The Future of Data Analytics in Energy Trading with cQuant.io CEO

In 2021, Molecule partnered with cQuant.io to deliver advanced analytics for our customers’ asset and trade data. cQuant.io specializes in total portfolio analysis and is the leader in analytics for renewable, storage, and other clean energy technologies. We partnered with cQuant.io for many reasons - including our shared views of technology.

We sat down with David Leevan, cQuant.io's CEO, to discuss how they harness the most modern, innovative tech and how they're staying at the forefront of the energy analytics industry.

David Leevan, cQuant.io CEO

Could you share cQuant.io’s elevator pitch and how you stand out from other analytics companies?

cQuant.io is a modern energy analytics platform. cQuant.io is a cloud-native application with data science tools, flexible APIs, and powerful analytic models. cQuant.io allows users to examine their energy portfolio, project the future value and optimize hedging to a specific risk strategy.

Tell us about your career path. What attracted you to the world of energy analytics?

I started in energy analytics in 2001 after working for a couple other dot-com companies in the late 1990s. After several fun experiences with various energy software companies, I landed at OpenLink in 2015.

However, I was dissatisfied with how poorly many software vendors treated their customers and saw an opportunity in cloud computing to make a difference. I really wanted to end the kleptocracy of the top energy software firms by providing a superior product with superior service at a fraction of the cost.

What was it like starting cQuant.io?

It was harder than I thought it was going to be! We decided not to take any substantial outside funding, which made it harder. For the first three years, we worked for peanuts, but we established a handful of great customer relationships, and then (finally) the business began to grow rapidly.

What role does the cloud play in your software? What other technologies have you used in the cQuant.io platform?

cQuant.io made a few decisions very early in our development, which proved to be meaningful. First, we only focused on cloud computing. In 2023, that seems like a no-brainer. But in 2016, most energy companies still wanted on-prem solutions.

Secondly, we maintained a single codebase. All customers use the same model and platform code as everyone else.

Thirdly, we took zero shortcuts. This was probably the hardest discipline to follow.  It is amazing how tempting it is to grab business with sub-par solutions. But we managed to avoid those temptations, and (because of that) cQuant.io became a solution that is currently being used by the largest global energy companies.

Have the reports and metrics your users want changed over time? How so?

For sure. The cQuant.io team is constantly learning from our customers. Especially in renewables and storage, our customer relationships have enabled cQuant.io to stay current with industry needs. For example, renewable & battery storage metrics are evolving on a different trajectory from traditional energy portfolio metrics.

cQuant.io can stay current with these changes as we are typically embedded inside our customer operational teams. Another good example is hedge optimization. Our customers are more interested in portfolio analytics as opposed to asset-by-asset analytics. The end goal for those customers is a true hedge optimization report customized to their specific risk objectives.

What are common misconceptions people have about energy analytics?

Wow, there are so many. The biggest mistake energy companies make is trying to develop internal analytic solutions. The misconception is that an internal quant can meet the company’s requirements for enterprise analytics.  This approach has failed so many times, but energy executives continue to make the same mistake. It’s like Groundhog Day.

cQuant.io’s models were developed by our team of Ph.D. quants and then vetted by dozens of customers in both the US and Europe. Our customers are continuously providing feedback on ways to improve cQuant’s analytics and our enterprise platform.

This global vetting process means that cQuant’s analytic tools can be relied upon for almost any energy application.

What do you see companies doing that you wish they did differently?

Building on the previous answer, I would simply say that energy executives should take analytics more seriously. It's not just about reporting a VaR out of their ETRM solution.  The question they should be asking is, “how can I squeeze every last bit of value from my portfolio while simultaneously minimizing financial risk?”

What’s the most exciting thing going on in renewables?

The energy transition is happening so fast - it’s unbelievable. I still remember in the early 2010s, reading energy experts who said that renewable energy would never exceed 20%. But the growth in renewable and storage is also increasing uncertainty and making portfolio management more complex. This is obviously great for our business.

What do you think is the most overhyped tech?

Artificial Intelligence. Thus far, AI has not impacted energy markets the way some people forecasted ten years ago.

What does 2023 have in store for cQuant.io?

cQuant.io continues to grow at an exceptional pace. This year, our team will grow by 30% or more. cQuant.io has several new products and services that will be released in the first half of 2023. Unfortunately, I cannot say more on that subject yet.

Who owns the best family dog in the world?

This question is terribly dangerous to answer, as there is a fierce cQuant competition for best dog. I will just say that our Aussie dog, named Ginger, is the best for us.


We can't wait to see what 2023 has in store for cQuant.io, and we're so grateful to partner with a company that values innovation, modern tech, and animals just as much as we do!

Molecule's modern, scalable E/CTRM system, paired with cQuant.io's advanced analytics, offers our customers the most optimal risk management experience. Please reach out for a demo with us today!

PeopleFeatures

What to Expect After You've Signed the Dotted Line

You’ve signed your contract with Molecule, and you're ready to get started with your new ETRM/CTRM... now what?

Here's what you can expect over the next few months as one of our new customers.

