# ETRM Source: https://ordergroup.co/glossary/etrm/ Last updated: 2026-10-10 > ETRM explained for software buyers: what an energy trading and risk management system does, how it differs from a trading platform and what REMIT requires. [Energy](https://ordergroup.co/glossary/energy/) 4 min read # ETRM Energy trading and risk management Also known as: energy trading and risk management Definition Energy trading and risk management (ETRM) is the category of software that records energy trades and manages the resulting positions, risk, profit and loss and settlement for companies that buy and sell power, gas or other energy commodities. Cite this entry Text "ETRM". Order Group, Software glossary, 10 October 2026. https://ordergroup.co/glossary/etrm/ HTML `ETRM - Order Group` Reviewed by [Paweł Zieliński](https://ordergroup.co/authors/pawel-zielinski/), Co-founder & Business Owner Last reviewed 10 October 2026 ## How ETRM works An ETRM system is the book of record of an energy trading business. Traders agree deals on exchanges, through brokers or bilaterally; the ETRM records each deal and tells the company what it owns, what it owes, what the portfolio is worth today and how much it could lose. It covers power and gas, and often emissions allowances, [guarantees of origin](https://ordergroup.co/glossary/guarantees-of-origin/) and fuels. The work is usually split the way a bank splits it: - Front office. Trade capture: every deal is entered with its product, delivery period, volume, price and counterparty, whether it came from an exchange, a broker or a long-term contract such as a [PPA](https://ordergroup.co/glossary/ppa/). - Middle office. Position and risk: open position per commodity, market and delivery period, valuation against current market prices (mark to market), profit and loss, credit exposure to each counterparty and limits that the trading desk must stay within. - Back office. Operations and money: nominations and schedules for the grid or pipeline operator, confirmations, settlement, invoicing and the data for regulatory reports. Energy is harder to book than most commodities. A power contract delivers a volume in every period of the delivery window, so one annual baseload deal becomes about 35,000 quarter-hours, and since October 1, 2025 the European [day-ahead market](https://ordergroup.co/glossary/day-ahead-market/) uses 15-minute periods. Physical delivery has to match what was traded, or the imbalance is settled at a price nobody chose. ETRM and neighboring systems SystemMain jobMain users ETRMTrade capture, position, risk, P&L, settlementRisk, middle office, back office, financeTrading platformMarket access and order executionTraders and dispatchersProcurement platformBuying strategy, tranche purchases and tenders for an energy consumerEnergy buyers and their advisorsERP or accountingInvoices, payments and the general ledgerFinance ## What ETRM means for your software Most companies do not build an ETRM. They buy one and build the systems around it: customer portals, trading tools, procurement apps, reporting. The ETRM stays the source of truth, and the integration design decides whether the new system helps or creates a second, inconsistent book. Requirements worth writing into the specification: - One owner for each piece of data. Contracts, positions, product catalogs and prices come from the ETRM; the new system keeps a local copy for speed and synchronizes it on a schedule, and the specification says which side wins after a conflict. - Trades are written once. A deal entered in a portal must reach the ETRM exactly once, even when the network fails halfway. That needs idempotent writes, a status per transaction and a reconciliation report. - The whole lifecycle is modeled. Orders get accepted, rejected, amended and canceled, sometimes after the client has already confirmed. Every state change has to be reflected in the ETRM, including withdrawals. - Trading rules come from the ETRM. Which products a user may buy, in what ranges and in what volume steps should be read from the ETRM, not copied into the new system's code. - Time resolution is consistent. Prices, positions and consumption at 15-minute, hourly and monthly resolution must convert without rounding gaps, and daylight saving days have 92 or 100 quarter-hours. - Every change has an audit trail: who entered or changed which deal, when and why. Risk teams and regulators ask for it. Writing the specification? Add ETRM to your requirements checklist Collect the terms your project touches and get their system requirements in one e-mail, ready for an RFP. ## Rules and standards The main EU rule for wholesale energy trading is REMIT, Regulation (EU) No 1227/2011. Article 8 requires market participants to report to ACER the transactions they conclude in wholesale energy products, including orders to trade, and Commission Implementing Regulation (EU) No 1348/2014 sets out what must be reported and in which format. REMIT II, Regulation (EU) 2024/1106, entered into force on May 7, 2024. It widened the scope of the rules, tightened reporting and strengthened supervision. The data for these reports lives in the ETRM, so reports have to be produced from trade data, completely and on time, rather than assembled by hand. When a portal or trading tool creates deals, its records must be complete enough for the ETRM to