Molecule Software Blog

The Molecule Software ETRM/CTRM Blog

Introducing Hive, Our New Renewables Package

The renewable energy market has grown significantly in recent years. And, we're not expecting any slowdown. In fact, the renewables industry is expected to increase by a CAGR of 8.4% from 2020 to 2030.

As renewables continue to make up more and more of our energy mix, companies are managing new renewable financial and physical assets, often alongside other commodities and products. Renewables have unique characteristics that mid-office and back-office teams need to manage.

As the energy industry changes and our customers' responsibilities become more complex, Molecule adapts to keep delivering products that meet our customers' new reality. That's why we created Hive, our new ETRM add-on created for companies trading renewable commodities and renewable instruments, including RECs, RINs, and RGGIs.

With Hive, you can see your P&L, position, and risk exposure for renewables. You can also:

  • Manage your forecast, contracted, and delivered credits and offsets
  • Calculate fulfillments of obligations and alternative payments
  • Manage the full lifecycle around credits and offsets

Unlike managing your renewables trades in Excel, Hive will limit risk by giving you more control and audit trails.

What kinds of organizations should use Hive?

  • Independent power producers (IPPs)
  • Carbon or renewables desks
  • Retail electric providers (REPs)
  • Public companies with ESG requirements
  • Hedge funds

Customers who use Molecule to manage multiple commodities and products will see their performance in Hive alongside other trade data.

Like our other products, Hive's implementation fee is included in our fixed-fee subscription. Hive's first release will be at the end of December, and we plan to keep expanding its feature set throughout 2023.

Renewables Glossary

To help you navigate the complex and evolving world of renewables trading, we have created a renewables glossary for you and your team. Our glossary provides clarity for the key terms to know when it comes to renewables trading.

Our glossary includes over 30 renewables terms. For more experienced renewables traders, it's the perfect tool to brush up on your vocabulary. If you're new to the industry, it will help you understand the key terms used in renewables trading.  

Interested in managing renewables trading with Molecule? Visit our Hive Packages Page for more information - we can't wait to demo Hive with you and your team!

Molecule's Software Release Process

We've Closed Our Series A

Meet Elektra, Our New Power Markets Package

Fixed Fee ETRM/CTRM Pricing For The Win

Molecule bids every ETRM/CTRM opportunity on a fixed fee basis. That is how we bid, every time, unless the customer requires a different price structure.

You might wonder why E/CTRM price structures - and getting a clear understanding of the total cost of ownership - have traditionally been complicated and hard. It's because early market participants have indoctrinated customers to believe fixed-fee pricing is impossible. They continue to win contracts with initial low bids that exclude T&E and do not cap costs (including implementation) because that way the numbers look appealing - at first glance.

Pricing Transparency for E/CTRMs

First, let's look at what our fixed fee includes.

Molecule's pricing includes:

  • Implementation - in about 90 days for main features
  • Feature updates - typically two releases per month, so our customers consistently wake up to modern tech
  • Support - provided by in-house Molecule employees with industry experience

Would we include building a MAJOR new feature you are dying for in that fixed fee? It depends.

We typically strive to meet your current needs and triangulate your requests with what everyone else is asking for. If it fits in our roadmap, you'll get the feature – typically at no cost, when it's ready.

If there's something you need yesterday and want to jump the queue, we'll discuss it with your team. If it makes sense, Molecule can custom-build a solution for you, which will come with a one-time charge. Although this scenario doesn't come up often, we're flexible when it does.

Why Doesn't Every Customer Demand a Fixed Fee Price?

At a glance, the pricing submitted by vendors that refuse to bid on a fixed fee basis can look better.

Let's look at some numbers over the life of a five-year purchase:

  1. Molecule bids $180k/year = $900k over five years for our 100% SaaS, multi-tenant cloud solution. Implementation, feature updates, and support are all included.
  2. A competitor bids $130k/year = $650k over five years, plus a one-time "estimated" implementation fee of $200k, plus support and maintenance at $100k/year.

At first glance, option 2 looks much cheaper. But it doesn't take a math whiz to see that the support and maintenance fees ($650k + $200k + (5 x $100k)) quickly make option 2 the more expensive proposition. In a post-COVID world, saving that $450k - and likely much more - could pay for a new hire or faster computers or bigger bonuses.

But, what if we take the $200k estimate as what it is – a minimum? What if (and this usually happens) the floating implementation fee doubles, triples, or quadruples?

ETRM/CTRM history is filled with legendary examples of uncapped, "estimated" implementation fees ballooning catastrophically. Mansions have probably been built and yachts purchased thanks to implementation fees.  And it's not just cost, but also the headaches accompanying out-of-control implementations. The real total cost of problematic pricing is often found in the rearview mirror.

For example, one of the best inbound leads Molecule has ever received was this (names redacted to protect the innocent):

"I was the business lead on an ETRM project where we swapped out a dated ETRM system called [very old competitor] with a newer one called [.NET competitor]. It was a bloody nightmare and I am scarred for life."

What Can You Do to Protect Yourself?

Evaluate bids in an apples-to-apples comparison. Dig in and understand what a "one-time implementation fee" could really end up costing. Understand the risks associated with that "no cap" provision.

And, always ask for a fixed fee. Every time. Get it in writing.

Fixed fee: for the win.

Selling Against a Fallacy in ETRM/CTRM Software

What Will I Save by Using Molecule?

ETRM: Build vs. Buy

Sales

New Feature: Inventory Tickets

v243 of Molecule released this week! In it was an important new feature for our physical trading customers: Tickets – for delivery, shipping, and inventory.

