The risks of electricity trading: an overview

Tags: EEG Feed-in-tariff

The risks of trading renewable energies change once the fixed electricity price under the German Renewable Energy Sources Act (EEG 2017) comes to an end. greenmatch offers an overview.

risks of electricity trading

The EEG 2017 remuneration model has four significant risks when it comes to prices: The counterparty, legal, regulatory, as well as volume-related risks, i.e., risks resulting from volatile energy generation. These risks persist after leaving the EEG 2017 remuneration model, or might even increase, in particular the counterparty risk. Furthermore, electricity plant operators might face additional risks post-EEG 2017 remuneration model:

Price risk, the new challenge

The price risk is particularly crucial: Electricity prices on the free market tend to fluctuate. The current average is EUR 0.0265 per kW⋅h. Meanwhile, the average surcharge value of the last tender for wind onshore was EUR 0.0618 per kW⋅h, according to the German Federal Ministry for Economic Affairs and Energy. The risk of cannibalisation can contribute to the price risk. Decreased market value is the result of more and more electricity from renewable sources entering the market.

New threat: penalties

The profile risk can result in fines if agreements made with the contractual partner, for example, regarding the amount of electricity to be produced, cannot be kept. The imbalance risk refers to the danger that the actual production deviates from the forecast, which can also lead to penalties.

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Claudio Miozzari

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