Newark, June 05, 2024 (GLOBE NEWSWIRE) -- The Brainy Insights estimates that the global energy trading and risk management (ETRM) market will grow from USD 1.47 Billion in 2023 to USD 2.26 Billion by 2033. Trading is a crucial aspect of ETRM as it entails the exchange of energy commodities among different markets. The process involves several drivers, including demand-supply fluctuations, regulatory amendments, and prevailing sentiments in the market due to geopolitical factors. Traders utilize sophisticated analytical tools to recognize profitable prospects and execute trades precisely while optimizing their portfolios to align with marketplace trends and organizational objectives. Given the volatile and uncertain nature of energy markets, risk management is critical to ETRM.
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Scope of Energy Trading and Risk Management (ETRM) Market
| Report Coverage | Details |
| CAGR | 4.4% from 2024 to 2033 |
| Market Size in 2023 | USD 1.47 Billion |
| Market Size by 2033 | USD 2.26 Billion |
| Largest Market | APAC |
| Base Year | 2023 |
| Forecast Year | 2024 to 2033 |
| Historical Year | 2020-2022 |
| Segments Covered | by Type, End-Use, Regions |
| Regions Covered | North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa |
The effective management of risks involves identifying, assessing, quantifying, and mitigating various types, such as credit risk, operational risk, and regulatory compliance, among others. Among them, price stands out particularly because it results from fluctuations in commodity prices; hence, it can profoundly impact financial performance on trading operations. To mitigate this type of risk, traders use hedging strategies like futures contracts, options swaps, or other derivatives to offset possible losses resulting from unfavourable price changes.
Key Insight of the Energy Trading and Risk Management (ETRM) Market
Asia Pacific region is expected to grow at the highest CAGR during the forecast period.
During the forecast period, Asia Pacific is expected to grow at the highest CAGR within the global energy trading and risk management (ETRM) market. The Asia Pacific region will significantly expand. The Asia Pacific area includes developing countries such as China, India, Japan, Australia, and Singapore. Over the years, it has become an increasingly important market for ETRM solutions, with its rapid growth and dynamism fuelled by urbanization initiatives alongside economic expansion combined with industrialization across all sectors, leading to rising energy consumption. This region is home to some of the world's largest economies, which are currently experiencing fast growth rates as they drive demand for energy commodities required in powering infrastructural development projects designed to support further economic prosperity while promoting sustainable use practices throughout various cities within this extensive region.
The services segment is expected to grow at the highest CAGR during the forecast period.
The type segment includes services and software. The services segment is expected to grow at the highest CAGR during the forecast period. Services and software solutions are integral to the ETRM market ecosystem. Services offer crucial support, such as implementation, customization, integration, and training, to energy companies to maximize their investments' value. A wide range of consulting firms, system integrators, technology partners, and managed service providers provide ETRM services that aim to support businesses throughout every stage of their project's lifecycle. Leading service providers provide diverse services that cater to energy corporations' unique necessities and demands. These inclusive offerings include strategic guidance, streamlining business procedures, creating solutions architecture, executing system implementation plans, managing projects effectively, providing efficient training support, and constant assistance for sustained growth benefits.
The oil and products segment is expected to grow at the highest CAGR during the forecast period.
The application segment includes power, natural gas, oil and products and others. The oil and products segment is expected to grow at the highest CAGR during the forecast period. Trading of oil and related products makes up a significant share of the global ETRM market, reflecting their crucial role in global energy markets and economies. The prices for crude oil are susceptible to fluctuations due to various factors, including geopolitical tensions, production quotas, inventory levels, refining margins, and transportation constraints, which create opportunities for trading. An effective solution is required by traders engaged in buying or selling such commodities that will help manage risks associated with price volatility while optimizing operations through functionalities like product blending, refinery optimization, and inventory management, thereby simplifying complex supply chain issues linked with distribution as well as transporting raw materials from source to refineries before they can be sold on world commodity exchanges.
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Recent Developments:
• In September 2020: Pioneer Solutions LLC is a prominent provider of front-to-back-office commodities/energy trading and risk management (C/ETRM) solutions. Its headquarters are in Denver, Colorado, USA. Hitachi ABB Power Grids has acquired a significant contract to acquire Pioneer Solutions LLC. As a result of this expansion, the company will offer effective service and solutions to their customers.
Market Dynamics
Driver: Growing Globalization and Liberalization of Energy Markets
The growing trend towards globalization and liberalization of energy markets worldwide is a major force behind the expansion of the ETRM market. With economies diversifying and expanding, there is an increasing demand for transparent and efficient systems that easily enable trading in different regions across borders. Promoting these initiatives aimed at improving efficiency has led to significant opportunities for traders involved in cross-border activities, resulting in wider adoption of ETRM solutions that assist them in dealing better with complexities related to international operations.
Restraint: Cybersecurity Threats
The global ETRM market faces significant hindrances regarding cybersecurity threats and data privacy concerns. This is due to the rise in frequency and sophistication of cyber-attacks targeting energy companies' trading platforms, infrastructure, and sensitive information. The consequences of such breaches can cause serious damage, such as operational disruptions, reputational harm, and financial loss, among others, thereby threatening business continuity for traders. This factor is anticipated to hamper the market growth and development.
Opportunity: Market Expansion in Emerging Economies
Global energy supply, demand, prices, geopolitical developments, and macroeconomic trends impact the global ETRM market. Tensions between nations, conflicts, trade disputes and sanctions lead to disruptions in the energy supply chains, causing price volatility and leading to challenges for traders. Macroeconomic factors like inflation rates, interest rates, currency fluctuations, and government policies affect consumption patterns and shill investment decisions, shaping trading strategies according to prevailing market presumption.
Some of the major players operating in the Energy trading and risk management (ETRM) Market are:
• Brady Technologies
• Enuit LLC
• SAP
• EKA Software Solutions
• Publicis Sapient
• Fendahl International
• Fidelity National Information Services Inc.
• IGNITE CTRM LLC
• CommodityPro
• nGenue LLC
• Open Access Technology International Inc.
• ION Group
• Enverus Inc.
Key Segments Cover in the Market:
By Type:
• Software
• Services
By Application:
• Power
• Natural Gas
• Oil and Products
• Others
By Region
• North America (U.S., Canada, Mexico)
• Europe (Germany, France, the U.K., Italy, Spain, Rest of Europe)
• Asia-Pacific (China, Japan, India, Rest of APAC)
• South America (Brazil and the Rest of South America)
• The Middle East and Africa (UAE, South Africa, Rest of MEA)
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About the report:
The market is analyzed based on value (USD Billion). All the segments have been analyzed worldwide, regional, and country basis. The study includes the analysis of more than 30 countries for each part. The report analyzes driving factors, opportunities, restraints, and challenges to gain critical market insight. The study includes porter's five forces model, attractiveness analysis, product analysis, supply, and demand analysis, competitor position grid analysis, distribution, and marketing channel analysis.
About The Brainy Insights:
The Brainy Insights is a market research company that provides actionable insights through data analytics to companies to improve their business acumen. They have a robust forecasting and estimation model to meet the client's objectives of high-quality output within a short period. They provide both customized (client-specific) and syndicate reports. Their repository of syndicate reports is diverse across all the categories and sub-categories across domains. Their customized solutions meet the client's requirements whether they are looking to expand or planning to launch a new product in the global market.
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