Reports ETRM in a Low Commodity Price Environment | Page 3

ETRM in a Low Commodity Price Environment

DEMOGRAPHICS
Our research effort focused on ETRM users in North
America and Europe, the two largest markets for trading natural gas, power and other energy commodities – and by extension, the largest markets for energy trading and risk management software. Our online survey received a total of 125
responses. After removing those that did not meet our criteria
for inclusion, 87 responses, representing 80 different firms,
were utilized in our analysis.
In terms of the geographic coverage of those respondents,
approximately 60% were primarily US companies (some with
offices in Canada and Mexico) and 40% were primarily Euro-

pean based, with the European responses reflecting virtually
all regions of the pan-European markets. The company types
reflected in our response group include energy traders/merchants, gas and power utilities, gas and power retailers, industry consultants and a lesser number of producers, pipeline/
transmission operators and others. These companies trade or
transact in all manner of energy commodities (including gas,
power, oil and oil products, NGLs, LNG, coal, and emission
credits), though natural gas and power were the most commonly noted, with more than 70% of the respondents trading
either or both.

FINDINGS
Market Influences on Price Formation
Q: Which ONE factor do you believe has the greatest impact on CURRENT energy commodity prices?

While acknowledging the impacts that oversupply of
energy commodities is having on prices, many European respondents note that the Increasing Use of Renewable Energy
Sources is having a significant impact on prices in their markets. In fact, almost twice as many European respondents (vs
those from North America), on a percentage basis, believe
renewables are having the greatest impact. This difference
is likely in response to the sometimes detrimental influence
subsidized renewables have had in many European markets,
such as Germany, where the forced retirements of nuclear
plants have resulted in significant market disruption.

Over Abundance of Supply
Increasing Use of Renewable Energy
Resources
Lack of Market Growth
All of the Above Equally
Other
Increasing Regulations
Level of Speculative Activity

Lack of Market Growth was the third ranked concern for
North Americans, and ranked near bottom with Europeans.
With the collapse in energy