A PPA for sustainable concepts
For over 20 years, Windkraft Simonsfeld has been active in the renewable energy sector, overseeing a broad portfolio of wind farms in Austria, a wind farm in Bulgaria, and a solar park in Slovakia. But it was Windkraft Simonsfeld’s longevity that created a new challenge for the company in 2016.
“Subsidies last 13 years in Austria, and in 2016, an 18-megawatt park became ineligible for an active subsidy,” explains Markus Winter, chief technical officer of Windkraft Simonsfeld. “To continue commercial operations at this facility, we looked for a partner who knew the field and could run an asset profitably without a subsidy. We also wanted work with a provider operating with 100 percent renewable energy, like us. That’s why we chose to sign a power purchase agreement (PPA) with Next Kraftwerke to diversify the risks.”
To reduce the commercial risk, Windkraft Simonsfeld sells the energy it produces in tranches. “We decided to place the energy produced on different markets to protect ourselves from an array of different scenarios. This lets us avoid the risk of selling energy at the wrong time. We spread the risk and get good average prices. Beyond that, we can use information from the markets and from Next Kraftwerke to identify positive price developments and sell energy at the best time. We can lock in suitable trading products through Next Kraftwerke up to two weeks before the actual energy trade is made and can thus determine our own trading strategy,” said Winter describing Windkraft Simonsfeld’s commercial concept.
While part of the energy is sold at an annual price on the futures market, another part is sold at a fixed quarterly price. However, at least 25 percent of the energy produced is sold by Next Kraftwerke traders on short-term spot markets. “While we decide on the macro strategy, Next Kraftwerke has complete control of the actual trading of our generated power. The assets are connected to the Virtual Power Plant and the energy is placed by the traders on the short-term spot markets.” Many different trading strategies and elaborate forecasts help the customer to get the best price. When market prices are negative, the wind turbines can easily be curtailed with a simple command from Next Kraftwerke headquarters in Cologne.
For Windkraft Simonsfeld, connecting to the Virtual Power Plant does not require a dedicated Next Box. “Communication with our assets is conducted over a protocol interface. Linking the systems went off without a hitch. Next Kraftwerke’s technicians were in touch with our IT department and the link was up and running after a quick software update,” adds Winter. Proof of origin is providing an additional source of income from the assets. Part of the power generated by Simonsfeld facilities is sold directly to consumers who have indicated a preference for verified green energy from ecological installations. Another case in point to why Windkraft Simonsfeld is not only a pioneer in generating power from renewable sources, but also a leading example of how green energy is commercially viable without subsidies.
Facts & Figures
|Product:||PPA based trading concept|
|Link to partner website:||More about the Windkraft Simonsfeld AG|
|Implemented products:||Individual PPA commercial concept without subsidies|