energy portfolio. And really the strategy around operating that battery is the key to how much value you can extract from it. And it also goes back to the co-located aspect that Phil mentioned. Again, I think that a lot of batteries, a lot of renewable developers are thinking, oh, I'll just put a battery down right next to the facility and I'll use that as kind of a physical hedge. And that does work to some extent. But it turns out that if you look at the valuation of a co sided battery that is operating off a strategy to shift energy and reduce periods of time when energy prices are very low, versus just a standalone battery that can co optimize to energy and ancillary services and other products, that standalone battery has much more value in today's markets, at least within the US, the way those markets are structured. And so again, to Phil's point, if the grid is extremely interconnected and you can move power around where you need it, you have a different value proposition to a battery than if you have a very constrained grid. Like if you look at the western part of Texas, if you look at California, where you have a lot of oversupply, you look at certain areas of Europe where you really need that battery to operate from an energy perspective versus do I need the battery to provide ancillary services. So I think just acknowledging how that battery is going to fit into not only your own portfolio, but the broader market dynamic in general is key to being able to derive an accurate estimate of value.

MARIE PEGOUD FEJOZ, CONTENT LEAD, COMMODITIES PEOPLE
Okay, thanks. So I'd like now to launch the two questions that we had around flexibility. And we'll, you know, give people a few seconds to vote. So do you think that flexibility is valued well in the market? Yes. No, I'm sure, yeah, we'll just give them a few more seconds and I will then share the results straight away. Okay. It's true. Well, you'll see when I share the results, but it's really quite widespread. So let me end the poll and share results with you now. So any of you want to comment on these?

IRINA REITGRUBER, CONSULTANT, AFFILIATE ANALYST AT COMTECH ADVISORY
It's not a very easy question, I think, because actually there is a study which is done for Germany, but maybe it's similar to different other countries. The study was around demand side flexibility, not just batteries, and they derived that the demand side flexibility can count to 10% of total German consumption. Whether that's high or low, it's difficult to say. 10% is definitely not a very low number. And this is not including standalone batteries or production sites with batteries collocated. This is just demand side flexibility. So I think that in the future market, that will be very valuable. At the current market, maybe it's, you know, as the poll shows, a bit unclear.

MARIE PEGOUD FEJOZ, CONTENT LEAD, COMMODITIES PEOPLE
Okay, well, we actually have a question around demand side flexibility. So let's launch that one now for our audience to vote. So do you think demand side flexibility can really fulfill the expectations and. Okay, by the look of it, things are slightly more clear for people. Let me. Well, actually not. Sorry, people just made me now. So, yeah, let me just share the results with you now. And perhaps either Phil or Brock can comment like it right now. It seems like you.

PHIL WILTSHIRE, COMMERCIAL ASSOCIATE AT FORSA ENERGY
My initial reaction is very, I mean, both of these are about expectations and about whether we're getting values of things right. And we both. It's a very difficult question, which is unusual, because if we struggle with this question, then the answer is no. In terms of value and flexibility correctly, I suppose this one. Do we think the man side flexibility can fulfill expectations? The expectations have moved quite a bit.

IRINA REITGRUBER, CONSULTANT, AFFILIATE ANALYST AT COMTECH ADVISORY
Depends on expectations.

PHIL WILTSHIRE, COMMERCIAL ASSOCIATE AT FORSA ENERGY
Yeah, period, I mean, when I started my career, the manslide response was a very new thing and it was very hip. And then when we actually got into saying, well, we're going to do this, that the next thing, the expectations suddenly reduced quite significantly.

BROCK MOSOVSKY, CO-FOUNDER AND VP, ANALYTICS AT CQUANT.IO
Yeah.

PHIL WILTSHIRE, COMMERCIAL ASSOCIATE AT FORSA ENERGY
What do you think, Brock?

BROCK MOSOVSKY, CO-FOUNDER AND VP, ANALYTICS AT CQUANT.IO
Yeah, I would just say kind of similar to you, Phil, the expectations have certainly shifted, but I feel like they've been kind of high in different ways ever since the introduction of the concept of demand side flexibility. The challenge is in the headwind here is that a lot of demand side flexibility and response requires consumers to modify behavior. And that is always going to be a headwind unless there's a complete mind shift in terms of how we think about consumption of electricity. Our businesses depend on electricity consumption. Our homes and our way of life depends on consuming energy when we want it, not necessarily when we need it, but when we want it. And if something puts that into question or jeopardy, there's a really strong headwind to that kind of behavior modification. Things like coordinated water heating and smart thermostats and all kinds of things that have been touted as being, having the potential to drastically change the shape of electricity demand or provide demand side benefits have, I think, traditionally underperformed. And I don't, I guess I'm maybe a bit of a pessimist when it comes to the demand side of things, but I don't know that I see that changing unless we can figure out ways of completely abstracting away the choice from the consumer in a way where they do not feel the impact. I think that's the number one thing. Right. But the demand side is a really challenging, a really challenging kind of arena for that, I think.

