As a result of the coronavirus crisis, energy prices on the spot and futures markets have fallen to a record low. For example, a megawatt hour of gas to be delivered in 2021 has only cost around €12 in recent days - a price low that has not been seen for more than ten years. Last year, gas sometimes cost 24 euros per megawatt hour.
"Since February of this year, wholesale electricity prices have fallen by 30 percent compared to 2019, while gas prices have almost halved in just a few days," explains Christoph Trares, Head of Sales at the international energy service provider enexion Group.
React quickly and take advantage of price benefits
Energy-intensive companies with a total consumption of more than 50 GWh per year across Germany can take advantage of these price benefits by purchasing their energy directly from wholesalers. "They should stock up on wholesale energy independently of the supplier for the coming years before prices rise again," advises Trares. Wholesalers can act up to five years in advance. However, they do not have to commit to the quantities they will consume in the future and can buy and sell at any time. "Especially in the current crisis, wholesale procurement is by far the best way to benefit from price advantages, increase flexibility and minimize risks," adds Trares.
On the other hand, those who purchase their energy in the traditional way in the form of fixed-price or tranche contracts via a supplier always pay a retail price. Whether it is mark-up or formula-based, OTC or exchange-indexed is irrelevant. Market access is controlled by a single supplier who ultimately determines the prices - and is not forced to pass on the cheapest prices available on the market to the customer. "As soon as companies do not procure the energy themselves, this is classic retail with a price that is merely indexed," explains Trares.
Protect against supplier bankruptcies
Another advantage: those who buy directly from wholesalers independently of the supplier protect themselves against supplier bankruptcies, as the energy belongs to the company itself and not to the supplier, who takes over the balancing group management.
Last year - long before corona - numerous energy suppliers filed for insolvency. "The trend is likely to intensify due to the current difficult situation," says Trares. The first energy companies have already announced short-time working due to the coronavirus pandemic. Problematic for those affected: "The contracts will initially continue to run even after the announcement of insolvency. As a rule, there is no special right of termination." Security of supply is also at risk if the supplier's balancing group is closed. Companies are not entitled to a replacement supply above the low-voltage level or the low-pressure grid. For an energy-intensive company, this can mean the complete loss of energy supplies.
