Profile Price Cap provides security while retaining upside
Sourcing your power on spot basis provides you flexibility. Flexibility in not being bound to one supplier. Flexibility in not having your credit lines reserved for bank guarantees to cover so called MtM risks. Flexibility to source your power from renewables sources when available, and from the EPEX spot exchange when renewable production is not available.
Sourcing on spot basis also poses risks
The most obvious one is that spot price can be much higher than you budgeted. This was for example the case in 2018, where the average spot price was 52.5 euro, whereas the forward early September 2017 (when many commercial & industrial companies finalized their annual budget for 2018) was 36.5 e/MWh
One of our industrial partners asked us whether we could provide them with a ‘cap’ on their profile price so they would always stay within budget. For this purpose, we developed the Profile Price Cap; a product that allows you to benefit from low spot prices, while eliminating the risk of going over budget.
How does this work?
- Provide us with your consumption profile from the previous 2 years
- We will than tell you our estimate for the total cost (based on current forward market prices), which you may want to use for your budget estimate
- We will also tell you how much a guarantee on your profile would costs, such that when you source on spot EPEX basis, costs will not be higher than budgeted.
- In case the EPEX costs are higher than our guarantee, Priogen pays the difference between the actual EPEX costs and the price cap.
- In case the EPEX costs are lower than the profile price cap, the benefits are for you.