PHIL WILTSHIRE, COMMERCIAL ASSOCIATE AT FORSA ENERGY
Oh, sorry.

IRINA REITGRUBER, CONSULTANT, AFFILIATE ANALYST AT COMTECH ADVISORY
I wanted to say that there are two sides of it. One is industrial and the other is residential. Concerning residential demand side flexibility, I totally agree with you, Brock, but on the industrial side it looks a little bit better. And there are some products which are going to be standardized, like pig shaving products, which the industry can provide. I think here maybe we will see more advances, but in the longer run it may be difficult to predict what will be with the residential part of the flexibility in 10, 20, 30 years.

PHIL WILTSHIRE, COMMERCIAL ASSOCIATE AT FORSA ENERGY

I mean, yeah, I don't think we're going to avoid all of that issue. We had a slight foreshadow of this earlier in the conversation actually where we were talking about AI and the point I was making about AI being good for general behaviors or large sample sizes, that's a symptom of this issue really, because we're not saying, well, we've got this predictable hate behavior. It's economically incentivized, so we know how it should behave. We're saying, well, people will watch television when they want to watch television and they'll put their ironing, they'll put their washing on when they put the washing on. I think it's whether or not that behavior changes and whether or not there's a, there's a commercial way to do that.

BROCK MOSOVSKY, CO-FOUNDER AND VP, ANALYTICS AT CQUANT.IO
Yeah. The incentives really need to acknowledge that even if it seems like a small behavior change, it's that presence of mind. I think that is the big hurdle to get over. So you need to have an economic incentive that gets you over that hurdle, which is challenging and may not make it makes demand response, I think, a lot harder to be economic on the residential side, again with larger industrial loads and curtail those can start to look a little bit more like almost like a short duration storage device. But a long duration is still probably going to be challenging to accept. Right. You tell an industrial plant to shut down for two days, they're going to be upset about that. Right. And that's going to have a pretty significant economic impact. So I think we're still working through it for sure. I think there's potential for it, but ultimately it's not generation, it's reduction in demand. And so I think we're still going to need to find ways to actually add electricity, to add energy to the grid to get over those challenging times with the renewable transition.

MARIE PEGOUD FEJOZ, CONTENT LEAD, COMMODITIES PEOPLE
All right, thanks. So now back to a sort of pure tech. Question that I'd like to throw to all three of you. Which digital tools and platforms have shown the most significant impact on performance optimization in renewable portfolio management? Brock, do you want to start on this one?

BROCK MOSOVSKY, CO-FOUNDER AND VP, ANALYTICS AT CQUANT.IO
Yeah, I'd love to lead us off here. Coming from an analytics vendor in the space, certainly my personal views are aligned with those of the company that I'm representing. But I think the ability to do data analytics has been just a huge benefit because the dispatchability is not there. The performance of the portfolio is tied to the statistical makeup of the portfolio now like it never has been in the past. Right? There's always been some element of this in terms of designing optimal hedges and building portfolios with diversification. But I think it's more important now because even with those batteries, you only have so much that you can shift around, because those batteries are not today's batteries, I should say, are not super energy dense. I think one of the biggest technological advancements has been the visibility into the portfolio and the ability to track and manage and optimize different targets and different attributes within that portfolio. Acknowledging that there is uncertainty in the generation, there's intermittency in the solar and the wind, there's limits on how much I can shift with the battery. And looking at that in a very statistical, very probabilistic way, but also very holistically to understand, to have that visibility into what is the next decision that I need to make in order to set my portfolio up for success. So I think that we're still in the early stages of that. I think we're transforming in terms of the market view of how to manage and grow these portfolios. I think that's going to prove to be one of the biggest shifts in thinking.

MARIE PEGOUD FEJOZ, CONTENT LEAD, COMMODITIES PEOPLE

Okay, thanks. I believe Irene and I wanted to add a brief comment on that as well.

IRINA REITGRUBER, CONSULTANT, AFFILIATE ANALYST AT COMTECH ADVISORY

Well, I think that from the tooling perspective, from technology perspective, which really helps, is quite a new concept, which we see now in all software tools, from data management systems to Ethereum systems, where we see that people develop platforms, very powerful platforms in the cloud with rather limited functionality, but absolute, not customizable general, which very easy to upgrade and very easy to scale, and some fix plugins for certain tools, development tools like Python for example, and rest APIs which allow customers to put on any analytics, any tools, AI's whatever. And that is a similar concept as you have on your smartphone with App Stores, so the customer can select which application to purchase. And that's all very easily linked to the platform. We see that in Ethereum systems, we see that in energy data management systems. I think this approach is very helpful for the future. And companies look into optimizing cloud portfolios. They can plug in whatever analytic tools they want. They can write their own tools, they can resell those applications which they develop. If you are a certified developer, you can always add some specific functionality into that platform. This is a very future oriented concept. Maybe just some add on or that.

