Over the past year, Neas Energy has consolidated its portfolio of renewables assets under contract on the German Direktvermarktung model to total 2500 MW installed capacity as a result of the strategy to target individual assets with attractive characteristics.
Over the past years, we have seen the price on Direktvermarktung services in Germany dropping to levels where balancing, at the best, is a marginally profitable service. This naturally causes us to be increasingly selective on which assets we will offer our balancing services for. We simply need to be selective and conduct individual assessments of the location and the production profile of the assets to provide our Direktvermarktung clients with real additional value, explains Wolfgang Krüger, Managing Director Neas Energy GmbH.
In Germany for the long run
Neas Energy launched its asset management services in Germany with the introduction of the Direktvermarktung under the EEG in 2014, and has since been building and diversifying the company’s portfolio in Germany to establish and consolidate the company’s position in the German power and gas market.
What we have seen in Direktvermarktung is a maturing market where decreasing prices have caused some companies to withdraw and others to consolidate their services. I wouldn’t propose to know if the current price level is appropriate. But as a company we must be able to compete in mature low margin markets to have a long term sustainable business model. This is the reality in commodities, and this is our strategy as a trading and asset management company, not just for Direktvermarktung, but for our business as a whole, says Wolfgang Krüger.
Broadening the Footprint
The past year, Neas Energy has broadened its product and service suite in Germany to provide Stadtwerke with flexible balancing area managementand implementation of the so-called “Aggregator Model” to facilitate industrial customers in offering their flexibility to the reserve power markets.
We aim to broaden our footprint in Germany and strengthen our overall position in power and gas markets. As the commercial conditions change so do our clients´ demands, and we must be ready to meet those changing demands to succeed. Right now, we are engaged with Stadtwerke and industrial customers to implement our IT systems providing an interface for optimization of their assets and a direct link to our 24/7 trading services to utilize generations and consumption flexibility. In the renewables space, we are seeing an increasing demand for financial products to offset risk related to power prices and production volumes, finishes Wolfgang Krüger.