Why it’s time for GO businesses to invest in the Mid-Office
As the world’s demand for green energy rises, the European Guarantee of Origin (GO) markets are entering a new stage of rapid growth and volatility. Complexity is rising: more certificates, greater specificity, and the push for granularity.
Industry-wide pain points in the mid-office
If we take a look at what happens after certificate trades are made, there are risks to growth on the operations side. According to our proprietary research, many GO businesses are experiencing common pain points in the mid-office.
Manual processing and settlement tasks associated with GO trades are rapidly growing in both volume and complexity. If left unaddressed, these inefficient mid-office processes can act as a traffic jam, collectively slowing us down. Manual processing is also unscalable from a cost standpoint and threatens to push settlement costs much higher.
The business risks are significant. The consequences of slow and tedious manual processing, patched-together internal systems, and even possible human error are larger than ever before. Professional risk management solutions for GOs are needed.
In today’s volatile markets, price movements coupled with increased trade frequency and complexity can lead to severe consequences such as inventory loss, certificate wastage, missed opportunities, and underutilized capital.
Stresses on the mid-office
Attention is often focused on the front-office and revenue maximization. However, the role of the mid-office deserves more attention, especially as the European Guarantee of Origin market undergoes transformation.
With so much responsibility resting on the operation team’s shoulders, they need to work long hours to coordinate communication, manage information across various platforms, and examine inventory.
When the market was still in its developmental stages, Operations Specialists in the mid-office could make do with general-purpose tools like Excel, or “modifying” an ETRM to do the job. Both options fail to adequately reflect the complexity of EACs today.
Especially during the end of the compliance period, operations teams are under extreme pressure and work overtime for weeks on end. It’s an untenable situation, especially in a tight labor market. Significant business risks of overworked teams include errors like possible losses and a failure to shift valuable inventory.
The only way to scale renewable energy certificates is with automation
On a macro level, for the European Guarantee of Origin industry to continue on its current growth path, automation must play a bigger role in introducing standards.
On a micro level, for GO businesses, investing in workflow automation is a strategic choice that can enable them to handle greater capacity for certificates generated from green energy sources.
Since the entire industry is still characterized by highly-manual processes, early adopters can gain a significant edge over their competitors by embracing workflow automation now.
The GO market has long outgrown manual management tools, and a platform designed specifically to facilitate GO processing is long overdue.
The solution: workflow automation
Workflow automation has matured in other markets, yet the high degree of complexity and customization – and the lack of a robust solution – have caused many European GO businesses to develop their systems internally.
But their business focus is on producing or trading renewable energy, and not necessarily on software development.
The result is that while in-house systems often exist to manage portfolios and perform tasks, the industry lacks a uniform solution that enables companies to manage transactions after they’ve occurred.
New technologies are emerging that can enable you to get deeper insights into your portfolio more quickly.
How to solve key challenges with CerQlar
If we switch to solution mode, how can companies solve these problems within a short timeframe? Of course, every business that uses Environmental Attribute Certificates has its own unique set of challenges that require complex solutions.
Yet there is one common denominator that can help businesses right now increase both their processing capacity and efficiency – technology.
Workflow automation can solve pain points, and lay the necessary foundation for growth. CerQlar is the first Saas workflow solution designed for the GO markets.
CerQlar was purpose-designed to make processing GO trades more efficient. CerQlar enables teams to collaboratively manage GO certificate trades, contracts, and inventory — all on one easy-to-use platform — from trade capture through invoicing.