Turkey lures investors

ETRM Energy Consultancy and Risk Management’s innovative solutions are paving the way to a more sustainable Turkish energy market


With energy demand increasing more than seven percent a year, Turkey offers a prosperous future for global energy market investors. Necessary steps to establish a liberalised market are being taken in a very decisive manner. As a result, the trade volume of the Turkish power exchange market is expected to exceed $5bn in 2011. Within two years, once the privatisation process is complete and an intra-day market is active, it is not unrealistic to expect the trade volume to triple.

The Turkish electricity market has already charmed large local and international companies such as Koc, Sabanci, Calik, Zorlu, Ciner, Aksa, E-on, AES, RWE, Statkraft, Cez, Verbund and OMV.

Turkey also has an established and competitive oil market. The biggest oil refinery in the Mediterranean region is in Turkey, and most international oil companies like Shell, BP, Lukoil, OMV and Total are active in the market. Moreover, Turkey enjoys a key strategic location: after pipeline projects such as Nabucco and SahDeniz are completed, the country will be an important player in the security of Europe’s natural gas supply.

Founded in 2010, ETRM Energy Consultancy and Risk Management (ETRM) is an Istanbul-based global energy consultancy company with a mission to “move Turkish energy companies one step further with the help of worldwide accepted solution partners.” Currently the company is working to provide solutions for smart grids, smart metering, and electricity trading risk-management practices. It has a strategic alliance with Wipro Ltd, an India-based global IT services consultancy; ETRM merges the domain experience of its local consultants with the global knowhow of Wipro.

Currently ETRM is set to help international clients engage with the Turkish energy market in matters of market fundamentals, company valuation, setting-up in the market, mergers and acquisitions, and corporate financing.

Integrated, localised solutions
Electricity grids all over the world are going through a period of transition into the era of the smart grid. All developed countries, as well as emerging ones, are handling the issue of grid improvements very carefully because of the importance of an efficient and effective grid as an infrastructural backbone. While they are allocating large budgets specifically for smart grid solutions, authorities are anxious to implement the best, most cost-effective solution.

Turkish energy companies are dealing with many challenges in their newly established market – and the hurdles will continue until the environment matures. Companies are aware that they are likely to need more than the decision support mechanisms they can develop in-house. On the other hand, they are sceptical about global best practices. The common concern is born from the possible complications that will be faced during adaptation of best practices to the Turkish market.

With this in mind, ETRM has placed itself a step ahead with its end-to-end distribution network technological solutions. The products and services package are composed of global best practices specifically re-designed for the Turkish market. Wipro played an essential role in defining the product’s solutions and system integration, and ETRM’s valuable domain experience ensured it was designed in line with the Turkish electricity market’s special dynamics and features.

Because understanding the many elements of a network is critical for choosing the correct field devices, identifying the best communication facilities and designing appropriate software, ETRM met with many distribution system operator field engineers and shaped its end-to-end utility solutions according to their feedback.

ETRM distribution solutions mainly respond to the needs of decreasing loss and theft ratios, power quality monitoring, improving network control capabilities, geographic information mapping and utility network modelling. ETRM can also support its customers in the development of a technological investments/smart grid roadmap, handling distributed generation, demand response, home automation networks and in-home display functions.

Trading assistance
High interest in the market triggered by increasing competition has exposed players to many kinds of risk. Due to the lack of necessary decision support mechanisms, companies have started to have difficulties while taking positions against highly volatile hourly loads and prices – and as portfolios get larger, even simple daily operations are becoming harder.

In partnership with OpenLink and IRM, ETRM provides essential solutions for participants in the Turkish electricity power exchange market. OpenLink is a worldwide industry leader in financial and energy trading and risk management software solutions. IRM is a subsidiary company of OpenLink, offering system solutions specifically tailored to the requirements of deregulated markets, supporting the operative business as well as strategic planning. Support includes structured procurement management (forecast, energy disposition, simple registration and handling of an increasing number of procurement flows including schedule and balancing group management), energy trading with portfolio/risk management (including complex risk and optimisation functionalities), and investment analysis and planning. In this context, ETRM intends to support its customers in day-ahead hourly load and price forecasting, forward curve generation, deal entry, deal capture, unit and portfolio optimisation, back office and reporting, middle office, maintenance planning, scenario and risk analysis, position support and scheduling.

Organisational improvement
A key requirement in differentiating and staying ahead of competition is to build a high performance organisation with an unwavering focus on operational excellence. This can be achieved by an effective business performance management framework around people, processes and technology. However, any such journey involves a paradigm shift in the current way of working and is fraught with certain challenges.

Effective handling of the necessary but often unpleasant change is essential for the success of the transformation. The right kind of partner and an effective and realistic roadmap is essential to ensure that the challenges associated with the change are addressed in a timely and appropriate manner.

ETRM believes that Business Process Analysis and Re-engineering (BPA and BPR) services can considerably improve operational efficiency and should be given priority in any Turkish energy company’s agenda. ETRM’s strategic partner Wipro has a consulting practice dedicated to business performance management, with more than 100 consultants focused on building high performance organisations through proven frameworks and methodologies. Wipro’s consultants with business performance management expertise have partnered with many Fortune 500 companies across multiple geographies in industries as varied as utilities, telecommunications and retail. The pool of senior consultants have extensive experience in consulting global customers in utility domain and an in-depth understanding of the industry and the challenges it faces. This coupled with a proven track record of helping customers achieve their business performance goals places Wipro in a unique position to enable value addition in processes across the utility value chain.

The key deliverables of a standard BPA/BPR service include As-Is business process maps, To-Be business process maps with applicable process attributes, role based job descriptions relevant for the processes in scope, cross industry and cross organisation Best Practices, identified opportunities for improvement, RACI matrix, KPI scorecard and a high level ‘Way Forward’ roadmap.

Importance of training
ETRM regularly organises comprehensive in-house training sessions for company staff and executives tailored to match the needs and aspirations of the Turkish energy market.

ETRM is a young company, but it has already developed several ‘to the point’ solutions for Turkish energy market players. The success of ETRM will not only benefit its shareholders, but also provide substantial contributions to its customers. These contributions will also help all stakeholders in the market to gain stability and sustainability. As Murat Kutlutürk, Managing Partner at ETRM explains, “We care about our customers, but we care much for our children. The solutions and services that ETRM provides are going to help to form a cost effective, more efficient thus more green future for Turkish energy market.”

CORRECTION: In World Finance May-June ETRM Energy Consultancy and Risk Management were listed as copyright holders of “Utility in a Box.” They do not hold copyright for this product. For more information Tel: +90 530 963 04 02; Email: Agah Hinc, ahinc@etrm.com.tr