Smart Energy Finances: Purchasing electricity indexed to stock exchange prices

November 23, 2023 Editor

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This week’s Smart Energy Finances looks at the launch of a platform by Polish DSO Tauron, which will allow business customers to purchase electricity indexed to stock exchange prices.

Also on the radar are EDF’s strategic acquisition of a heat pump specialist in the UK, following a prior investment in 2022 in the same company, as well as two green bonds from German energy company EnBW valuing €1.5 billion for e-mobility, grid development and renewable projects.

Tauron’s product service platform

Polish DSO Tauron is launching a product service platform, allowing entrepreneurs using exchange products to quickly decide when to purchase electricity by tracking its current market value.

According to the company in a release, over 5,000GWh of electricity for business will be served by the digital platform, which will be launched by Tauron in the coming year.

The platform will allow business customers to purchase electricity indexed to stock exchange prices and service contracts for the purchase of energy from renewable sources and other business products.

In the initial phase, the Tauron Product Service Platform is intended to support exchange products, such as the Exchange Valuation of Energy, the Exchange Valuation of Gas and the Exchange Valuation of Property Rights.

The platform enables business customers to submit purchase applications in various modes provided by Tauron. It will also improve the acquisition of information about the contract status and facilitate communication and customer access to currently applicable documents.

Explained Tomasz Lender, vice-president of the management board of TAURON Głos: “The new service platform is an advanced IT system prepared with business customers in mind.

“It allows you to easily and intuitively operate products in which the price is calculated based on stock exchange quotations. Thanks to this tool, each customer can easily submit applications for the purchase of electricity, gas fuel or property rights 24 hours a day, 7 days a week.”

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According to the utility company, entrepreneurs using exchange products can quickly decide when to purchase electricity by tracking its current market value with the platform.

Thanks to this, in the event of a price drop on the wholesale market, the company can purchase electricity at lower prices.

This type of electricity contracting is particularly attractive for companies that want to decide when to purchase electricity or gas and have full control over their cost in order to be able to plan it precisely and include it in a future budget.

In coming months, the platform will also enable the service of ecological products, such as EKO Premium, which guarantees that the customer will obtain 100% energy produced from renewable energy sources, including hydroelectric power plants, wind farms or photovoltaic installations.

EDF acquires CB Heating

EDF, Britain’s biggest generator of zero carbon electricity, has strategically acquired one of the UK’s leading air source heat pump installers, CB Heating.

The acquisition follows a strategic investment made by EDF into CB Heating in 2022.

Also, recently the UK government extended the Boiler Upgrade Scheme – which provides upfront capital grants to support installation of heat pumps and biomass boilers in England and Wales – from 2025 to 2028, and boosted the air source heat pump grant by 50%, rising from £5,000 ($6266) to £7,500 ($9398).

EDF expects the investment to improve the end-to-end customer journey from selection to installation, halving the customer journey time, which currently takes three to four months.

The deal will also see EDF putting a dedicated team in place to deliver heat pump solutions for a wide range of homes across the country, forming part of a wider range of zero carbon home products for both local authorities and developers looking to ensure compliance with the new legislation.

Over the past year, EDF’s strategic investment and partnership with CB Heating has supported the development of the Heat Pump Installers Network (HPIN) Academy, which delivers free training to upskill engineers at every level in the UK.

Since August 2022, the partnership has generated a 414% surge in the number of heat pump installers being trained, rising from 90 to 463 installers.

Clayton Browne, managing director at CB Heating, said: “Now CB Heating has the investment and resource to continue its journey to develop and grow our HPIN network, which is the largest network of qualified trained heat pump installers in the UK.

“We plan to train over 1000 heat pump installers in 2024, meaning a quarter of all estimated heat pump installers in the UK will be a HPIN member.

“It’s a very exciting time for CB Heating as we take this next step in our 23-year history.”

EnBW successfully issues two green bonds

German electric services company EnBW has issued, via subsidiary EnBW International Finance B.V., two corporate green bonds with a combined issue size of €1.5 billion ($1.6 billion).

The proceeds will be used exclusively to finance or refinance clean tech projects, including fast-charging stations for electric vehicles, expansion and upgrading of grid infrastructure, solar farms in Germany and France and onshore and offshore wind farms.

Said EnBW CFO Thomas Kusterer in a release: “Today’s green bond issues provide advance funding for investments in the coming 2024 financial year. We are proactively managing our financial resources in order to continue on our sustainable growth trajectory.

“In the years ahead, we will commit an average of €4.5 billion ($4.8 billion) in gross investment per year on EnBW’s path to climate neutrality.”

As the largest energy company in Germany, EnBW states their priorities as the expansion of renewables in combination with the upgrading of electricity grids, developing electric mobility and establishing the future generation and supply infrastructure based on hydrogen and green gases.

“Over 80% of our investments are channelled into implementing energy transition projects in Germany. This is an important contribution to Germany’s future as a business location,” added Kusterer.

Including today’s issue, EnBW has already issued green bonds totalling €5 billion ($5.5 billion) since 2018.

The issuance was supported by a banking syndicate consisting of HSBC, ING and UniCredit and additionally BBVA, DZ BANK, Helaba and Morgan Stanley.

The issue date will be 23 November 2023. The bonds have coupons of 3.850% and 4.300% and maturities of 6.5 years and 10.5 years respectively.