Retail Energy and Structured Financial Products
QR Trade Capture offers the capability to create from scratch and rapidly configure via user friendly wizards, special trade capture pages with user defined input fields, to fully capture the specifics of a given trade in your market. These can be used for:
- Retail electricity and gas trading, down to end-user meters.
- Structured financial products, combining complex trades, options and derivatives across multiple asset classes.
Many trade capture templates can be created to account for a diverse set of pricing plans in your portfolio:
- For example, typical retail electricity deal fields you can enter are, profile, voltage, tension, tenant and master load percentage within a meter premise, and many others.
- Complex curves and indices can be entered and used in the pricing of the deal, e.g. prices, charges, incentives, fees, tariffs, penalties, transportation, transmission loss factor (TLF), etc.
- Each pricing plan / structured product can have a different instance of given charge or fee curves. E.g., for retail electricity deals, there can be different TLF curve depending on client's load and voltage type.
- To get a perfect settlement and billing sheet, a user friendly panel allows you to specify which charges or fees are absorbed (paid by you) and which are passed to your client.
Enter Deal Valuation Formulas
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How to create a Retail Energy or a Financial Structure Product book?
- Structures products are OTC and client specific, and so are retail energy contracts. Based on what is traded in your market, and your supply portfolio, create as many trade capture pages or template as you need to cover all the transaction types (Pricing Plan or Structured Product) you are willing to trade with your clients.
- The collection of the custom trading templates you have created is used to create your Retail or Structured Product book. This can be done as fast as the deals fields are typed in. Organization into various books or portfolios is done instantly.
Create your Own Deal
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Hybrid products
- Hybrid products can be created by combining existing retail energy plans or financial structured products.
- Combining plans is done per user specified criteria. Typically in retail energy plans, given segments of a deal's volume or load are priced via different retail plans.
- QR Trade Capture has automated the process of creating hybrid products With a click of the mouse, you can combine existing plans. This feature can also be used for complex physical transactions of various commodities and energy product requiring, transformation / shipping / storage at various stages, each with additional costs and constraints.
A few variations of electricity retail Pricing Plans that can be easily entered in our systems:
| Name | Description | Equation |
|---|---|---|
| Variable Rate Plan | This price is set monthly by your Company based on the price they have to pay in the wholesale market, which is dictated by supply and demand. That price is passed along to the consumer, with admin costs and a profit margin built in. | Price = CMIP + Admin Fee
where CMIP is your Company Monthly Index Price, calculated at close of each month based on volume weighted average of all electricity purchases by your Company. |
| Discount Rate Plan | Price that is based on the Pool regulated price, less a certain amount. For example, it would be stated in the promotional material and the contract as "Always 5% less than Pool". | Price = Discount % * POOLMIP
where for example Discount % = 0.95 and POOLMIP is POOL Monthly Index Price (means 5% discount) |
| Fixed Rate Plan |
This is a fixed price for electricity supply for a fixed period of time. The price and the term are set out in the contract. This gives the customer the benefit of knowing their energy costs for that period of time. If prices rise above contract price, they benefit. Company must hedge this contract, by buying a fixed price mid to long term electricity contract from a provider or lock in the fuel cost as a hedge and run a plant for production, and price the Fixed Price above cost of acquisition. |
Price = Fixed Rate
Note: Fixed Rate can be different across various delivery profiles (e.g. Peak and OP) δ = Fixed Price - Cost of Acquisition is the locked profit for Company Cost of Acquisition = USD FX * Fuel * Heat Rate |
| Rate Cap Plan | Company will supply electricity to the customer at the best price it can. However, Company guarantees that the rate will not rise above a certain amount, regardless of the current market price. This protects the customer from extremely high prices, and allows them to benefit if prices go down. |
If CMIP + Admin Fee + Profit Margin < Rate Cap, Price = CMIP + Admin Fee + Profit Margin
Otherwise, Price = Rate Cap Similar to Variable Rate, except a suitable Profit Margin is included to offset risk assumed by Company. |
| Pool Plan | Company offers their customers the Pool hourly spot rate plus a small service fee. | Price = POOL Spot Rate + Service Fee |
| Rebate Plan |
Company offers their customers a fixed percentage rebate (usually 50%) on the regulated Pool price.
Company purchases directly from an Electricity Generator on behalf of a customer. Company then sells back to Pool at the regulated 'buy' rate. The Utility delivers and resells the energy to the customer at the Pool regulated 'sales' rate. If Company has purchased the energy from the supplier at a price below the Pool market rate then the customer could also realize a benefit by getting a share of that savings. These benefits will usually be in the form of a check sent by your Company on a monthly basis. |
Price = POOLMIP
If EGMIP < POOLMIP, then customer receives a rebate as follows: Rebate = 50% * (POOLMIP – EGMIP) where EGMIP is Monthly Index Price of some Electricity Generator. |
| Fixed Volume Plan | A customer estimates their monthly consumption based on past years and any expansion plans. Company then contracts for that amount on the customer's behalf. The customer is financially responsible for differences between estimated and actual use bought for them on the spot market by the supplier. This spot market buying and selling happens for each hour by comparing actual consumption with the electricity purchased for that hour. |
If Volume < Fixed Volume,
Price = Fixed Rate
For any Volume that exceeds the Fixed Volume, Overflow Price = POOL Spot Rate |
| Declining Rate Plan | The rate declines each year of the contract. An example is a retail electricity contract that starts at 6.3 dollars for the first year, but declines to 5.9 dollars in year 2, 4.1 dollars in year 3, … and so on. |
Price = Declining Rate
where the Declining Rate declines each year. |
| Volume Discount Plan | A type of variable rate based on amount consumed over a monthly period. An example is a retail electricity contract that starts at 6.3 dollars for the first 100 MWh used, and drops to 5.9 dollars for use over 100 MWh in a month. |
If Monthly Volume < Fixed Volume,
Price = Fixed Rate
For any Monthly Volume that exceeds the Fixed Volume, Overflow Price = Reduced Rate |
| Hybrid Plan | Combination of fixed and variable rate. A portion of volume is charged at fixed rate, while the remainder is charged at variable rate. This has the effect of both protecting customer from high prices, and providing some benefit if prices decline. |
If Volume < Fixed Volume,
Price = Fixed Rate
For any Volume that exceeds the Fixed Volume, Overflow Price = CMIP + Admin Fee |
