The purchase of energy from renewable sources has gained in importance over the last year, because the so far leading ecological emphasis has been supported by a very strong partner - the financial aspect. Over the last year, the purchase of "green" energy (often based on long-term cPPA contracts) has become strongly competitive with the purchase of energy from the power exchange, the prices of which have experienced a threefold increase y / y (one of the main culprits of the current increases is the situation on the coal market). The energy prices offered to companies in the last days for 2023 exceeded the level of PLN 1,250-1400 / MWh (rates vary depending on the characteristics of the recipients; let us remind you that in 2021 entrepreneurs were buying energy on average at PLN 300-400 / MWh).Read more
According to the data of the Energy Regulatory Office, since the beginning of the liberalization of the gas market, the gas supplier has been changed by 281 thousand. with approx. 6.5 million of all recipients (as of Q3 2021), of which only 5% were industrial recipients (tariff groups with markings from W5 to W10). The PGNiG Group is the undisputed leader in gas sales in Poland, with a market share of approximately 85% in 2020. We will soon find out how the current situation will affect the new distribution of market shares (according to the ERO data, at the end of 2020 in Poland there were approx. 90 companies actively involved in trading in natural gas, with 185 entities having a license to trade in gaseous fuels. ).
The decision to change the seller is influenced by the level of customer awareness and their motivation to change (nowadays mainly the level of the offered price), as well as the ease of making such a change (no complicated procedures) and the availability of competitive offers on the market.
The prices of gas fuel offered by various sellers often differ by several or even several percent, and a significant increase in price differences has been observed since the outbreak of the war in Ukraine. Most sellers set prices based on the current gas exchange quotations, adding excise tax, the cost of the so-called white certificates, margins but also mark-ups, which play an important role in recent months, allowing to secure the commercial risks of sellers. The current gas prices for 2023 listed on the Polish Power Exchange exceed the level of PLN 465 / MWh (updated on 04/25/2022), which means more than fivefold increase in prices over the last year.
The essence of the DSR (Demand Side Response) service is the reduction of electricity demand by consumers during peak demand hours, at the request of the transmission system operator, which in Poland is Polskie Sieci Elektroenergetyczne. DSR is one of many remedial measures used by the grid operator to maintain the stability of the National Energy System.
When talking to entrepreneurs about the purchase of energy and gas, we see the following regularity. While everyone is anxiously observing the current events on the international arena, only some (this applies mainly to large enterprises with well-developed financial services) have taken action and face high prices. Fearing further increases, these companies made their first purchases for the next year (usually as part of indexed offers that allow for dividing purchases into several tranches). The others either did not think about contracting at all or consciously adopted a strategy of waiting out the crisis, hoping to lower prices in the coming months.
We will find out which strategy turns out to be right in a few months, but many years of experience tell us that usually those who do not put everything on one card and consciously manage the risk, spreading purchases over a longer period of time, win. This principle is the basis of the risk management strategy recommended by us in the company.
To put it simply, it can be said that the market of energy products is like the market of stocks, currencies or other commodities. Probably none of us would invest a lot of money in buying shares of an unknown company. Similarly, if we do not have sufficient knowledge about the mechanisms that create prices on the wholesale energy and gas market (thus we may have difficulty identifying the accompanying market risks), we should be careful when making purchasing decisions regarding energy products.Read more
Each of the sellers calculates energy prices based on their own contract pricing models. Due to the fact that the prices offered to companies often differ slightly, it can be assumed that a large number of sellers use valuation models based on current market (stock exchange) indicators.
The main parameter taken into account when valuing electricity is
This situation applies in particular to companies that have never changed their energy supplier and as a result have not changed the energy purchase agreement for many years (data of the Energy Regulatory Office indicate that from 2007 to 10.2021 only 0.2 million customers from tariff groups A , B and C changed the seller - approx. 8% of Polish enterprises). It should be borne in mind that provisions on several-month notice periods with effect at the end of the year may also be found in newly signed contracts, concluded e.g. when changing the supplier.Read more
In recent years, Polish branches of international concerns, promoting ecological logistic choices in their strategies, have been interested in purchasing "green" energy on the domestic market. Energy sellers sealed the energy supplied to corporations with green certificates, which satisfied buyers and did not generate additional costs for the sellers (after all, they bought some energy from RES anyway). Companies that needed more reliable than the aforementioned certificates, documents proving the production of energy from renewable energy sources, received guarantees of origin registered on the exchange.
Currently, the financial pressure resulting from the growing costs of purchasing electricity has increased the interest of a new group of entrepreneurs in green energy - these are companies with Polish roots. Their owners are frantically analyzing the possibilities of buying energy several years ahead by concluding PPA contracts (e.g. long-term purchase of energy from photovoltaic farms) or by investing in their own energy generation sources.
When concluding a PPA contract, it is worth taking a careful look at all contractual conditions, including in particular the price at which the remaining energy will be purchased from the entity responsible for balancing. It may turn out that the profit from the cheaper purchase of energy from the RES farm will be offset by the extremely high balancing costs.
When looking for cheaper electricity, it is worth considering investing in your own energy generation source, as long as you have adequate resources. With the current energy prices (the price of the band product for 2023 exceeds PLN 600 / MWh), investments pay off even after 3 years. We encourage entrepreneurs to carefully verify the various investment implementation models offered on the market - for example leasing a photovoltaic installation or building a PV farm away from the place of energy reception.
We thank you for your trust and cooperation in the past year, and in the New Year we wish you happiness, health and success.
Arkadiusz Somnicki and Adam Wlizło