It has not been launched yet, but during recent simulations, potential users of a new Internet-based trading platform called Voltz were able to watch high volume trading occurring live.
Toronto-based BetterMarkets Ltd. launched the simulation at the end of April for people in the Ontario electricity and energy fields, including municipal electric utilities, generators, industry consultants and wholesalers, to buy and sell simulated blocks of power before Ontario’s electricity market opens in the fall.
According to Philip Roe, a co-founder of the new platform, the simulations allow people in the industry “to get a feel for how electricity is going to trade when the market is deregulated in November.”
When a bid or offer is accepted, the trader involved in the transaction receives an immediate notification and confirmation of the transaction with information such as the name of the counter-party and the size of the trade.
The Voltz platform is not browser-based, Roe noted. “It’s a Java application that runs and uses the Internet as the IP protocols for the network layer. And essentially you download from our site the client side of the application, and we then give you a user ID and password and an administrative password so you can set other users up within your own company, for instance.”
When the application is installed, it sets up the required Java classes and libraries and runs over the Internet, he said. So all the user requires is an Internet connection, and the whole process only takes a few minutes as it is live on-line.
The product is also generic enough that it could be used in other markets, Roe said.
Dan Pastoric, the senior vice-president of electricity at Energy Advantage Inc., based in Oakville, Ont., took part in one of the Voltz simulations. Energy Advantage is an independent consulting and energy management company, which deals with electricity emissions, natural gas, trading or climate change, and engineering in the North American commercial and industrial energy markets. Pastoric agreed with Roe.
“Electricity is still fairly immature, but when you’re looking at true commodities in other marketplaces, I think this would be an excellent tool,” Pastoric said. “And I think it may have greater application earlier on for those industries that are already mature from a (parallel) commodities point of view.”
The ability to view pricing is one of the key benefits of Voltz according to Roe, who said it is a feature that is almost necessary.
“If there is no price transparency, users are at the mercy of intermediaries in terms of how much they are going to pay – they may not know the true cost of the product, but because they don’t have that information, they are stuck,” he said. Voltz’s goal, he added, is to provide transparent marketplaces in real-time on the Internet that will enable users to have true-price discovery. That way everyone will know exactly what the prices are.
As a user, Pastoric said the price transparency on the platform is a huge benefit, as is the whole “trading” experience.
“I think that’s key – it’s helping the electricity community understand how to trade in this marketplace,” he said.
He also found it easy to use. “They did provide an instruction manual with it, but frankly I didn’t use the instruction manual very much,” he admitted. “And I think that’s what a lot of people in the industry want. They want something that’s easy to use…it’s very user-friendly.”
Pastoric said he will definitely be a participant when the site launches live.
And when it does, there will be no charge for the installation process. Instead, there will be a transaction fee to the aggressor – the buyer of the electricity.
“It’s going to be commission driven, just like any broker or middle-man type commission,” Roe explained.
BetterMarkets, originally founded as MyBroker.com, is at www.bettermarkets.com.