TURNING UNCERTAINTY INTO INNOVATION IN ENERGY INDUSTRYHOW MUCH DOES YOUR ETRM COST PER TRADE?

October, 2016

ENERGY COMMODITY PRICES CONTINUE TO BE VOLATILE AS THE EFFECTS OF OVERSUPPLY PERSIST

WHAT ARE THE IMPLICATIONS FOR ETRM TECHNOLOGY USERS?

AND DO THESE SYSTEMS HELP MITIGATE RISKS AND FIND OPPORTUNITIES

IN THIS UNCERTAIN MARKET?

80 companies responded

Geographic focus: • Europe

• North America (including Canada and Mexico)

Primary company types:• Energy traders and

merchants

• Gas and power utilities

• Gas and power retailers

• Industry consultants

ETRM in a Low Commodity Price EnvironmentSurvey

62%

23%

15%

34%

41%

45%

32%

16%

43%

22%

23%

18%

21%

U.S.CanadaMexico

U.K. & IrelandDACHs

Western EuropeEastern Europe

BalkansSouthern Europe

NordicsAPAC

Middle EastLatAm

In which markets do you operate?Note: Totals won't add to 100% as many responding companies selected multiple markets

74%

71%

54%

22%

31%

34%

44%

Natural gas

Electric power

Oil and/or products

NGLs

LNG

Coal

Emissions creditsor allowances

In which energy commodities do you trade?Note: Totals won't add to 100% as many responding companies selected multiple commodities

What are the greatest risks in current market environment?

It becomes imperative to have a streamlined view of ratings, credit limits, and credit annex data, as well as sophisticated credit reports and simulation tools to calculate credit value at risk and enforce credit policy.

see credit risk as the greatest concern for their companies (globally)

59%

What are the most important ETRM capabilities in current environment?

Uncertainty in the market is making holistic risk management and reporting a top priority for energy firms.

view risk reporting as the most important ETRM capability (globally)53%

What are the greatest ETRM challenges in current environment?

indicate disparate systems and integration as the greatest weakness of their ETRM systems (globally)

62%Energy companies struggle with agility because their legacy technologies work under historical conditions that no longer exist.

Does your ETRM system help identify new opportunities?

say their ETRM software doesn’t help them to respond to new business opportunities under current conditions (globally)

76%Lack of alignment between trading, risk, operations and finance systems can result in different figures and prices for the same assets, preventing companies from responding to market changes and new opportunities promptly.

How likely are you to consider cloud migration due to current environment?

50%indicate they would be more likely to consider cloud delivery (globally)

Respondents are looking into cloud delivery options, given the assumption that cloud solutions can provide a lower cost of acquisition and, in some cases, lower TCO.

In summary …

Companies struggle to keep up with regulatory changes and often overlapping requirements that drive the costs up.

Market uncertainty is making transparency into market, credit and operational risk more imperative.

Collapsing revenues are driving the need to reduce costs and optimize profitability, causing companies to closely examine cloud, back-office utilities, managed services and other 2.0 solutions.

xxx

SO …WHAT’S YOUR

STRATEGY?

Three steps to transform energy and commodities trading and operations

Are you ready?

Protect your business1

Turn data into insight2

Simplify complexity3

FIS can help

Simplify your technology stack

Tap into cloud computing

Protect your systems from cybercrime

Visit our website or email us for more information or to schedule a discovery session.

For more insights, see the FIS and ComTech Advisory report: ETRM in a Low Commodity Price Environment.