Selling power fixed rate or tracker?

[Farmerwully]

I always sold my power from my windturbine on a rate that was fixed for 12 months. Now the company is keen to put me on a variable rate that is fixed to this "dam" or day ahead market price. Anyone else sell this way? They say they will pay me 85 % of dam price. Predicted dam price for 12 months 25p apparently

 

[AlexMcGowan]

The question between SSP (System Sell Price) or Fixed Rate contracts is a good one Farmerwully. With the market being in a bit of upheaval at the minute, with neither suppliers or generators having any idea what government intentions are, it comes down to your business approach and risk appetite more than anything.

If you're of the mind that the government will eventually U-Turn on their comments regarding export PPA price caps, then a 6-month SSP contract would make sense. It would allow you to wait for it to blow over, whilst capitalising on the extraordinary winter prices forecast. With shortages still a major concern, rates are forecast much higher than the 25p you've mentioned above in the near term.

If you'd rather a more risk averse approach and to stick to your current business model, there are still some incredible fixed rate deals available, it's just a case of knowing which suppliers still have an appetite for wind, which I can assist with if you'd like?

Either way, the offer your current supplier is suggesting is not competitive. For all of our customers that SSP makes sense for, we achieve 97% of the SSP (or "DAM" price as you refer to it as above) with 100% of all embedded benefits passed through to the generator. For a supplier to take 15% of the power price as their margin is akin to out of contract rates when there is no agreement in place whatsoever.

If you'd like me to take a look for you I'd be happy to help, just either PM me on here or send me a quick email on [email protected] and I can get the ball rolling. We assist quite a lot of TFF members with their negotiations, so a reference or referral should be easy to come by if you already know members on here.

 

[Farmerwully]

The question between SSP (System Sell Price) or Fixed Rate contracts is a good one Farmerwully. With the market being in a bit of upheaval at the minute, with neither suppliers or generators having any idea what government intentions are, it comes down to your business approach and risk appetite more than anything.

If you're of the mind that the government will eventually U-Turn on their comments regarding export PPA price caps, then a 6-month SSP contract would make sense. It would allow you to wait for it to blow over, whilst capitalising on the extraordinary winter prices forecast. With shortages still a major concern, rates are forecast much higher than the 25p you've mentioned above in the near term.

If you'd rather a more risk averse approach and to stick to your current business model, there are still some incredible fixed rate deals available, it's just a case of knowing which suppliers still have an appetite for wind, which I can assist with if you'd like?

Either way, the offer your current supplier is suggesting is not competitive. For all of our customers that SSP makes sense for, we achieve 97% of the SSP (or "DAM" price as you refer to it as above) with 100% of all embedded benefits passed through to the generator. For a supplier to take 15% of the power price as their margin is akin to out of contract rates when there is no agreement in place whatsoever.

If you'd like me to take a look for you I'd be happy to help, just either PM me on here or send me a quick email on [email protected] and I can get the ball rolling. We assist quite a lot of TFF members with their negotiations, so a reference or referral should be easy to come by if you already know members on here.

Thank you for your detailed reply. I am in Northern Ireland ìf that makes any difference to you?

 

[AlexMcGowan]

No problem Farmerwully, I'll PM you now to see if there's anything we can do.