What do Tickets do?

With Tickets, Molecule users can:

  • Increment or decrement actual volumes when commodities schedule, ship, or arrive, and compare these to contracted volumes
  • Compare contracted renewable credits with physical credit deliveries
  • Manage, mark, and true up inventory buckets directly (as opposed to only via physical trades)

Why is this Important?

Molecule has been on a long journey to build the easiest-to-use & most technologically-advanced ETRM/CTRM. We've supported physical and financial customers on our platform from Day 1 – but our physical customers have often advocated for more features.

Last December, we released our Inventory feature, which takes volumes from settled physical deals,  increments/decrements stored amounts, and calculates weighted average prices. We've enhanced it since then – adding functionality and polishing rough edges – and put it into regular production use.

Tickets is the next logical step in our physical logistics journey: direct access to deliveries and all the complexity around them. We have many enhancements planned for this feature – from custom fields, to a world-class ticket/deal-linking screen, to special options for renewables. We owe a big "thank you," to the customers who have helped us design this feature.

We're working hard on our logistics stack, and there's much more to come – so keep checking in with us!

What fields do we capture?

Tickets are typically linked to a Trade, so can inherit all the trade's attributes. In addition, Tickets can override a price or quantity. Custom fields for tickets are coming soon!

POST API for Tickets

How do I get the Feature?

All Molecule customers on the Core package and up, now have access to Inventory Tickets.

To learn more or ask questions about this new feature, please reach out to info@molecule.io. Or, if you are an existing customer, please reach out to Molecule's customer success team.

New Feature: Custom Fields Galore

The Molecule Ecosystem

Top Questions Our Sales Team Is Asked

Software

Falsehoods About Time in Energy Trading

With Daylight Savings Time starting soon, we've been thinking a lot about time.

At Molecule, we do a lot with power. Which means we do a lot with time zones and hours-of-the-day, and even hours in a day, which – in case you didn't know – varies twice a year, and on a different day in the US and Europe. (Yep, we're talking about the daylight savings time switchover days).

Our lead engineer brought this readme to our marketing team's attention. It reminds me of the hours spent agonizing over the minutiae of time zones, with regards to energy markets. It's worth a read, and I'd like to add a few more Falsehoods About Time:

  1. Hour-Ending fits in a date data type
  2. Power market operators choose time zones based on easy, constant differentials from UTC
  3. Power market operators always choose time zones that line up with their geography
  4. Power markets span single time zones
  5. The DST switchover day is the same in every country
  6. States and municipalities never change their minds about which time zone to be in, when.

Time is just plain hard!

There might be people who believe that we're overcomplicating things with all of these concerns. (Honestly, we originally had some of those concerns as well!). But a key takeaway is, on the day of the DST changeover in a locale – we call that the DST transition day – someone needs to put an hour extra worth of coal in the generator. Or an hour less.

Power itself is complicated to trade. There are myriad contract types and prices across seven ISOs in the US alone. Power itself is complicated post-trade when operations teams have to perfectly balance the grid's supply and demand. And, things are getting more complicated as we introduce more and more types of power like renewables.

So, properly handling time is crucial ETRM functionality, and over-thinking it is absolutely called for when trading power. 1.21 gigawatts/plutonium won't solve this time conundrum, but thoughtful coding and attention to detail will.

Software

Selling Against a Fallacy in ETRM/CTRM Software

One of my favorite things about being a Molecule is that we under-promise and over-deliver. Regularly.

When I'm on a demo with a prospect and they ask for a new feature to be delivered by a particular date? Nope, no can do.

WILL we do it? Maybe. But only via a contract and if our CEO 100% knows we can deliver.

We strive to be honest and factual about our ETRM/CTRM software. What we can and can't do.

Working for a company like this is refreshing - I've worked on the other side of this when it comes to company values.

One thing I've never done in my career is bad mouth a competitor. There's no point. We focus on solving our customers' problems better than anyone else. We trust that our team's integrity is evident.

In this post, let's look at software in general. I've sold a lot of it, so I have outside perspective as well.

Timelines and Costs

In every industry there are companies that bend the rules when answering RFPs, promising a new feature, or even mocking up an 'MVP' and calling it a production feature. Lots of companies promise a timeline for implementation or feature development, and then riddle customers with change orders and blast the implementation costs to the moon.

The ETRM/CTRM industry wrote the blueprint for decades-long implementations that balloon costs into the billions.

Product Quality

I want software to work like technology from Minority Report. But other ETRM/CTRM platforms don't. I've seen them.

Building Trust with Customers

How does Molecule combat our customers' fears of a vendor lying to them? Here are some of the big ways, and we challenge you to ask your vendors to do the same.

  1. If we promise a new feature, we'll tie it to a timeline in the contract. And we meet that deadline.
  2. We are open to Proofs-of-Concept. If we don't meet your requirements, you can walk away. Ask a monopoly to do this. Please.
  3. We do not lie in RFPs.
  4. We provide support our customers adore, with live, full-time Molecule employees. Check out what our users say about our support on Molecule's G2 page.

That being said, we are not perfect. We've missed a deadline before. Every now and then we find a bug. We are humans writing code and running a company with the end goal of making our customers' lives better.

Maybe it's to our detriment that we answer RFPs with total honesty. We lose more of them than we win. But we know this for a fact: companies that choose Molecule come to learn that we strive, on a daily basis, to outperform any other ETRM/CTRM they have ever used–or ever will.

Fixed Fee Pricing for the Win

The Molecule Ecosystem

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