Pexapark has worked with green independent power producer (IPP) NextWind on an energy trading strategy for its wind farm portfolio in Germany, ahead of its planned repowering.
With the support of Pexapark’s portfolio trading services team, NextWind has secured separate route to market and hedge contracts for a 200MW portfolio of wind farms, located across Germany.
This pair of agreements will enable NextWind to continue generating stable revenues from the 20-year-old projects, which have now reached the end of their “regulatory life”, under the Erneuerbare Energien Gesetz (EEG) subsidy scheme.
The agreements will give NextWind a means to manage merchant risk for the period between the expiry of the EEG subsidy and the full repowering of the site, expected in 2026-2027.
As NextWind aims to rejuvenate Germany’s aging wind infrastructure, this scheme could see the total capacity of a wind farm increased by up to three times, while making the most of the excellent local wind resources and existing grid connection.
With repowering and lifetime extension schemes on the rise across Europe – but a limited track record of project completion – new, innovative approaches are increasingly needed to bring older, post-subsidy assets into the next phase of their commercial operation.
Pexapark’s team played a key role for NextWind, not only identifying a novel approach to optimising project revenues, but also using advanced software tools to significantly increase the speed of the tendering process.
“In the German market, both RTM and hedging needs are usually fulfilled through a single contract with the offtaker who offers the most attractive balancing agreement – but this is a compromise that can often result in an unfavourable hedging price,” said Jens Hollstein, EVP Advisory, Pexapark.
“By separating these contracts, we were able to secure the most attractive balancing contract with one offtaker and the most attractive hedging contract with a second.
“That ultimately resulted in an uplift of between €10 and €15/MWh, as compared to a single agreement – significantly enhancing the value NextWind can deliver from the wind farms.”
Werner Suss, Co-CEO and Co-Founder, NextWind, added: “Innovative, data-driven trading strategies are integral to NextWind’s mission to give Germany’s wind infrastructure a new lease of life.
“We were delighted to work with Pexapark to secure ongoing revenues for this project, laying the groundwork for our upcoming repowering plans and helping to create as much value as possible for our investors and local communities.”