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Optimum trading strategy identified

Over the past year, Circular Energy has examined the best method to bring power to the market. Together with PZEM (formerly Delta), the Energy Delta Institute and eRisk, a consultancy firm, an optimum trading strategy has been derived from a study of historical data.

 

The relevant data include the capacity of our gas-to-power plant, the capacity of the wind farm and the capacity of the cable to the coast.  At times when the wind is blowing, the cable is ‘full up’ with power from wind, so we must switch off. With the same token we can make use of the export route at times of low wind speeds and we have the choice whether we produce or not. 


Wind speed

The latter depends on prevailing power prices, which in turn are related to the wind speed. The harder the wind blows on the North Sea, the more the price drops on the APX power exchange. With the increase in Offshore Wind supply to Europe, it’s expected that the correlation between wind speed and electricity prices will increase.

 

Higher price

Based on this insight, the probability distribution of wind speeds and historical electricity prices, a trading strategy has been formulated that allows Circular Energy to realise a higher price than the average market price. After all, we only trade the price peaks. This offsets the disadvantage of producing intermittently. 

 

The research, which is partly subsidized by the Dutch Enterprise Agency, has now been completed. The main conclusion is that a power producer who can produce in complement to power from wind has an attractive future. Now we can start building.