Our Timeline

We'll try to have your team up and running in our system in 90 days. However, the process will take longer if you deal with a lot of data, complex deal types, multiple desks, and/or a large variety of trades.

For all project sizes, we will develop a project plan with you, and over the course of your implementation, you'll meet with our customer success team to keep your project on track.

Our Process

Molecule's implementation process.

Phase 1: Getting to Know Your Company

Our team will meet with your team to develop the project plan. We'll build a timeline for when you can expect to be up and running in our app.

We'll identify the data flows, storage and reporting, and discuss the items we will need from you to move efficiently through the implementation, such as existing or sample data and integration credentials.

You'll have a project manager from our customer success team who will work closely with your team to ensure the implementation and onboarding process runs as seamlessly as possible. The project manager will assign Molecule analysts and subject matter experts to join specific meetings or project phases as needed so that you get the full range of resources at the right time.

During this phase, we'll also discuss what success looks like for you and your team and how you can get the most out of your Molecule implementation.

Phase 2: Getting to Know Your Data

In this stage, the project team will understand exactly what your trading business is all about and determine how best to model it in Molecule.

If you've already started trading, we'll review your position spreadsheets and understand your strategies and products being traded.

We’ll have a series of working sessions in which we’ll go into detail on topics such as trade entry, forward curves, and settlement price sources to ensure your data will be complete and mapped properly.

If you haven’t started trading yet, there may not be any trades to load. In that case, we'll ask for sample trades and gather your trade credentials to load future trades.

Phase 3: Molecule Configuration- Books, Products, and More

Next, we'll start configuring your products. Molecule product configuration involves a detailed setup so that trade entry can be easy. Our product hierarchy allows complex linkage of child products, marking products, and settlement products, including formula pricing.

We'll also establish a book structure for your assets and trades.

Once the products have been set up, your trades can be entered in Molecule. For existing trades, we'll start mapping them and preparing for import. We'll transform the product attributes and map them to counterparties, brokers, etc.

Phase 4: Loading Your Data

A key part of any Molecule implementation is setting up integrations. If you're trading on exchanges, Molecule connects to over 15 FCMs and supports positions tradable on ICE, CME, Nodal Exchange, and OTC trades. We’ll ask you to have your credentials ready for automated position capture on these exchanges and walk you through the process for requesting the exact credentials we need.

If you purchased our Elektra add-on, we'll ask for your credentials for any ISOs you plan to trade on. Molecule connects to seven different ISOs for position and settlements.

Phase 5: Validating Data and Training

We'll ensure all your data made it into our app, everything is correctly mapped, and products are marking and settling correctly. If something doesn't look right, we'll make additional revisions.

During this time, our teams will work closely with one another, as we train you on how to use our software. Your team will learn to navigate the system, enter and import trades, and manage other data, such as broker information, delivery dates, and forecasts.

We'll also verify your positions and analyze P&L. Your trades will be automatically marked, option greeks will be calculated, and VaR will recalculate with every new trade.

Phase 6: Reporting

Once your data is imported into Molecule, validated, and new trades are flowing, we'll work with you to ensure that you have the data extracts and reporting you need to manage your book.

The first type of reporting you can do in our system is with our trade and valuations screens. You can build saved views on these screens to:

  • Sort
  • Filter
  • Customize columns and layout
  • Pivot
  • Group
  • Sum

The second type of reporting in Molecule can be done through our API. With it, you can:

  • Use a BI tool (i.e Microsoft Power BI) to pull data from our API for your own reports dashboards
  • Download raw data which can be opened in another program such as Excel Use a data connection tool (i.e. Excel Power Query) for a live data connection to Molecule

The third type of reporting is our custom reports, which are built into our app by your implementation team.

Post-Implementation

After implementation, we’ll reduce our meeting frequency as you get comfortable using the system independently. We’ll still be around for questions, and you'll also be able to refer to our online help page or send your questions to our Support team - we're always happy to help and hear from you!

What Will I Save by Using Molecule?

How Much Does an ETRM Cost in 2021?

Spreadsheets vs. Software

Customer SuccessGetting Started

Digitization vs. Digitalization in the E/CTRM Industry

At the end of November, Sameer, Molecule's Founder & CEO, joined Commodities People in their energy trading digitalization panels.

At the beginning of one of the sessions, panelists discussed the differences between digitization and digitalization in the context of E/CTRM systems. Each of these also plays an important role in companies working towards a digital transformation.  

In case you couldn't join, here are some of the highlights from the conversation.

What is Digitization?

Digitization is the process of converting existing data or other information into a digital medium. Digitization, or the transition from analog to digital information, is often considered the first step toward digital transformation.  

Although digitization makes information easier to access and share, it's a much more basic function than digitalization. However, companies must digitize to take advantage of AI and ML.    

The Role of AI and ML

Artificial Intelligence (AI) and Machine Learning (ML) are essential components of moving out of digitization and into the digitalization stage.

What people call AI today tends to be advanced ML. There is a broad spectrum of ML that is often branded as AI.

