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TRIPLE POINT TECHNOLOGY, INC. | TPT.COM
TRIPLE POINT BROCHURE
Commodity XL for Emissions
THE MOST COMPREHENSIVE SOLUTION FOR CO2, NOX, AND SO2 EMISSIONS TRADING,
RISK, AND INVENTORY MANAGEMENT
COMMODITY XL FOR POWER TRIPLE POINT TECHNOLOGY, INC. | 2
THE GLOBAL EMISSIONS MARKET
The Kyoto Protocol (Kyoto) is an international agreement linked to the United Nations Framework Convention on Climate Change that was negotiated in 1997 and ratified in 2005. Kyoto sets binding targets for 37 industrialized countries and the European community for reducing greenhouse gas (GHG) emissions. The goal of Kyoto participants is to collectively reduce emissions 5.2% below their 1990 levels by 2012.
The World’s Cap and Trade Markets
The European Union Emissions Trading Scheme (EU ETS) is the world’s largest greenhouse gas cap and trade market, seeing an annual turnover of around €90bn ($122.4B USD) in transaction value and over a billion tons of carbon dioxide. The EU is committed to maintaining its ETS, even if the Kyoto Protocol is not extended beyond 2012.
North America has weighed in with its own cap and trade emissions programs, including the Northeast’s Regional Greenhouse Gas Initiative (RGGI) and the U.S. and Canada’s Western Climate Initiative (WCI).
Market Challenges
Several market challenges are leveling increased pressure on organizations to effectively manage their carbon positions including political, economic, regulatory, and critical changes to auctioning; organizations are facing a substantial increase in carbon allowances that will be auctioned — from 10% to 60%. Instead of receiving free, government-issued allowances in a single tranche at the beginning of each year, organizations will have to bid for allowances in a series of
auctions held throughout the year. Different economic sectors will see varied proportions of allowances up for auction, but the power sector looks to be particularly hard hit — 100% of its allowances are to be auctioned.
THE REQUIREMENT FOR SOPHISTICATED EMISSIONS SOFTWARE
No matter which emissions scheme an organization falls under, its system for emissions trading must be able to meet all applicable requirements:
• Forecast GHG emissions aarising from commercialactivities
• Monitor emissions and repport to an authority for verification
• Coordinate trading and commpliance functions to ensure it has sufficient allowances tto meet emissions obligations
• Ensure emissions credits aare duly claimed and delivered
• Undertake active risk manaagement of Carbon positions, especially if participating inn a mandatory compliance scheme with a built-in “capp” on emissions
• Manage delivery of allowances and credits through the scheme’s logistical frammework, ensuring that delivery obligations are meet and security protocolsare in place to prevent thefft and abuse
• Ensure all business processses and safeguards are in place to meet financial andd trading regulations
Commodity XL for Emissions Overview
“ The power sector will be hit particularly hard with 100% of its allowances to be auctioned.”
TRIPLE POINT TECHNOLOGY, INC. | 3COMMODITY XL FOR POWER
TRIPLE POINT’S EMISSIONS SOLUTION
Failure to observe the rules of an emissions scheme, especially mandatory ones, can result in severe fi nancial penalties. Achieving profi tably at organizations has become more complex with multiple ‘What-if’ scenarios and contingencies to be considered.
Triple Point’s market-proven software for emissions provides a sophisticated multi-commodity trading system to factor carbon costs from fuel source and transmission methods. Organizations that forego implementing a comprehensive emissions solution risk watching profi t margins go up in smoke.
Commodity XL for Emissions
Commodity XL for Emissions™ handles the full scope of emissions trading and management across all regulatory and compliance schemes on a multi-commodity platform. The sophisticated and fl exible system supports corporate governance strategies in the ever-evolving emissions market.
COMMODITY XL DIFFERENTIATORS
Renewable Product SupportCommodity XL provides comprehensive support for
Renewable Products including Carbon Allowances,
forecasted carbon output in daily and hourly granularity,
SO2 and NOX with appropriate vintage year, and various
Renewable Energy Credits (RECs) including Solar, Wind,
and Geothermal.
Emission Trading and Tracking Commodity XL supports the trading and hedging of
emission allowances: OTC, RECS, and Carbon Financial
Instruments (CFIs); REC position management by
product and market; and SO2 position by Vintage year
and Account balances.
Emission Inventory ValuationsCommodity XL supports valuation methods including
Weighted Average, FIFO, and User Instructed, as well as
various Transfer Price methods: Market price, Contract
price, Contract price plus costs, and User instructed price.
Commodity XL™ tracks position by installation, business line, company, country, or any other hierarchical level enabling identifi cation of any shortfalls or surpluses in compliance position. This ensures timely and accurate reporting to regulatory bodies. Commodity XL provides What-if scenario analysis to optimize abatement strategies, fuel switching alternatives, and trading programs.
“ The market in greenhouse gas emissions could outstrip the conventional commodities markets to become the biggest traded commodity.”
— Bart Chilton, Commissioner, Commodity Futures Trading Commission
Commodity XL moves Credits in and out of Account at different Pricing Types, including Transfer Price or Contract Price plus Costs, etc.