report them. ## From our projects We have not built an ETRM. We build software that works next to one and with the data an ETRM holds. Since mid-2026 we have been building a purchasing portal for the business customers of an energy company, integrated with its ETRM and its accounting system. The opening workshop with the client took place on July 29, 2026. The ETRM API client was finished in September 2026. As of October 2026 the team is working on three parts. Local models of contracts, contract position, tranches and consumption synchronize with the ETRM on a schedule. A catalog of instruments gets its prices synchronized automatically. In a tranche purchase the customer places an order, a trader accepts it and the transaction is written to the ETRM. A trader can also cancel a transaction after the customer has confirmed it, and the transaction is then withdrawn from the ETRM. Volume steps follow the rules defined in the ETRM. Since 2020 we have built [Enerace.Online](https://ordergroup.co/case-studies/enerace-energy-trading-software/) for Enerace, an advisory that helps companies buy electricity and gas. It is a procurement platform rather than an ETRM, but it does part of the same job for the buyer: it calculates each client's portfolio position from the contracts entered, which replaced spreadsheet calculations, and records tranche purchases in MW or MWh as a percentage of contract volume. ## Related terms - [Day-ahead market](https://ordergroup.co/glossary/day-ahead-market/) The day-ahead market is a daily auction in which electricity for each 15-minute period of the next day is bought and sold. In Europe orders close at 12:00 CET and one algorithm sets prices for all coupled bidding zones. - [Energy procurement](https://ordergroup.co/glossary/energy-procurement/) Energy procurement is how a business buys the electricity and gas it consumes: choosing a contract model, fixing prices through tranches or supplier tenders, and checking the resulting cost, risk and invoices against a budget. - [Guarantees of origin](https://ordergroup.co/glossary/guarantees-of-origin/) A guarantee of origin (GoO) is an electronic certificate, with a standard size of 1 MWh, that proves to a final customer that a given quantity of energy was produced from renewable sources. It is issued, transferred and canceled in a national registry and traded separately from the energy. - [PPA](https://ordergroup.co/glossary/ppa/) Power purchase agreement A PPA (power purchase agreement) is a contract under which a buyer agrees to purchase electricity directly from a producer on market terms, usually for several years and often from a named wind or solar plant. ## Read more on the blog - Article [Energy Trading Platforms: How They Work, Main Types and the Software Behind Them](https://ordergroup.co/blog/energy-trading-platforms/) ## Sources 1. [Regulation (EU) No 1227/2011 on wholesale energy market integrity and transparency (REMIT), Article 8](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32011R1227) - EUR-Lex 2. [Regulation (EU) 2024/1106 amending Regulations (EU) No 1227/2011 and (EU) 2019/942 (REMIT II)](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32024R1106) - EUR-Lex 3. [Commission Implementing Regulation (EU) No 1348/2014 on data reporting implementing Article 8(2) and Article 8(6) of REMIT](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32014R1348) - EUR-Lex Paweł Zieliński reviewed this entry. Ask how it applies to your project. [Ask an engineer](https://ordergroup.co/contact-us/) ## FAQ ![Paweł Zieliński](https://ordergroup.co/media/images/Pawel_p3bY6z4.format-webp.webp) Paweł Zieliński Co-founder & Business Owner [Talk to an engineer](https://ordergroup.co/contact-us/) ### What is the difference between ETRM and an energy trading platform? A trading platform gives access to markets and executes orders. An ETRM records the resulting trades and manages position, risk, P&L and settlement. Large trading companies run both, and the platform sends its fills to the ETRM. ### Do I need an ETRM if my company only buys energy? Usually not a full one. A large consumer needs to track its contracts, open position and purchase tranches, which a procurement platform or an advisor's tool can do. A full ETRM pays off when you trade actively, hold positions in several markets or report under REMIT as a market participant. ### Should we build an ETRM or integrate with one? Most companies integrate. Trade capture, valuation and settlement are well covered by existing products, and rebuilding them is expensive. Custom work pays off around the ETRM: client portals, trading tools, reporting and integrations with exchanges, meters and accounting. ### What does REMIT require from an ETRM? REMIT requires market participants to report wholesale energy transactions and orders to ACER. The ETRM holds the data for those reports, so its records must be complete, consistent with exchange and broker data, and available for reporting within the deadlines. Building a system that depends on ETRM? See how we build software for this domain, with case studies and the stack we use. [See Energy Hub](https://ordergroup.co/energy-hub/) Requirements checklist For each term we send the definition and what it requires from your software. Free, no sales call needed. Your checklist is empty. Use the plus next to a term to add it.