Energy traders ane.energy and EDF Trading have jointly developed a new trading product to hedge the main risks arising from Ü20 wind power contracts. It is a virtual power purchase agreement – an instrument to hedge the nationwide hourly wind or solar production on a forward basis. This enables aggregators to hedge what is known as the “cannibalization effect” of renewables. The hedge is so variable and scalable that operators can decide how much they want to hedge.
The trading volume of renewables in the market is steadily increasing, which significantly increases the volume and price risk for marketers – but also for each individual plant operator. These risks need to be carefully managed and PPAs can offer significant market value and price risk security in the longer term.
„How will the market values of nationwide onshore wind farms develop in the long term, for example as more turbines are added? For those who cannot or do not want to answer this question, our hedging product should be of utmost interest,“ explains Ralf Höper, Managing Director of ane.energy. „This product gives plant operators the ability to actively risk manage their asset“ adds Dr. Stefan Schlüter, Head of Origination Germany, at EDF Trading.
EDF Trading and ane.energy have already actively traded the product on the OTC market.