TRIPLE POINT TECHNOLOGY, INC. | 4COMMODITY XL FOR POWER
Key Solution Features
• Ability to capture Registry informmation
at Country and State level
• Ability to set up Registry accounts by type;
user-defi ned or Registry operator
• Support for specifi c trade types of emissions
such as EUA, CER, ERU, and derrivative
instruments thereof (options/futures/swaps)
• Tracking the origin of allowances, whether
received as a free allocation, bought in an
auction, or bought on the open mmarket,
essential for accurate P&L reporting
• Ability to capture CER and ERU pproject ‘qualities,’
to ensure compliance with countterparty or exchang
delivery specifi cations
• Ability to model ‘delivery risk’ off Kyoto emissions
reductions projects, specifi callyy those associated
with CER and ERU credits
• More effi cient inventory manageement of allowances/
credits held in Registry Accounts, facilitating transfer
of allowances between Accountss
• An automated interface to National Registries to improve
account management, audit, andd security (dependent on
Registry operators publishing thhe relevant APIs)
Carbon trading has the potential to alter the operating cost of a power plant, with coal plants emitting more than twice the CO2 of a combined cycle gas turbine plant.
gee
View Position, PL, and Greeks with or without the Project Delta applied—with ability to provide Variable or Fixed Delta
CONCLUSION
Adding carbon trades to traditional factors such as fuel sources, demand profi les, logistics, and derivatives means that siloed applications and spreadsheets cannot hope to provide the infrastructure and transparency for strategic and proactive decision-making. Commodity XL for Emissions provides carbon market participants with sophisticated, scenario-based decision-support system to optimize alternatives and protect profi t margins.
Supported Regulatory Schemes
• EU Emissions Trading Scheme (EUTS)
• UK CRS Energy Effi ciency Scheme
• US Regional Greenhouse Gas Initiative (RGGI)
• Australia National Greenhouse and Energy Reporting Scheme (NGERS)
• California Climate Action Registry (CCAR)
• Canada GHG Emissions Trading Scheme
Supported Trade Types for CER, EUA, ERU
Commodity XL for Emissions supports the following trade types:
• CER, EUA, and ERU; Financial Option, Physical, Physical Option
• EU ETS EUA; Future, Listed Option, Swap
COMMODITY XL FOR POWER TRIPLE POINT TECHNOLOGY, INC. | 5
ABOUT TRIPLE POINT TECHNOLOGY, INC.
Triple Point is the leading provider of software for end-to-end Commodity Management. The global company provides innovative solutions to competitively address the complex commodities value chain: buying, selling, trading, and procurement; enterprise risk management; scheduling and logistics; storage; processing; and settlement and accounting. Triple Point’s Commodity Management platform enables over 260 customers in 35+ countries to profi tably manage exposure to energy and raw materials across industries including energy; metals; agriculture; transportation; shipping; consumer products (CP); discrete manufacturers; and big box retailers. Triple Point was named a ‘Leader’ in Gartner’s ETRM Magic Quadrant for its completeness of vision and ability to execute in 2009, 2010, and 2011. Founded in 1993, the company employs over 600 staff in 12 offi ces and support centers around the globe.
More information is available at www.tpt.com
How to Get Started
To learn how Triple Point’s Commodity XL software solutions can benefi t your supply, marketing, procurement, hedging or trading activities, please contact us at one of our offi ces below.
Corporate Headquarters
Triple Point Technology301 Riverside AvenueWestport, CT USA 06880Tel: +1.203.291.7979E-Mail: [email protected]
Houston
Triple Point Technology11200 Westheimer RoadSuite 705Houston, TX USA 77042Tel: +1.713.334.9339E-Mail: [email protected]
Parsippany
Triple Point Technology222 New RoadParsippany, NJ USA 07054Tel: +1.973.244.1661E-Mail: [email protected]
Europe, Middle East and Africa Headquarters
Triple Point Technology24 Chiswell Street6th FloorLondon EC1Y 4TYEnglandTel: +44 (0)20.7065.7650E-Mail: [email protected]
Cape Town
Triple Point Technology157 Dorp Street7600 StellenboschSouth AfricaTel: +27 21.883.8060E-Mail: [email protected]
Geneva
Triple Point TechnologyAvenue de la Gare 25BCH-1180 RolleSwitzerlandTel: +41 (0)21.825.5656E-Mail: [email protected]
São Paulo
Triple Point TechnologyNações Unidas Avenue, 14171, Floor 15São Paulo, SP 04794-000BrazilTel: +55.11.3568.2422E-Mail: [email protected]
Vienna
Triple Point TechnologyBabenbergerstrasse 9/181010 Vienna/AustriaTel: +43 18 9030 4090E-Mail: [email protected]
Asia-Pacifi c Headquarters
Triple Point TechnologyC 901 Pune IT ParkBhau Patil RoadPune, India 411 020Tel: +91.20.2582.1010E-Mail: [email protected]
Chennai
Triple Point TechnologyESPEE IT PARK, 7th FloorNo.5 North PhaseJawaharlal Nehru RoadEkkattuthangal, Chennai 600097Tel: +91.44.4217.7982E-Mail: [email protected]
Singapore
Triple Point Technology391B Orchard Road #23-01Ngee Ann City Tower BSingapore 238874Tel: +65.6832.5940E-Mail: [email protected]
Sydney
Triple Point TechnologyLevel 29, Chifl ey Tower2 Chifl ey SquareSydney, NSW 2000AustraliaE-Mail: [email protected]
