GE Power aims to connect its platform with energy trading player PowerCosts

What happens when the industrial Internet and machine-to-machine connections meets energy trading? GE Power and its Predix platform are about to find out.

GE Power will partner with PowerCosts Inc. (PCI) to tie machine-to-machine data within utilities to energy trading systems.

The collaboration, part of a broader push by GE to build an ecosystem for its Predix Internet of Things software, will connect GE's Digital Power Plant application with PCI's suite of energy planning and trading tools.

GE and PCI are currently working with joint customers and plan to roll out the integration in early fiscal 2017.

PCI's software is used in more than half of the energy trading transactions in the US. According to the companies, GE will offer PCI's suite within its Predix platform. PCI's software covers optimization and analytics, trading, energy accounting, asset operations, business intelligence, and data warehousing. By working with GE, PCI will also get exposure to international markets.

Here's a look at the energy trading food chain where PCI plays a role in the middle.

energy-trading-diagram.png

According to GE and PCI, the aim is to integrate asset management and operations data with bidding and billing systems. The general idea is that energy trading processes will be automated based on machine and fleet performance. Data such as historical data, real-time performance, and weather will be incorporated into trading models.

More: GE Digital builds up its global presence with acquisitions, partnerships | GE Power lands Exelon as Predix customer, co-innovation partner | GE releases new suite of Predix applications, services

If successful, energy production and operations will be connected to the commercial side of the business. Energy traders will be able to better plan for future and real-time bidding.

Jay Allardyce, chief operating officer of GE Power Digital, said in an interview that the PCI partnership is complementary. GE's Predix platform focuses on asset performance and fleet management where PCI is more of a portfolio level tool.

The two software platforms combined can turn power assets into growth engines as excess capacity can be sold on the open market. "We're taking real time streaming asset information from machines and turning them into trades," said Allardyce. "GE historically has saved money at plants, but now we'll be able to address the other side of the equation to make money."

David Nilsson, vice president of solutions and strategy at PCI, explained that there are hundreds of ways to trade energy relative to a stock, which primarily relies on market and limit orders. Meanwhile, energy markets operate in 15 minute increments.

Traditionally, an energy trade would revolve around a plant manager who had to be conservative with a trade. In a 500 megawatt trade, a company may decide to conservatively sell 480 megawatts. With more granular data from GE, Nilsson said perhaps that trade would be pushed up to 495 megawatts. With additional data, energy companies can also trade around outages, he added.

"Energy companies would traditionally leave money on the table," said Nilsson, who added that the GE collaboration will be helpful as companies increasingly operate on renewable energy.

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