Battery energy storage systems are becoming a cornerstone of Germany’s energy transition. We explore the financial opportunities and risks in Germany’s wholesale and balancing markets.
Confessions of an Energy Trader
This energy blog is written by the FlexPower collective. We are traders and engineers sharing our perspectives on the energy market. While we may show you some neat analysis and correct grammar here and there, we will treat this mainly as a quick&dirty view of the facts as we see them. We have no claim to final truths but want to throw you some interesting facts and opinions to start a discussion. Feel free to engage and be controversial. However, please: keep calm and civil. It's only words.
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About the confessor
Since December 1, 2024, the Hamburg-based power trader CFP FlexPower GmbH has been responsible for the dynamic procurement of electricity for Bremen’s Überseeinsel. The Überseeinsel urban development project is part of Bremen’s Überseestadt district and is creating a new residential and business quarter on 16 hectares.
Electricity (cross-product) price volatility has historically been closely linked to overall price levels. This trend seems to have ended in 2024 in Germany, as low marginal cost renewables are pushing the overall wholesale price level down, while peakers such as gas and batteries need to finance their investments in relatively few but increasingly expensive production hours
This blog post is the third in a series of articles about hedging price volatility using standard shapes such as wind and PV, as well as more novel and somewhat non-standard ones, such as the FlexHL (Battery). While the first two articles were explainers for consumers, this one is for suppliers who are looking to sell their flexibility, i.e. BESS owners.
In recent years, if you’re involved in the power sector, you’ve likely come across discussions about Power Purchase Agreements (PPAs). Some consider them a cure-all for advancing the energy transition, and we, too, recognize their crucial role. However, it’s essential to grasp that a PPA is essentially a contract for buying or selling power, without specifying the type.
Over the last year we became increasingly involved with the “science” of modelling past and future revenues of battery energy storage systems (BESS) and now decided to shed some light on this practice. We believe that customers are being sold a lot of voodoo for science and that the incentives in this industry are not at all well aligned.
Cooperation between trawa and FlexPower Enables Companies to Easily Transition to Renewable Energies
Next-generation energy provider trawa and Hamburg-based electricity trader FlexPower have entered into a long-term partnership. This collaboration allows businesses of all sizes to source renewable energy easily and cost-effectively. Utilizing Artificial Intelligence (AI), trawa develops an optimized power procurement strategy based on historical consumption and current market data, aiming to reduce emissions and costs. As a market partner, FlexPower provides the necessary market access through its own electricity trading and a platform for Power Purchase Agreements (PPA) with renewable energy facilities to implement the optimized power procurement.
In recent years, if you’re involved in the power sector, you’ve likely come across discussions about Power Purchase Agreements (PPAs). Some consider them a cure-all for advancing the energy transition, and we, too, recognize their crucial role. However, it’s essential to grasp that a PPA is essentially a contract for buying or selling power, without specifying the type.
The question of proactive balancing group management to support the electricity system has been a hotly debated topic in German electricity trading for years. Should balancing responsible parties – as in many other European countries – also be allowed to support the system in Germany through deliberate imbalances in their portfolios or not? FlexPower discusses the results of a new study on this topic with the author, Prof. Dr. Lion Hirth from NEON Neue Energieökonomik.
We are often asked how the financial optimization (or: arbitrage) of a battery across the different market places of the spot market works. We show this x-market optimization here by way of example focusing on the day-ahead spot market (hourly auction at 12 noon), intraday quarter-hourly auction (at 3 p.m.) and the so-called intraday continuous market (quarter-hourly products up to five minutes before delivery).
Shutting off green and cheap renewable energy is a counterintuitive practice that has been widely discussed and usually criticized in the past. We will use this blog to shed light on the business logic of economic renewable curtailment in order to structure the logic behind a debate that has been the cause of torn out hairs in many companies including our own.
After an extensive test phase, Hamburg-based power trader FLEXPOWER has launched a self-developed platform for the conclusion of Power Purchase Agreements (PPAs). On PowerMatch, power consumers and power producers can now view prices for the purchase or sale of renewable energy power live and in a transparent way.
Shutting off green and cheap renewable energy is a counterintuitive practice that has been widely discussed and usually criticized in the past. We will use this blog to shed light on the business logic of economic renewable curtailment in order to structure the logic behind a debate that has been the cause of torn out hairs in many companies including our own.
The German government plans to introduce a price cap (essentially a tax) for energy producers. This will likely lead to the curtailment of valuable green energy production at times of positive prices (worst case). Best case it will introduce a minimum price floor in markets exactly at the level of the marginal tax rate.
About the author
Master of Camouflage
Flex trading is the new energy trading! That’s our motto — because the cheaper renewable power becomes, the more important (and profitable) it gets to fill the gaps left by solar and wind.
That’s why we focus on meeting the ever shifting needs of customers and markets. For us, flexibility isn’t just a technical term – it’s at the heart of what we do and key to long-term success.
In a nutshell, flexibility on energy markets is what this energy blog is all about.
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