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Closing date procurement

You procure all the energy you need, e.g. for a specific one delivery year at a certain point in time before the start of delivery

Advantages

  • uncomplicated, simple and fast procurement process
  • very easy to plan because the average price of the energy procurement is immediately fixed

Disadvantages

  • identifying the best time to buy is difficult
  • No possibility to profit from falling prices

Pricing

  • The supplier determines an average price for the total requirement based on the current price curve at the time of purchase.

Tranche procurement (horizontal)

You procure the energy you need in several tranches. The number can be defined as you wish. Each tranche is a scaled part of the load curve and therefore corresponds exactly to the overall profile. If, for example, you have agreed on 8 tranches, then you purchase 1/8 of the total energy at each of 8 points in time before delivery begins. Opportunities and risks from price changes are equally distributed in this strategy.

Advantages

  • reduction of the risk through different purchase times
  • participation in falling prices
  • relatively easy to plan because the average price of energy procurement is fixed before delivery begins

Disadvantages

  • procurement process takes months with constant monitoring of price developments

Pricing

  • The supplier agrees a price formula with the customer. This can include various stock market products (month, quarter, year, base, peak) and an additive component. This formula then determines the respective tranche price for each tranche purchase.

    Example of a formula: 0.8 x base 2025 + 0.2 x peak 2025 + €9.34/MWh

Tranche procurement (vertical)

You procure the energy you need in several tranches. The number can be set arbitrarily. The tranches can have completely different profiles, e.g. different stock exchange products such as base and peak or special timetables. It is crucial that the sum of all tranches at the end of the procurement process corresponds to the required overall profile is equivalent to. Opportunities and risks are moderate with this strategy, the opportunities are greater than with of horizontal tranche procurement.

Advantages

  • reduction of the risk through different purchase times
  • participation in falling prices
  • relatively easy to plan because the average price of energy procurement is fixed before delivery begins

Disadvantages

  • the procurement process can take months if price developments are constantly monitored.
  • more difficult overview of the current portfolio situation due to different profiles of the individual tranches and because the profile of the aggregate changes with each tranche 
  • Complicated determination of the required tranches through hedge procedures 

Pricing

  • The supplier determines a price for each tranche. For tranches corresponding to exchange products, the price is calculated from the current exchange price plus a fee. For schedule tranches, the price is determined by the supplier using the current price curve.

Spot market procurement

You procure the energy you need exclusively on the spot market. This means that none of your requirements are purchased in advance, but your procurement only begins with the delivery. Each delivery day is then purchased as a single tranche at current spot market prices. Diese Strategie bietet höchste Chancen, beinhaltet aber auch die höchsten Risiken.

Advantages

  • each tranche corresponds to the current market price
  • participation in falling prices
  • no effort for the customer, fully automated process

Disadvantages

  • difficult to plan because the average purchase price is only known after the end of the delivery time
  • high financial risk in the event of sharp price increases

Pricing

  • The price of each daily tranche is determined on the basis of hourly spot market prices. In addition, there is a handling fee for the supplier.
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