“Our own analyses and the information we get from our weather call influence our day-ahead trading. At noon, we deliver our quantities and the prices at which we want to sell our electricity to the power exchange," explains Julia. The exchange matches the quantities and prices and about an hour later, Julia learns what prices were realized for her bids. The schedule is then sent to the TSOs. The schedules provide information on how much power the plants managed by Next Kraftwerke will feed into the grid at what hour of the next day.
Power Trading at 15-minute Intervals
Intraday trading for the next day starts at 3 p.m. and power trading picks up speed once again. In contrast to day-ahead trading, electricity on the intraday market can additionally be bought or sold every 15 minutes. This poses a challenge for energy traders: They now have to keep abreast of all sudden developments that could have a direct impact on the market and prices. The team checks load data, electricity consumption, price overviews, information about regional feed-in and, of course, live data from the networked plants. Analytical skills are now as much important to the job as the ability to recognize regularities and patterns from a multitude of data and sources in order to draw conclusions and make decisions. "The situation is not always absolutely clear in this process. That's why we have to be able to make decisions even if the current situation is riddled with uncertainty. You can also be wrong with your decisions, but the tide usually turns again the next day," says Julia.
Outage reports, for example, inform about where power plants or interconnectors are currently down. "If such a cross-border interconnector between countries fails, no power can be shifted back and forth between the affected countries. This has an immediate impact on liquidity and energy prices in the countries involved," explains Julia, whose job description it is to trade electricity for France, the Netherlands and Belgium.
Reliable weather forecasts play an important role in intraday activities, too. "Our forecasts are very good, but of course unexpected weather conditions can occur in some regions during the day. We are then challenged to anticipate the last thundercloud and act accordingly," says Julia. But not every phenomenon can be predicted: "No one had the impact of Saharan dust on their radar years ago. Everyone wondered why PV feed-in was so low despite the nice weather," the energy trader reports.
The Basic Story as a Guideline for Energy Trading Activities
A little screenplay for energy trading, that's how you can imagine the basic story: Julia searches a variety of data sources for the most important key drivers. She uses them to develop a kind of basic story that determines her actions on the power exchange and helps her to find the fair market price. “Currently, the biggest influencing factors and thus the basic story have been determined: we have a lot of sun and heat and, due to the Ukraine war, an energy shortage,” Julia explains. Changes in the forecast immediately lead to large price effects. As a result, Next Kraftwerke and other traders have to react quickly. For Julia, it is now important to be faster than the competition in order to achieve the best price.
Currently the market situation is particularly challenging for traders: during prolonged periods of heat, the likelihood increases that nuclear power plants will have to be throttled or even shut down. This can have two reasons: Firstly, there is no longer enough cooling water due to falling river levels. Secondly, nuclear plants are not allowed to discharge cooling water back into the rivers to prevent them from heating up even more. “In this case, we have to monitor the market particularly well in order to be able to respond to unexpected needs of the grid operator. In this way, we support the stability of the electricity grid,” Julia explains her job.