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Surge in renewable energy trade n Europe

Renewable energy surge revives Europe’s power trade FRANKFURT/LONDON | BY VERA ECKERT AND NINA CHESTNEY(Reuters) 17 Apr 15 – The rise of renewable energy is delivering a boost to Europe’s declining power market as traders get busy in short term deals to juggle unpredictable supplies of wind and solar.

Exchanges show more trade as suppliers buy and sell power closer to when demand will appear, to meet their delivery obligations, because electricity cannot be stored effectively. New players are also attracted by lower capital requirements and risks.

“As the percentage of renewables generation increases, the need for short-term adjustments will grow, reflecting the limited precision of forecasts for wind and solar generation in comparison to schedules of conventional thermal plants,” said Bonn-based independent energy consultant Thomas Niedrig.

“Over the last five years, (spot) volumes jumped by 25 percent, making the spot sector a growth star in difficult times,” UK research company Prospex said in a study………

German government data shows renewables capacity almost quadrupled from 2003 to 2014 and renewables now account for 26 percent of total electricity generation………

The market leader is the Nordic countries’ Nord Pool Spot, followed by EPEX Spot, Italy’s GME, Spain’s OMIE and N2EX in Britain, according to Prospex.

EPEX last December introduced a German auction for 15 minute intraday power, held at 3pm in the afternoon of the previous day as a tool to concentrate liquidity.

A number of big trading houses already active in EPEX Spot’s short term market, among them Geneva’s Vitol SA, Noble Clean Fuels Ltd. and Total Gas & Power, signed up for it in 2015, it said.

But there is also money to be made by smaller operators.

“Whereas previously intraday trading was largely the preserve of utilities…now it’s definitely very much in vogue and seen as a profitable activity, especially with the flexibility of not being tied to assets,” said Chris Panton, senior analyst at Energy Fundamentals, a London based investment and advisory firm……http://www.reuters.com/article/2015/04/17/us-europe-power-trading-idUSKBN0N814H20150417

April 18, 2015 - Posted by Christina Macpherson | business and costs, EUROPE