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“In general, we only market highly flexible plants, of which there are only 70 to 80 in Germany,” says André Schaller, Key Account Manager, who had been marketing such plants for one of our competitors for seven years prior to joining Alpiq in September 2021.
When it comes to our approach towards marketing highly flexible biogas plants, we only have six competitors in Germany. Unlike all the others, we do not charge market access costs and make all our own revenues transparent. Also, we do not pool. “Our com- petitors lump together power plants of varying quality, flexibility and performance,” André explains: “This means that the good plants are forced to cross-finance the bad ones. We consciously do not do this in order to attract only the most reliable and flexible plants. We pay a higher price, but we also stipulate that the plants must be powered up three times a day, that their installed capacity must be f ive times what they draw on average over the year, and that they must have sufficiently large storage facilities to allow them to shift their production to the most profitable hours of the day.”
By flexibility marketing, we mean the marketing of the energy generated by biogas plants and biomethane cogeneration plants. The plants must be operated flexibly as regenerative storage power plants and not to generate base-load electricity. We market the energy on the day-ahead and intraday markets and either pay our customers a fixed price, or they can opt for the performance bonus model. When calculating the fixed price, we perform a plant-specific evaluation. The criteria include storage size, gas inflow, installed capacity and the frequency of start-ups. In the performance bonus model, we multiply this API (plant performance indicator) by the six highest-priced hours for each day. In contrast to our competitors, we do not charge any market access costs, we do not charge a fee for creating the operation schedules and even make our own revenue transparent. Our portal offers our customers 24/7 access to their schedule and additional information about outages and maintenance work.
T he fact that we are able to attract such plants to our portfolio at all is owed to a special cooperation model with Agrarservice Lass (ASL). T he man behind it is Martin Lass, who is one of northern Germany’s foremost authorities on biogas and who has sparked a trend there. For almost ten years he has been converting plants and making them more flexible. In the meantime, his company employs 30 people. We worked together with the 41-year-old agricultural manager to ensure our services are as attractive as possible for the farmers, but also for us. André Schaller describes the cooperation with Martin Lass, which does not even involve money changing hands, as “a synergy based on mutual trust”. “He brings us customers who we can market, and we bring him customers whose plants he can optimise. If the plants do not offer the required flexibility, he converts them in such a way that it pays off for the farmers, because the conversion allows us to offer them higher prices.”
In the near future, we want to redesign our pricing and calculation model so that we can also profitably market the much more numerous plants with lower flexibility. There is a historic opportunity especially in the emerging segment of biomethane cogeneration plants: In Germany, the first such plants will not be built until 2022 and we could market them from the onset rather than having to win them over from competitors. The margins are very promising. However, the customers’ expectations are also very high. They expect good prices and a fair, open and honest partnership, which we intend to offer them.
Alpiq customer and biogas plant operator.
There are currently some 9,000 biogas plants in Germany, most of which were built between 2007 and 2011. Due to the debate surrounding the competing use of land for agricultural purposes, the expansion of biogas plants came to a standstill. This decade will probably see a renaissance of biomass plants, as their importance for energy policy, but also for biodiversity, is constantly increasing.
After two decades of debate, progress can finally be felt in the expansion of renewable energies. Mainly with regard to wind and photovoltaic generation. T he current trend is storage. With an increasing proportion of fluctuating energy production, we are in urgent need of more storage capacities. For this purpose, existing biogas plants can simply be switched from base-load to peak-load operation and supplement wind farms and photovoltaic plants. They can be transformed into local, highly f lexible and very efficient storage power plants. Until now, the only thing missing was the supporting market signals.
ASL has been converting biogas plants into regenerative storage power plants for five years. Together with Alpiq, ASL is exploring approaches towards optimising plants in order to offer plant operators the best conditions to market the electricity they generate. To achieve this, the operation of the plants, the algorithm-based control and the flexible marketing must be brought into harmony. I can say that our collaboration with Alpiq is characterised by fast and short communication channels and has already led to numerous innovations and new products. Over the coming years, many more regenerative storage power plants will be built that will rely on us to optimise their marketing.