BRADY MARKET UPDATE:
May 2025 webinar
15-minute settlement, algos, compliance and more
Agenda
- Market Shifts in Europe: Current changes, including the rise of algorithmic trading and a deepening focus on security of supply.
- Transition to 15-Minute Settlement: Why Europe is moving to finer settlement periods and how different exchanges are responding.
- Impact on Liquidity & Market Depth: What to expect in both the day-ahead and intraday markets.
- Technology & Automation: How new tools and platforms are helping traders handle increasing complexity.
- Algorithmic Trading in Energy: What sets advanced algo solutions apart from simpler trade automation.
- Brady’s PowerDesk & Edge: An inside look at building your own trading strategies and integrating them end-to-end.
- Compliance Considerations: How changing regulations and kill-switch requirements are reshaping the role of compliance managers.
Webinar Q&A
Want a preview of what you can learn more about in the May Webinar? Some of the key highlights are below:
What’s New in European Power Markets?
European power markets are seeing a surge in algorithmic trading, which is boosting liquidity yet adding complexity. At the same time, the industry is watching how different exchanges will handle the move to 15-minute settlement. EPX (European Power Exchange) has voiced reservations about the market’s readiness, whereas Nord Pool is pushing ahead. These differing opinions reflect the tense and competitive landscape among major European exchanges.
Meanwhile, the conversation around security of supply has intensified, especially after recent outages in Spain and Portugal. We’re seeing greater emphasis on redundancy and flexible, low-carbon solutions, especially batteries. Flexible dispatch used to be simpler with coal and gas, but as wind and solar expand, battery technology becomes crucial for backup and balancing.
How Does This Relate to the 15-Minute Settlement Transition?
Although the drive toward 15-minute settlement partly stems from the broader renewable energy transition, it also reflects Europe’s push for market harmonization. Trading in the same time intervals across borders—whether 15-minute or hourly—makes it easier to move power between different countries and reduce overall costs to consumers.
Not every region is on the same page. Great Britain, for example, shows no immediate plans to shift from a 30-minute settlement to 15 minutes. Brexit has also allowed GB to deviate from certain EU guidelines, making it less likely to adopt finer settlement periods soon.
What’s the Expected Impact on Liquidity and Market Depth?
When trading day-ahead, most market participants won’t see a massive change beyond handling four times as many auction intervals (96 instead of 24). However, intraday continuous trading could see higher workloads and complexity. Automated solutions are more in demand as traders cope with finer granularity and the need to manage positions around the clock.
Regardless of time horizon, the increased complexity highlights the importance of robust technology solutions that help traders avoid errors and streamline the process. The move to 15-minute intervals will likely spur more sophisticated software adoption to handle the added data load.
Which Technologies Can Help Traders Manage These Changes?
The complexity of juggling multiple intervals, bids, and balancing requirements has led many traders to adopt specialized software. For instance, advanced day-ahead “Co-pilot” solutions can help verify orders, cross-check differences from previous days, and simulate auction results. This not only saves time but reduces human error when inputting high volumes of data.
Other areas—like Nordic ancillary services—are also changing. New market rules mean traders need to automate previously manual processes (e.g., recalculating and submitting headroom/footroom). Modern power-trading platforms consolidate multiple markets and services into a single view, showing net open positions across countries and time intervals. This unified approach helps traders maintain clarity and accuracy.
How Are Algorithmic Trading and Automation Evolving in Energy?
Initially, many energy-trading “algos” were more about trade automation—simplifying repetitive tasks rather than delivering alpha. Now, more sophisticated algorithmic strategies aim to predict market movements and execute trades that capture real pricing advantages.
In finance, banks typically build custom algo solutions in low-level languages like C, whereas energy traders have historically relied on simpler rules-based systems. Today, Python-based solutions are emerging that let data scientists incorporate machine-learning libraries to interpret historical price data, forecast short-term price movements, and execute more informed trades in real time.
What Sets Brady’s PowerDesk Edge Approach Apart?
Unlike “ready-made” algos that everyone uses, Brady offers an “algo ecosystem” where your team builds and owns its unique intellectual property. PowerDesk Edge provides a Python library of “building blocks” (for aggressing orders, managing slippage, etc.) that can be combined with your custom logic and external data sources.
By mixing standard building blocks with your own proprietary models—like AI-based price forecasting—you can create algo strategies that align precisely with your trading philosophy. This not only preserves your competitive edge but ensures you’re not relying on generic strategies that dozens of other market participants might also be running.
How Does It All Fit into an End-to-End Trading Workflow?
For full coverage, traders need more than just an algo engine. They also need:
- A real-time view of positions and forecasts (PowerDesk Core).
- A single source of truth for data, particularly forecasts and trades (Data Manager).
- Scheduling and nomination tools to inform Transmission System Operators (TSOs) (PowerDesk Scheduler).
- An overarching ETRM system for managing longer-term positions (e.g., Igloo).
By combining these elements, you create a seamless trading lifecycle, from initial price forecasts to final dispatch instructions. All your trades are automatically logged, aggregated, and viewable in a single platform.
What Are the Compliance Considerations Around Algo Trading?
Evolving regulations like REMIT (Regulation on Wholesale Energy Market Integrity and Transparency) and MiFID II place increased scrutiny on algorithmic trading. Compliance managers must be able to audit and, if necessary, instantly halt any algo that misbehaves—often referred to as a “kill switch.”
Firms adopting advanced automation will need robust workflows for backtesting, real-time monitoring, and post-trade review. Compliance officers are becoming more embedded in day-to-day trading operations, ensuring technology-driven strategies remain within legal and ethical boundaries.
Let's have a chat.
We hope you found Brady’s May 2025 Market Update interesting.
If you would like to find out more about how PowerDesk can solve some of the challenges discussed, we would love to hear from you.
