Why Optimus Energy

Direct marketing of renewable energy in Greece commences in 2017

Until recently, renewable energy sources (RES) have been treated as a special type of market participant, due to their non-dispatchable nature, and have been compensated for their final production mostly based on a feed-in-tariff mechanism (subsidy) dependent on RES technology. The traditional subsidization mechanism approach has recently changed, under the European Commission’s “State aid guidelines for environmental protection and energy 2014-2020” and their transposition to the Greek Law 4414/2016.

Under the recent Greek Law, new RES production units (signing a Contract for Differences with LAGIE from year 2017 and on) shall be compensated through a market-based mechanism (feed-in-premium scheme) and they shall be balance responsible. In other words, green electricity is sold directly to the competitive market and the producer is also exposed to imbalance charges. The support takes only the form of a sliding premium, which is added to the revenue generated by selling electricity to the market.

Growing complexity in the Greek electricity market: Adaptation to the Target Model

Alongside the new market environment for renewables, the Greek electricity market shall be subject to heavy restructuring from 2019 on, in order to gradually achieve full integration with markets of other EU Member States. The development of a single European electricity market is one of the major goals of the third package of European energy legislation, and the rules for market integration are based on the so-called Target Model for electricity.

The enduring solution for the Greek electricity market under the Target Model comprises:

  • a new forward and bilateral over-the-counter market for hedging the price volatility of the spot market
  • a reformed day-ahead market cleared under the pan-European solution algorithm “Euphemia”
  • a new intraday market, both in the form of auctions (common auctions in the Italian border) and continuous trading (round the clock)
  • a new balancing and ancillary services market that does not exclude the possibility for participation of renewable resources
  • reformed imbalance settlement processes for deviations from market positions.

New challenges for renewable producers

Market exposure and balance responsibility under the new market environment for renewables are a very strong incentive for optimal participation in the appropriate market segments, in order to maximize market revenues and avoid high imbalance costs.

Undertaking these responsibilities under highly volatile market architecture due to the forthcoming Target Model restructuring in Greece poses a further challenge to renewable generators.

Optimus Energy: The way to optimally cope with new challenges and access the Greek electricity market

Owners of renewable assets have not yet been acquainted with the new regulatory change and lack the appropriate bidding strategies to optimally participate in the wholesale market. Optimus Energy is here to help! Over the past years, the experts of Optimus Energy have built advanced software tools to assume the market and balancing risks on the producers’ behalf.

Our core business includes:

  • Efficient forecasting techniques for uncertain renewable production
  • In-house market clearing models and in-depth knowledge of market clearing structure from the forward timescale up to real-time operation
  • Optimal bidding and risk management strategies for the aggregated portfolio

We rely on our market knowledge, strong data analysis capabilities and first-rate dispatching setup to compete in:

  • the current day-ahead market procedures in Greece
  • the new market arrangements under the Target Model (expected from 2019 onwards), including the forward market, the reformed day-ahead market, the intraday market and the new balancing and ancillary services market
  • handling of imbalance risks and servicing the imbalance settlement process. Taking advantage of the “portfolio effect” (spatial aggregation effect) Optimus Energy mitigates production variability and uncertainty of each separate renewable asset in the portfolio. The aggregation is advantageous both from the asset’s view, as it reduces market and balancing risks, and from the power system security perspective. In the latter case, due to the associated cost and complexity of centrally controlling a very large number of decentralized assets, it is preferable for the System Operator to deal with an intermediate aggregator, which in turn is responsible for the management of individual units.

Participating with your assets in Optimus Energy’s portfolio – the first RES aggregator in Greece – will enable you to capture opportunities and bring electricity to the highest yielding markets, while limiting exposures and securing stable market revenues.