The enwex index presents 24 values per day for solar and wind based on the projected utilization of both technologies, thus providing a reliable basis for the daily calculation of market values for solar and wind power for the first time. In addition, enwex offers an hourly temperature index that allows for pricing and hedging weather influences on commodity prices.
Meteorologist Robin Girmes, founder of Energy Weather GmbH and energy industry veteran, developed the index. It is available for free and is updated daily at https://enwex.com/.
While weather indices for individual market areas and specific generation technologies were either non-existent or lacked transparency in their calculation, enwex now relies on a comprehensible, publicly documented methodology based on the widely used weather model of the European Centre for Medium-Range Weather Forecasts (ECMWF).
The three enwex indices for solar, wind, and temperature offer the possibility of settling tradable weather derivatives in a manner similar to baseload contracts (daily settlement). The suite of derivatives enables the hedging of volume and price risks, which are essential, especially in the financing of renewable energy facilities through Power Purchase Agreements (PPAs). More than 70 market participants have already expressed their intention to transact and trade on enwex-based products.
Robin Girmes sees the new weather index as offering "various hedging opportunities due to the complete standardization of weather data, for example, with regard to cannibalization effects of renewables." Girmes adds, "The price settlement below the generation costs of power plants now has a fundamental alternative calculation with the enwex indices."
The first user of the Energy Weather Index is the Hamburg-based power trading house CF Flex Power (FlexPower) in cooperation with CF Partners. The two trading companies utilize the enwex index suite to collectively manage PPA risks and provide their customers with access to this market through their Liquid PPA product. FlexPower's Liquid PPAs are based on the standardized wind and PV profiles of enwex. The standardized handling of FlexPower's physical power contracts makes PPAs easily tradable and thus available to a broader customer base.
Max Amir Dieringer, CEO of FlexPower, welcomes enwex as a missing puzzle piece in the European energy market, stating, “based on the enwex indices, we can provide our customers with transparent hedging instruments for all risks associated with green energy generation. Moreover, the standardized nature of the indices allows for the pooling of liquidity as well as efficient and competitive price discovery."
Contact
For press inquiries, please contact
Amani Joas | amani@flex-power.energy | +49 176 15655871
