18.11.2021

Risk in the price of electricity and natural gas. How to avoid it?

Tagi

Autor

Arkadiusz Somnicki

Member of Board

As a rule, the greater the price volatility in the market and the longer the validity period of the offer, the greater the valuation of the associated risk. By shortening the period of validity of the offer to one hour, we can reduce the energy price by up to 3-5%.

In the last quarter of 2021, entrepreneurs contract energy for next year at prices exceeding PLN 500 / MWh. For many companies, this means even a twofold increase in the account y / y.

With such high volatility of prices, the risk of contracting energy on the wholesale market has significantly increased (where sellers buy energy for resale to end users). This risk is transferred to entrepreneurs in the price of energy, which increases it by approx. 3-5%.

A way to protect your company is to receive an offer from the seller with the shortest possible validity period, even one or two hours. For such short periods, most sellers do not add the risk of volatility to the price. Therefore, it pays to make decisions quickly, of course after prior verification of the competitiveness of the offers submitted by sellers.

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17.05.2023

Through the eye of an expert. About the purchase of electricity for 2024

Many entrepreneurs take advantage of the current, relatively good market situation and have already started contracting electricity for 2024. Unlike in previous years, some companies have even completed it and are already making purchases for 2025. Companies for which the cost of energy purchase has a significant share in the entire cost structure more and more often base their decisions on individualized purchasing strategies tailored to the specificity of their operations, taking into account both current market conditions and scenarios in the event of their significant change. These strategies are the basis for the selection of the energy contracting model, they also allow for the implementation of investment or purchasing activities in the field of green energy, which is gaining in importance.

From mid-January 2023, the energy exchange prices for 2024 oscillate in the range of PLN 700-850/MWh. It can be said that this is quite a promotion, considering that in the previous six months these prices generally did not go below PLN 1000/MWh, and at the peak they even reached PLN 1800/MWh. Current prices for companies are approx. PLN 100-200/MWh higher than the exchange prices (this value includes the costs incurred by sellers related to profiling and balancing customers, the so-called "colors", excise duty, service costs, but also the accompanying risks of price changes and sellers margin of course).

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12.05.2023

Join Enfree. Your future in the energy market.

The energy market poses more and more challenges to Polish companies. At Enfree, we help to face them - we develop energy purchase strategies for the largest recipients in the country and carry out purchasing processes for them.

If you know energy and would like to work with us, write to us. We are looking for support for our team.

Call us: +48 695 000 950

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30.01.2023

Why is it not worth waiting with the purchase of energy for 2024?

Loudly in the network about "low", exchange prices of energy listed on the SPOT market in January 2023. (low from the perspective of the prices we faced in 2022). A relatively attractive price level favors entrepreneurs whose energy sales contracts enable the settlement of energy purchases taking into account the current exchange prices (the so-called Day-Ahead Market).

Settlement taking into account exchange prices, both futures market and DAM (SPOT) prices, is an increasingly popular form of settlement of energy sold to large electricity and gas consumers.

Why is it worth not delaying the signing of such an agreement for 2024? Because we gain more than we lose. The main advantage is the ability to react immediately to the market situation. When the time is right, the purchase can be made immediately. In order to take full advantage of this arrangement, it is important to have enough time to catch the price opportunities that occur throughout the year. Therefore, the beginning of the year is a good time to look around the market and choose electricity and gas suppliers for the next year.

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