An ETRM system stands for Energy Trading and Risk Management system. It's a specialized software platform used by energy companies (like utilities, traders, oil & gas firms, etc.) to manage the trading, risk, logistics, and settlement of energy commodities. ETRM is Energy, Trading, Risk Management framework. An ETRM system supports the end-to-end lifecycle of energy transactions, including: 1. Trade Capture • Logging energy trades (power, gas, oil, emissions, renewables, etc.) • Captures deal details like price, quantity, delivery period, counterparty 2. Risk Management • Measures exposure to market risk, credit risk, and operational risk • Calculates VaR, Mark-to-Market (MtM), P&L, Greeks, and stress tests 3. Scheduling & Logistics • Manages physical delivery and nominations (e.g., gas pipeline flows or electricity schedules) • Supports integration with TSOs (Transmission System Operators) and market operators 4. Settlements & Invoicing • Automates invoicing and reconciliation • Calculates financial settlements, taxes, penalties, etc. 5. Reporting & Compliance • Supports regulatory compliance (e.g., REMIT, MiFID II) • Generates audit trails and internal reporting ETRM manages the following Commodities • Electricity (day-ahead, intraday, forward) • Natural gas • Crude oil & refined products • LNG (liquefied natural gas) • Coal • Emissions (carbon credits) • Renewable energy certificates Some widely used ETRM platforms include: • Allegro • Endur (by Openlink/ION) • Trayport • AspectCTRM • Igloo (by Brady) • EnHelix Key business case for ETRM is the complexity of energy markets The energy market is volatile and highly regulated. ETRM systems help: • Manage complex pricing structures (hourly, location-based, seasonal) • Handle both physical and financial energy products • Mitigate risks due to price spikes, counterparty defaults, or delivery failures