The volatility in electricity prices is enormous and will intensify. Development and operation of large solar energy systems on the roof and in the field is therefore becoming increasingly risky.
“The era of funding based on the correction amount as mentioned in SDE ++ and then operating carefree for 25 years is over,” said Jeffrey Bartels of Edmij. ‘Minimizing imbalance costs through smart sales and buybacks through downsizing offers a solution. You can even profit from imbalance. ‘
Energy and the energy markets have been Jeffrey Bartels’ field of work since 2005. During his studies in business economics at VU University Amsterdam, he researched a paper mill. By temporarily stopping the purchase of electricity when the price of electricity peaked, a lot of money could be saved while not being at the expense of the process. This business model led him to establish his own company in 2013. It became Edmij, whose core business is smart use of electricity.
Fluctuating electricity price
Bartels: ‘We serve different target groups, including large energy users. An example is a company that produces silicon carbide using industrial furnaces of tens of thousands of megawatts. The process does not just stop there when you remove the power for a few minutes, while playing with it can save a lot on the energy bill and the CO2 footprint. Another such customer is Waternet, which has about 60 pumping stations that keep the polders around Amsterdam dry. There is also flexibility in that process. In this case, it is about how much water you discharge when in relation to the fluctuating electricity price. We help such parties turn their assets on and off at the right time, which requires not only knowledge of the energy market but also of their business processes. ‘
Edmij also offers a revenue model for renewable energy producers, which has become more and more relevant over the years. In 2013, the number of large solar power plants on roofs and fields could still be counted on the fingers of one hand. However, there were already wind farms. They were therefore among Edmij’s first customers. The first in the solar energy world was the developer GroenLeven. More and more would follow. That, according to Bartels, is the logical consequence of the growth in the share of green electricity in the mix. As it increases, balancing the grid and transporting electricity will become more and more challenging. It will not benefit the operation of wind and solar parks and thus the energy conversion. According to Bartels, Edmij offers an important partial solution to this problem.
Bartels: ‘Solar parks will not be built if they do not generate money. Developers are investing this in new projects, which provides an important impetus to the energy transition. However, business cases are under increasing pressure due to profile and imbalance effects. Electricity prices are currently exorbitant. Wind and sun give an analgesic effect. But that power production is uncertain while having to sell the power in advance, for example in the EPEX day ahead market. The difference between what you have sold and what you produce produces imbalance costs. And they keep getting taller. Therefore, we are very aware of the forecast for the day ahead. Algorithms determine this forecast based on weather forecasts, the technical design and composition of systems. The thing is, weather forecasts often do not come true. Therefore, we continuously adjust the positions taken based on the latest weather models and trading floating in the EPEX intraday market. If we expect more sun and we see higher prices in that market than the prices we expect in the imbalance market, we are selling extra electricity. Conversely, if we expect less solar energy, we sometimes buy electricity back. In this way, we reduce the imbalance costs for our customers. ‘
Read the full article in the May 2022 issue of Solar Magazine here.