Digitalisation in energy trading – Marketing electricity from sun and wind
Energy turnaround means that we are relying more and more on electricity from renewable sources - and have to cope with the naturally fluctuating feed-in quantities, which in many cases, cannot be forecast with certainty even in the short term. The rapid price fluctuations also pose a challenge for direct marketers, who want to sell electricity from solar and wind farms profitably on the stock exchange around the clock, separately for every quarter of an hour. A complex task for human electricity traders.
The solution is provided by an algorithm that determines the marketing strategy with the optimal risk-return ratio for every quarter of an hour from the current forecast and its uncertainty and translates it into trading orders on the so-called intraday market. Our method is based on the idea that fluctuating feed-in quantities shift the power supply curve against the demand curve and thus lead to price movements. Supply and demand curves, in turn, can be observed in the so-called day-ahead market of the exchange on the previous day. Finally, the link with a model of forecast uncertainty for different weather regimes results in a stochastic distribution of trading success, which we optimise by means of the choice of marketing strategy depending on the trader's risk appetite. The algorithm is part of our customized IT solutions package for direct marketers, which map and automate the entire energy trading process in a highly efficient manner – from the feed-in forecast to optimization and bidding on EPEX Spot.