The year 2026 is already casting its shadow – and it’s a big, green one. We are taking over the intraday management of an approximately 60 MW offshore wind PPA for one of our customers in the energy-intensive industry. But what does that actually mean for balancing groups, and why is simply purchasing green electricity often no longer enough? An insight into forecast deviations, algorithms, and real cost efficiency.
This marks another important milestone: At the start of 2026, we will take over operational responsibility for a sizeable offshore wind farm. Specifically, we will be responsible for the intraday management of a Power Purchase Agreement (PPA) with a capacity of approximately 60 megawatts. The customer is a typical representative of the energy-intensive industry. At first glance, this may sound like a simple contract announcement, but in fact it represents a complex challenge in today’s energy industry.
Companies aiming to accelerate decarbonisation often turn to PPAs. In many cases, these are structured as so-called ‘pay as nominated’ contracts. In this setup, electricity is delivered as forecasted, and potential deviations are at the risk of the wind farm operator. To cover this risk, fees are typically high, which often makes such PPAs uneconomical. An alternative are the ‘pay as produced’ contracts. Here, fees are significantly lower and therefore more economical, but the risk of deviations remains with the PPA customer.
When Forecasts Are Uncertain: The Pitfalls of ‘Pay as Produced’
Let’s take a quick look at the core issue. With a ‘pay as produced’ PPA, the industrial company receives electricity exactly when the turbines are turning. Offshore wind farms are generally steadier than onshore facilities, but they are still subject to meteorological fluctuations that often only become clear shortly before delivery.
This creates pressure for those responsible for balancing groups. We see it repeatedly in our data: the day-ahead (D-1) forecast often deviates significantly from the actual delivery. If you do not manage these deviations, you will inevitably end up with balancing energy – and that can be expensive. Very expensive.
Germany’s Federal Network Agency Bundesnetzagentur regularly analyses these price spikes in its reports. In periods of high volatility, balancing energy costs (reBAP) can surge dramatically and wipe out a PPA’s margin. A look at the latest monitoring report from the Bundesnetzagentur clearly shows how volatile these markets are, and why a passive approach is no longer an option.
This is exactly where we come in. It’s not just about having electricity. It’s about reducing energy costs for industrial plants by actively managing unavoidable forecast errors instead of leaving them to chance. We relieve our customer of substantial volume and price risks by not waiting for the balancing energy bill to arrive, but by taking action beforehand.
The Algorithm as Trader: Speed is Everything
How do we solve this problem in practice? With a 60 MW portfolio and the dynamics of the energy market, it is hardly possible to do this efficiently by hand. As a rule, there is a high degree of simultaneity, especially with wind power, which means that you are not the only one affected by the forecast deviation.
That is why we rely on algorithm-based electricity trading. Our system, which has already proven itself many times over in intraday load optimisation for our customers, is now also being used in the PPA context.
Here’s how it works: The algorithm continuously monitors weather data and current feed-in. It compares the ‘D-1 forecast’ (previous day) with the “most recent forecast available. As soon as a gap appears – let’s say less wind is expected than anticipated – the system instantly purchases the missing quantities on the intraday market. Conversely, it immediately sells surplus quantities at a profit if the wind blows stronger than planned.
This takes place via continuous intraday trading, 24/7. We benefit enormously from the increasing liquidity in the short-term markets. EPEX SPOT has been recording record volumes in the intraday segment for years, which is what makes algorithmic trading efficient in the first place. Current EPEX SPOT market data clearly underlines this trend towards short-term trading. Through this intraday trading for industrial plants, we smooth out the profile before any expensive balancing group deviations can occur.
Risk Minimisation Instead of Speculation
You may be wondering whether this is risky speculation. The opposite is true. We do not speculate on rising or falling prices. We secure quantities. Our approach can be boiled down to a clear core principle: We make PPAs economically viable again by avoiding high risk premiums through algorithmic intraday trading.
An unmanaged PPA is like a car without shock absorbers on a pothole road. You will eventually get there, but it will be painful and the material will suffer. Our intraday management is the active suspension that immediately compensates for every bump.
For our new industrial customer, this means:
- Lower procurement costs: By avoiding expensive balancing energy, effective costs per megawatt-hour decrease.
- Greater predictability: Wind volatility does not hit the books in full.
- Greener supply across multiple sites: The customer can use green electricity in a clean, balance-sheet-compliant way without operational chaos.
Leveraging Synergies: From Load Control to PPA Management
What we are particularly excited about in this project is the transfer of expertise. The algorithm we are using here is not a brand new development. It has its roots in automated load control and demand response.
In the past, we primarily used algorithms to flexibly adjust the energy consumption of industrial plants to the available supply. In other words, we optimised the demand side (load shifting). Now we are turning the tables and using the same technological DNA to optimise the generation side and the procurement side.
This is a wonderful example of how the two worlds are growing together. Today, operating industrial plants in an energy-efficient manner no longer means simply installing a new pump. It means mastering data streams. Whether we are trading battery storage, reducing load or smoothing out a wind PPA, the logic of flexibility trading remains essentially the same: We use speed and intelligence to compensate for inefficiencies in the market.
Conclusion: Without Management, Green Electricity is Only Half the Battle
Industry is ready to take major steps towards climate neutrality. But it needs partners who understand the complexity of the energy markets and can handle them technologically. A 60 MW offshore PPA is a huge asset. Simply ‘letting it run’ would be economically negligent. With active intraday management, we turn a volatile natural product into a reliable procurement tool.
Would you like to gain a deeper understanding of how we can minimise the risks of your portfolio, or are you looking for ways to optimise your energy costs for production systems and improve them through intelligent algorithms? Get in touch with us!
