RENEWABLE GENERATOR ACHIEVES £900K annual power revenue

how renewable generator balanced risk and reward in low market conditions

£900K

ANNUAL POWER PRODUCTION REVENUE

18%

TRADED PRICE BENEFIT AGAINST COMPETITOR

ABOUT

THE CLIENT

With a multidiscipline agricultural background, a decision was made by this family business to diversify and invest in an on-site biogas CHP facility, coming online in 2014. Following previous working relations, the generator turned to Optimised to 'optimise' revenues from their exported power from Q2-16. Additionally, for Optimised to manage the generation subsidy element, to ensure compliance and prompt payment to avoid impacting cash flows. 

INDUSTRY

SERVICES DELIVERED

Challenge

Optimising export price in a record low market

Taking responsibility for selling the exported power coincided with a record low market, as power and gas followed a plummeting oil price downwards. Our remit was to achieve the highest price possible, without being over exposed to index and spot markets which were deemed too risky by the generator, based on our assessment of market volatility at the time. 

solution

STRATEGIC TRADING & RISK MANAGEMENT FOR RENEWABLE EXPORT

Given the low markets, our advice was to avoid any long-term price commitment. With a suitable consistent export profile, a short-term traded contract was recommended. Considering the client’s risk appetite, a semi-aggressive trading strategy was adapted, resulting in a combination of price certainty and proactive trading to achieve as high a price as possible without taking on too much exposure. Index and spot markets would be continuously monitored with nominated volumes being strategically proportioned.