VEST Energy, a new energy trading company, has been launched to fill the gap between start-ups and less dynamic large trading companies.
The company was launched at the end of July by Aaron Lally, who has previously held positions at Kiwi Power, AI Power Trading and Mercuria Energy Trading.
Thanks to funding from CF Partners, the company can avoid many of the financing and scaling challenges seen by start-ups, while also benefitting from advanced software that gives it a dynamism existing trading houses lack.
VEST will use machine learning algorithms to predict energy prices, using a hybrid model that combines reliably informed artificial neural networks and fuzzy logic. This will allow the company to take advantage of high and low energy prices, choosing when to dispatch power from renewables and energy storage.
Lally has been using the algorithms for the last decade in the power markets across Europe. Speaking to Current±, he said: “There's two real aspects to it, there's the price predictions side of it, where we use machine learning and then there's a dispatch and operational side which we call it trading automation, where you automate everything around what a trader is required to do, purely because the asset has to react so quickly.
“Also it reduces the workload on the trader as they don't have to go around manually trading things for each asset, we have that automatically plugged into our price prediction model. If our model changes, we can say ‘ok, we believe the price is now going to be higher in a few settlement periods time’, and without the trader actually doing anything but overseeing the process, we will then be able to dispatch the assets at the correct time for the highest price.”
With the growth of unsubsidised renewables in the UK, as well as energy storage coming out of Enhanced Frequency Response contracts, the country is “ripe for this type of product”, he continued.
Currently, VEST is focusing on registering assets, speaking to clients and signing commercial agreements. Already, there are plans to roll it out in Europe in the coming years, in particular Ireland, Italy and Portugal.