MARIE PEGOUD FEJOZ, CONTENT LEAD, COMMODITIES PEOPLE
Okay, brilliant. We still have a couple of questions we wanted to go through before answering a couple of questions from the audience. I see there are some great questions coming in. Sorry. So could we have a short answer by the panelists on this one? How do these tools support processes and enhance decision making for portfolio managers? Phil, do you want to share your thoughts on that briefly?

PHIL WILTSHIRE, COMMERCIAL ASSOCIATE AT FORSA ENERGY
Yeah, so I think in terms of portfolio development, getting a comprehensive understanding of, you know, exactly what value a particular decision makes in a reasonable time is kind of key. You know, m and an activity happens faster than people realize. Trades on an apex platform are happening faster and faster these days. So there's a cognitive load there, so that the more time you spend figuring out how to work your tool, the less time you're spending actually making good decisions. The other side to it is you also don't want to be replicating or duplicating work in that form. And the tools we're seeing today, they're moving away from all of these, everybody having their own way of doing a set thing too. There's a core centralized company truth that we're all reading from, and I think that's really critical to decision making as well.

MARIE PEGOUD FEJOZ, CONTENT LEAD, COMMODITIES PEOPLE
All right, thanks. Irena, something to add on this?

IRINA REITGRUBER, CONSULTANT, AFFILIATE ANALYST AT COMTECH ADVISORY
Well, I think I fully agree with that. I don't think I have much to add. That's basically everything around that has been already said, and I believe that we have already mentioned most of the tools which can help here.

BROCK MOSOVSKY, CO-FOUNDER AND VP, ANALYTICS AT CQUANT.IO
I would maybe add one thing, which is that for the portfolio manager, I think the way these tools can really assist is being able to put a monetary value on different value streams that have been hard to quantify in the past. Things like resiliency, things like the renewable energy certificate component, things like a smoothing of shape to meet some particular goal, even tracking carbon and locational marginal carbon, which is a concept that's starting to gain more traction. I think being able to assign value a consistent way of valuing all those, putting them all into dollars or pounds or euros or whatever your currency is, and then adding up that value stack and looking at where the value is coming from becomes really, really important and that really is a benefit to a portfolio manager.

MARIE PEGOUD FEJOZ, CONTENT LEAD, COMMODITIES PEOPLE
All right, thanks. So on the last question, we won't have time to dive into it that much, but if you could, in a very concise sentence, tell us what you think. As renewable portfolios grow, what strategies can asset owner employees to scale up their teams effectively? How do they ensure that the team expansion doesn't compromise the actual operational efficiency or effectiveness? Irina, do you want to share?

IRINA REITGRUBER, CONSULTANT, AFFILIATE ANALYST AT COMTECH ADVISORY
Okay, we'll start. On one hand, I see that companies employ more development resources in order to create some specific applications for their use over their know-how. So there is development and advanced skills are very demanded on the market. And on the other hand, I see that companies are more and more concentrating on the main business they are doing and trying to outsource everything which is either not profitable enough or requires very specific knowledge which is difficult to contain in the company. So there are also a lot of possibilities for such outsourcing. So we see portfolio management as a service. We see trading as a service, for example, for the individual power producers on having some renewable sites, but not very efficient in trading and don't have resources on that. They are trading as a service offer in the market and scheduling a nomination as a service. So really a lot of service in companies and a lot of need for outsourcing because people are concentrating on their main business.

MARIE PEGOUD FEJOZ, CONTENT LEAD, COMMODITIES PEOPLE
Thanks Phil or Brook, anything to add on to that?

PHIL WILTSHIRE, COMMERCIAL ASSOCIATE AT FORSA ENERGY
Briefly, the only thing, deployability is important, centralizing information is important, and knowing when to pick your battles is important. You don't need to develop everything. Pick the things that are important to your business.

IRINA REITGRUBER, CONSULTANT, AFFILIATE ANALYST AT COMTECH ADVISORY
Perfect.

BROCK MOSOVSKY, CO-FOUNDER AND VP, ANALYTICS AT CQUANT.IO
And I would just add that to have a guiding principle that you can use to structure that growth. It's kind of in line with what both Phil and Irina were mentioning. But knowing where you want to place your efforts is key, because if you spread yourself too thin, it's a recipe for failure.

MARIE PEGOUD FEJOZ, CONTENT LEAD, COMMODITIES PEOPLE
All right, well, we've been warned then. Thanks. That was really, really interesting. Thanks Irina Broker and Phil, for sharing your thoughts on this topic. That's all we had the time for today. I'm afraid this is a bit frustrating not being able to go through the questions from the audience, but don't hesitate to reach out to the panelists here if you'd like a follow up discussion with them. I'm sure they'd be more than happy to engage with you. Next up is the final discussion on the renewables and storage optimization webinar, and it will be on how to optimize trading around battery storage. So that sounds really interesting. So don't forget to tune in. Many thanks and see you all very soon in person or online. Thank you.

IRINA REITGRUBER, CONSULTANT, AFFILIATE ANALYST AT COMTECH ADVISORY

Thank you for having us. Bye.

Written by: Commodities People

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