The Renewable Picture
Historical power generation has been derived from predictable, consistent, carbon-based sources while renewable generation creates a new layer of variability for reliance. As a result, many business unit transactions flow in 5-minute increments instead of at the historical one-hour levels. This transition along with the unpredictability of renewable sources has created a significant increase in data volumes and operational complexity. Mike Prickett of MCG Energy Solutions encapsulates this predicament with an anecdote. “Recently, Southwest Power Pool (SPP) hit a renewable penetration record of 86 percent,” he says, hinting at the dip in wholesale power prices as a result. Companies in this space have a countable number of avenues to save money, let alone achieve greater profitability as this transition occurs. While some are pivoting more heavily into renewables, as Prickett describes it, for others, there are very few places power companies can cut costs; they can neither compromise on the workforce nor the operational capabilities of the plant and lines. And more importantly, traditional utility providers and traders are starved of the data needed to make actionable decisions that translate to fruitful revenue streams.
“As a result, companies dealing in power and gas are also looking internally to assess their cost of system ownership, both for maintenance and necessary modifications,” explains Prickett, who serves as the CEO of MCG Energy Solutions. As an organization that delivers industry-leading software to enhance efficiency and productivity of power and gas workflows, MCG Energy is precisely positioned to help companies overhaul the quality of their power operations while eliminating unnecessary complexities and multiple integration points between third-party vendors. This single-vendor approach creates both efficient implementations and lower exposure of gaps for the company to cover themselves. Notably, MCG aims to create a landscape with high-quality power operations driven by a risk system of the right size and price, allowing clients to pay only for the functions they genuinely use within their operational workflows.
Infusing Operational Efficiency through Simplicity
As a company that upholds utility over sophistication, MCG Energy Solutions offers software-driven solutions for various business operations. Engineering reliable software for energy accounting, trading, scheduling, and transmission functions, MCG infuses operational efficiency into the front, middle, and back-office business verticals.
A single-vendor approach creates both efficient, cost-effective implementations and lower risk exposure of gaps for a user to cover
“From its early years, our energy product suite was developed in the cloud,” says Brenda Huebsch, CFO, MCG Energy Solutions. “100% of our R&D goes into the power/energy space to stay ahead of the evolving market. From REC modules for allocations and trading to DER aggregation and management, our systems have the functionality toward which our customers want to go. It also means we don’t try to retrofit functions that our clients need because they all natively operate from MCG’s private, highly certified (NIST, GDPR, etc) cloud environment. From Day 1 both the operational functionality of the application and the security of the entire system landscape including all its data were architected, engineered and built to be highly-effective and user-friendly as a hosted solution.” MCG has crafted a comprehensive suite of use-case specific energy functions such as its Paragon Energy Risk Management (ERM) system, Paragon Credit Risk Manager (CRM) system, Integrated Asset Manager (IAM), Energy Accounting System (EAS), Outage Management System (OMS) and Operator log, Hosted Data Services (HDS), Control Area Scheduling (CAS), and the Innotap Data Suite (IDS), all of which form an ecosystem for any business wanting to operate in the power and gas space today. These feature sets, owing to their cloud-based architecture, significantly reduces internal IT expenditures and complexities.
Created in the Cloud
MCG’s cloud-native architecture offers not one but many benefits to the clients including its cost of ownership. Prickett narrates an interesting story that substantiates this value proposition.
“MCG built its power operating systems organically over a period of 15 years. During that time, we identified an opportunity to expand into risk management and financial analytics within our target market. While the vast majority of customers have a defined risk policy, very few had implemented any systemic risk controls. The reason for this in most cases is a series of limitations, including limited needs, limited budget, and lack of internal IT resources necessary to manage an ETRM” he says. During that time, Prickett was hoping to acquire a cloud-ready risk management platform, which had its roots in the energy sector. Paragon—a platform that uniquely served power, gas, and liquid fuel clients—appealed to Prickett, as it was solely focused on energy, bearing close resemblance to MCG itself. The platform could easily be moved to the MCG cloud, providing energy clients with all the necessary financial and operational capabilities at the right price. This nimble architecture dramatically reduces the cost of ownership while ensuring that clients only choose (and pay for) the functionality they needas well as create a fully-integrated solution to create efficiency for the client.
MCG’s solutions are uniquely positioned and tailored to the energy sector, closely aligned with the needs of power companies. One functional element of their Risk Solution that exemplifies these traits is the company’s trade capture module. This module is natively-integrated with MCG’s IAM for physical and financial trading of power, gas, LNG, etc. allowing for automatic data upload. This one-stop solution can include gateways to ICE interfaces as well as ISO and pipeline trading and scheduling.
The SaaS-based platform also ensures recurring revenue for MCG, while providing clients the flexibility to avoid expensive, perpetual product licenses if they choose; MCG conducts many implementations with zero upfront cost. As a result of this versatile business model, MCG could carry out newer engagements with clients and prospects during the pandemic, undeterred by the disruptions caused to the world economy. The CEO says that the pandemic affected MCG’s business positively, as procurement processes were impacted for clients, requiring faster resolutions. Consequently, the COVID-19 pandemic also fast-tracked digitalization efforts across the energy ecosystem accelerated by the decarbonization efforts around the world. MCG capitalized on this predicament, helping clients in reducing the risk posture of their current environment.
Actualizing Power Generation
Another key takeaway from the pandemic, as observed by Prickett, is the surge of Requests for Proposals (RFPs). More often than not, this influx of RFPs (sometimes for multiple products within a single RFP), aided companies as they looked to expand functionality with existing reliable vendors and to simplify existing processes. Be it front, middle or back-office functions, the MCG solutions can provide the complex functionality needed to operate in the electricity space that others may not be able to accommodate. MCG’s data-driven solutions are poised to mitigate these challenges, serving as a conduit for executing in this complex market. Prickett says that MCG aspires to complement these solutions with advanced analytics, thereby bringing multiple RFPs under a single roof.
Additionally, MCG’s cost allocation engine functions as a critical element in fully settling Distributed Energy Sources (DERs) with the relevant stakeholders that constitute the integrated power generation spectrum. Contextually, aggregating multiple DERs into a single unit and presenting it to the market becomes a challenging endeavor for stakeholders, owing to the financial complexities associated with the venture. MCG is already prepared to manage DERs in the ISO markets today (when the marketplace enables them), offering the functionality as an extension to its Energy Risk Management platform.
With all of these functionalities put together in a nimble and utilitarian package, MCG offers clients the resilience of data-driven technologies and empowers them to reap the rewards of intelligent insights that invigorate revenue streams. “Data is the new oil, and we are planning to couple it with advanced analytics to ensure that our solutions blanket multiple client requirements for the future,” concludes Prickett.