Thought Pieces

As a follow-up to the article published on 7 July 2021, Kim Keats Martinez uses data from Renewables Ninja to demonstrate how the combination of wind, PV and batteries (BESS) reduces surpluses and market-priced power purchases while more contracted MW can be signed on baseload, thus improving project profitability.

Índice mensual de rentabilidad de baterías centrándose en las oportunidades de arbitraje usando precios del mercado diario español de OMIE.

​Monthly battery profitability index focusing on arbitrage opportunities using Spanish day-ahead prices from OMIE.

Kim Keats discussed technical and economic curtailment in the Iberia power market as well as potential mitigating factors in his presentation @ Solarplaza Iberia 2024.

On 14 May 2022, the Spanish government published an executive order which implements the “Iberian exception”, as agreed in principle with the European Commission, and which aims to limit the impact of the price of natural gas on power prices....

The environmental impact and the benefits offered to the electricity system are two of the criteria when analysing which technology should be promoted more if renewables encounter barriers to their growth, such as the limitation of network capacity, for example, one of the greatest challenges in Europe." A few months ago, there was no doubt...

Given the increase in costs, are there ways to control the generation costs of combined cycled gas turbines (CCGTs) in Europe? Yes. It just so happens that diesel (#2 fuel oil, gas oil) is typically 20% more expensive in energy terms than crude oil, while natural gas tends to be 40% cheaper, with the result that diesel is typically twice as expensive as natural gas. However, prices are reversed. The rise in natural gas prices in Europe has outpaced that of Brent, meaning the relationship has reversed and diesel was recently half the price of natural gas...

Auctions should maximize the value of the project more than trying to minimize the resulting winning bid price. This would mean that the auction would place a value proportional to the contributions that each technology offers to different areas of society...

European regulation tells us that capacity mechanisms must (1) be based on national and European level demand coverage assessments, (2) allocate capacity through a market mechanism and allow for cross-border participation, and (3) implement emission caps that limit the types of capacity that can participate in such capacity markets...

La Subasta se desarrolló bajo el tipo ‘pay as bid’, en la que los promotores pujaron por el precio que estaban dispuestos a cobrar por la energía que generasen sus plantas y ese es el precio que se les ha asignado durante, al menos, 12 años. No obstante, a parte de este mecanismo, los proyectos renovables se financian con PPA y accediendo al mercado. Estas dos opciones y su actualidad fueron analizadas por Kim Keats y Antonio Arco, de la consultora EKON SC, en nuestro último Panel Virtual...

COVID-19 has meant the application of social and economic measures never seen before in Spain, or in the rest of the World. The measures of confinement and hibernation of the economy, during the months of March, April and part of May, have led to important changes for the electricity sector. Electricity demand has fallen, accentuating the drop in pool prices that were already occurring before COVID-19...

Today there is a great appetite in the market for developers and investors, both national and foreign, to develop and build wind and PV assets in Spain…

Portugal carried out an auction for 1.4 GW of renewable capacity and has achieved spectacularly low prices. We were recently surprised by the news that, here in Spain, the Ministry for Ecological Transition plans to apply the same model of electricity auction used in Portugal...

Como una continuación al artículo publicado el 7 de julio de 2021, Kim Keats Martínez usa datos de Renewables Ninja para demonstrar como la combinación de eólica, fotovoltaica y baterías (BESS) reduce los excedentes y las compras de energía a precio de mercado al mismo tiempo que se pueden firmar más MW contratados en baseload mejorando así la rentabilidad del proyecto.

El 17 de noviembre de 2023, publiqué un artículo que evaluaba las oportunidades de arbitraje para los BESS utilizando únicamente los precios del Mercado Diario ("MD"). Me preguntaba si los BESS obtendrían mejores resultados si el análisis se basara en los precios potencialmente más volátiles del Mercado Intradiario continuo europeo ("MI"). La respuesta es no, los resultados son similares. Publicado también en Energía e Innovación 2024-2 de Infoenergética (segundo link).

En el sector eléctrico se habla mucho de las baterías pero al menos que seas un experto es fácil perderse. En este artículo Kim Keats explica cómo empezar a plantear el negocio de las baterías centrándose en las oportunidades de arbitraje. Para esto combina un modelo de optimización de elaboración propia con precios históricos del mercado diario del OMIE.

With a marginal system for the daily electricity market, the combination of the lack of sufficient low-cost electricity sources (including renewables), and a thermal gap that which can only be covered by CCGTs using natural gas, makes the price of electricity in the Iberian daily market linked to the cost of generating with a CCGT...

Spain’s interventionist measures in recent months aimed at reducing the effect of record wholesale energy prices on consumers’ electricity bills have temporarily increased regulatory risk perception in the sector. But they looked to be leaning towards local major utilities in the end, consultancy EKON said. Steven Taylor, a Director at EKON stated that "It is going in the utilities direction and obviously part of that is related with the EU. It is tilting toward the utilities...

Spain has a total reservoir capacity of 55,000 hm3, of which 40% of its capacity corresponds to hydroelectric dams, one of the highest proportions in Europe and the World.
Being one of the technologies with the greatest participation in the electrical mix of the country, hydro energy is characterized with having low prices, historically, and a guarantee of supply according to the regulation of the flow by the companies that control the operation of the numerous hydraulic dams...

The combination of renewable technologies to generate electricity in the same space is not a novelty, it is a increasingly common practice. Firstly, to incorporate photovoltaics in dams, a mix with enormous potential. And, secondly, and the main focus of this article, the combination of wind and PV...

With winning bid prices lower than in previous auctions, even with a record low for PV of 14.89 EUR /MWh, one of the most widespread doubts by our audience was to know if some speculation could be behind the low prices…

¿Cómo valora EKON el nuevo marco de subastas en España? El nuevo esquema, descrito en el RD 960/2020 presenta un marco para las subastas más acorde con las tendencias internacionales Frente a los mecanismos de subastas anteriores, el RD 960 2020 es más transparente de cara a los productores evitando el cálculo de esos “suelos implícitos” que existían antes...

The green certificate market is an alternative to renewable auctions…

Why does the EU Emission Trading Scheme (“ETS”) market work? It is not out of major polluters goodness of heart. If a major polluter forms part of the EU ETS and does not have sufficient EU Allowances (“EUA”) to cover their annual emissions, they will face penalties of 100EUR/tCO2e. This provides the “stick” to ensure compliance. But there is also a “carrot”: the major polluter can reduce its liability by reducing its own emissions and, if it can overachieve, it can sell any excess EUAs in a secondary market...