Why do you think no-one has attempted to do this for free before?
Montel is somewhat unique in our approach to this, I agree! Since the founding of our company in 1989, providing transparency has been the fundamental principle running through the business. Back then, we were reporting on factors such as changing power outputs from generators, which affected prices across, what were then, newly liberalised energy markets. This time round, we’re trying to ensure market value in different ways.
Bilateral trading works for the established players, and they get what they need, but small players often trade outside the spreads because they simply don’t know what a fair price is. We aim to create a spread you can trust based on liquidity and transparency.
Until now, it’s been difficult to bring together enough trading parties to get a liquid market, but Montel is now in a position to do this, given our links with a lot of the market players. It can’t be underestimated how tough it is for these smaller players to find new trading partners either, so our other big hope for Montel Marketplace is to make trading easier for everyone.
So why launch this platform now?
Without wishing to state the obvious, the market has now developed to a point where there is sufficient demand for a platform like this. We had feedback from existing players and our clients saying this was needed in the context of the green transition and in response to schemes demanding the ability to show these certificates.
We also see the potential to establish a successful marketplace now as we expect developments in the renewable certificates market in the next 2-5 years, such as changes in the granularity of certificates – which are currently an annual submission - but could become daily or even hourly to be more accurate in their reflection of generation and consumption.
If and when that happens, we’ll be looking to make sure the platform can keep up, with plans to allow for automated trading, contract generation and trade recording via blockchain. From the user’s perspective, it would be as simple as setting a price and letting the platform do the rest.
We know that bringing all renewable certificate traders to Montel Marketplace could take time, so that’s why we’re in it for the long haul. As policy developments drive changes in the schemes, you can be sure we’ll be adapting the platform and implementing the latest technology to ensure we can continue making green markets more transparent.