Ensuring reliability in a rapidly changing energy landscape

Igor Koprivnikar, member of the management board at Gen-i, discusses what sets the organisation apart as the top power dealer in eastern Europe, the benefits that a global portfolio can bring for clients in regional European markets, and how strong fundamental and scenario-based analytics can optimise the development of strategies to meet clients’ demands

How does Gen-i’s global portfolio benefit clients operating in regional European markets?

Igor Koprivnikar, Gen-i: The company is continuously developing its comprehensive portfolio across European markets to optimise energy flows and the creation of value through the effective pursuit of the right balance between constantly shifting expected financial returns and risks. In today’s rapidly changing energy landscape, our clients’ needs are increasingly complex and demanding – and not only from a technical perspective. The shift towards the short term and increasing volatility puts significant pressure on clients’ responsiveness and the ability to hedge their production and consumption, particularly in less liquid markets.

Our presence in 21 markets allows us to diversify risks and take advantage of economies of scale, including the effective utilisation of our high market share – more than 40% – of cross-border transmission capacities in central and southeastern Europe, which enables value creation and effective optimisation of each megawatt hour in our portfolio throughout the trading curve. Building on this, our strong fundamental and scenario-based analytics permits us to develop holistic strategies for decision-making in line with clients’ overall needs, and through exploiting the optionalities provided by our comprehensive portfolio, we are able to provide clients with liquidity and hedging opportunities superior to those available in the market. 

 

Gen-i has maintained its position in the 2018 Energy Risk Commodity Rankings as the top-rated power dealer in eastern Europe. Why do clients rate Gen‑i’s services so highly, and what is its unique selling point?

Igor Koprivnikar: Gen-i’s highly developed global business infrastructure for electricity and natural gas enables consolidation of information and streamlined decision-making in one place while remaining attentive to local needs and requirements. We offer our partners more than simple access to various liquid markets and transparent prices – we enable them to optimise their production or consumption, and provide customised solutions for the sale or purchase of flexibility. Through the value of our flexible portfolio, we are able to offer superior conditions and solutions, tailor-made to clients’ individual and specific needs.

Crucial to the successful operation of our services is the combination of centralised management with an attentive local presence, which allows continuous communication with partners. It nurtures partnerships and enables the development of distinct, focused solutions that represent a competitive advantage. Moreover, by identifying and meeting needs otherwise neglected, our solutions yield significant added value, which Gen-i shares with its clients. For us, flexibility means a positive approach to changes. We establish fair, open and diligent relationships with clients, and provide them with bespoke optimal solutions. Our dedication has proved itself in even the most difficult of circumstances, and we are proud of the satisfaction our clients express with our services.

 

How did the dry weather conditions in southeastern European power markets in 2017 affect activity among Gen-i’s clients? What solutions did Gen-i offer to help clients manage risk under these conditions?

Igor Koprivnikar: Compared with western European markets, southeastern Europe lags behind in its installed wind and solar capacity, and the lack of investment in competitive and flexible conventional production is causing heavy dependence on the hydrological situation. In adverse weather conditions, as seen in 2017, this increases uncertainty and volatility. As the hydrology-driven volatility in southeastern Europe is distinct from the volatility in western European markets, the flexibility and optionality of Gen-i’s portfolio – resulting from our analytic capabilities – has enabled us to stay ahead of the curve and extend this to our clients, even in these challenging market conditions.

 

How has the increased use of renewables across the European power market affected Gen-i’s clients’ activities – particularly during dry weather conditions?

Igor Koprivnikar: Gen-i is increasingly shifting its focus towards short-term and near-real-time trading as a result of the impact of renewables across European power markets. Increased deployment of renewables in western Europe has already significantly impacted short-term volatility, and consequently the needs in the structure and responsiveness in regard to trading strategies. Given the difference in volatility patterns between western European markets and southeastern Europe, Gen-i has been acquiring options and flexible products – both for its own portfolio and in support of its clients’ risk management strategies. This, for instance, also enabled an optimal response during dry conditions, and volatile and significant price spreads across regional markets in 2017.

 

What activity do you predict in the European power market in 2018, and how will Gen-i support its clients in this environment?

Igor Koprivnikar: We have ambitious plans for the future – aside from making inroads into new markets and improving our portfolio’s performance capabilities and diversification, further implementation of algorithmic solutions into our fundamental and scenario-driven analytical support will enable an even faster response to an ever‑increasing range of possible scenarios. Moreover, by inclusion of additional products, we intend to strengthen our short-term and near-real-time activities through demand response and ancillary services. The resulting differentiation and development of trading services will also provide benefits to our clients. In a rapidly changing and increasingly challenging energy landscape, our intention is to remain the most reliable player in southeastern Europe.

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