Because of AI and ML, E/CTRMs can automate the following:  

  • Data collection
  • Data analysis
  • Forecasting
  • Market changes
With AI’s ability to rapidly process large datasets coupled with its pattern recognition ability, trading surveillance processes can better isolate anomalous trading activity.

In turn, companies implementing advanced ML can quickly make more holistic, data-driven decisions. Teams can focus on more pertinent tasks instead of data collection and analysis.

What is Digitalization?

Digitalization is a more complex process of digitizing business processes - rather than just information - to improve the functionality of the software you use.

During the panel, a poll asking, "what drives your digitalization efforts?" yielded the following responses:  

  • 31% of the audience responded 'competitive advantage'
  • 31% of the audience responded 'control and transparency'  
  • 29% of the audience responded 'growth and revenue booster'
  • 10% of the audience responded 'harmonization across the supply chain'

The results show the benefits of digitalization are (almost) equally valuable across the board. In addition to a competitive edge, digitalization promotes control, growth, revenue, and standardization across systems.

Digitalization allows businesses to automate the day-to-day processes of their employees using technology. One of the ways companies can automate processes is through APIs.  

What are APIs?

APIs, or Application Programming Interfaces, are standard functions and procedures that allow systems to communicate with another application or service's features or data. People can automate processes using APIs, such as building data lakes, trade capture screens, custom integrations, and more!

There are common industry-wide standards for APIs, like REST, JSON, and Web Sockets - many of which Molecule uses and implements.    

APIs have significantly helped companies on their journey of digital transformation.    

What is Digital Transformation?

Digital transformation integrates technology into all aspects of business. Digitization and digitalization are the steps companies can take toward digital transformation.

As discussed on the panel, digital transformation is about "pushing the envelope" and embracing innovation. It goes beyond digitization and digitalization because it calls for companies to constantly evolve and advance as new technology emerges.  

A digital transformation strategy gives companies a competitive edge by showing customers they are willing to adapt and progress to be on the cutting edge.

Digital transformation looks different across each industry and company, so it's important to focus on individual goals and invest in relevant technology that helps you achieve those goals.  

To truly achieve a digital transformation, however, it's not technology at the center but people prioritizing innovation and opportunity. A great company can only succeed with the best management and employees, and it's no different in the world of digital transformation.  

Digital Transformation and the Cloud

Cloud technology has revolutionized the tech industry as well as the E/CTRM world.

"Cloud is an important driver behind digital transformation."

Although it's hard to pinpoint one definition, the cloud is essentially a network of servers that function in one centralized ecosystem. Therefore, data is processed in the cloud rather than on an individual internal hard drive - think Gmail.    

According to AWS, the cloud promotes the following:

  • Agility
  • Flexibility/Scalability
  • Cost-efficiency
  • Global connectivity

Since all of these servers operate within one ecosystem, it's easier for them to communicate and interact with one another.

There are three types of cloud computing:

  • SaaS (Software as a Service)
  • IaaS (Infrastructure as a Service)
  • PaaS (Platform as a Service)

For on-prem legacy systems, each user is restricted to one physical server. Since software and infrastructure are restricted to one server and user, this is considered single-tenant software. So how do these companies get onto the cloud?

Cloud-Enabled Tech

Cloud-enabled tech is a software system moved into the cloud instead of being deployed on-prem. Legacy E/CTRM systems were built to operate on-prem before tech was built to run in the cloud, so they can be very difficult and costly to move onto the cloud.  

Cloud-enabled technology is typically single-tenant and often less scalable than cloud-native counterparts.

Cloud-Native Tech

Cloud-native tech was built to thrive in a cloud environment, meaning cloud-native apps are "designed and built to exploit the scale, elasticity, resiliency, and flexibility the cloud provides." Since cloud-native apps share the same server, software, and infrastructure amongst multiple users, it's considered multi-tenant software.

Thus, cloud-native tech enables digitalization through modern technology, such as containers (software packages).

The cloud promotes agility, productivity, and collaboration. Compared to legacy solutions built on-prem, or even legacy solutions that have moved to the cloud without being rebuilt from the ground up, cloud-native technology is:

  • More accessible
  • More secure
  • More scalable
  • Cost-effective
  • Automated and time efficient

Over the past decade, the industry has undergone its digital transformation with many newer cloud-native E/CTRMs challenging the limitations of longstanding legacy systems.

Where is Molecule in the Process?

Since Molecule is a cloud-native, multi-tenant SaaS company, digital transformation has been on our radar since day one. Innovation and cutting-edge tech have always been a part of who we are.

Many of our values are at the heart of digital transformation. So what are some of these values? We're known to:  

  • Challenge the status quo
  • Constantly innovate our own solutions
  • Embrace bleeding-edge tech
  • Set clear goals and use data to evaluate the best solutions
  • Learn from seeing how others use technology

We were founded on the principle of innovation and a love for technology. Molecule was built in the cloud, so our team and customers don't have to worry about transitioning into the digital world - we're already here.

Just because we've already undergone our digital transformation doesn't mean we'll stop finding new ways to innovate and create the best software for our customers.

What We Value

Molecule the Product: Looking Back on 2021

Introducing Hive, Our New Renewables Package

 

SoftwareValues

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