You are an energy manager at klimaVest - a job that barely existed a few years ago. What exactly does this mean?
At its core is the strategic marketing of the electricity generated by the klimaVest portfolio at the best possible conditions for the fund and its investors. Sounds simple, but there’s a lot behind it.
Markets are not asleep. A central part of my work is the continuous evaluation of price developments, political signals and market data. Only those who assess the situation at regular intervals can act in good time before risks or opportunities reach the portfolio.
For existing assets, I continuously check for optimization opportunities in electricity sales. If a new solar or wind power project is added to the portfolio, I analyse the best marketing option. And above all: when the right time is for price hedging. This decision is anything but trivial: The optimal time is not easy to determine, it is a result of a variety of market factors that shift regularly. Assessing it correctly also has an impact on the long-term earnings situation of an asset.
You are talking about the right time. Could you illustrate this specifically for klimaVest?
High electricity prices are an opportunity, but only if you use them before they turn. This is exactly the core of my work: identifying attractive price levels and concluding long-term purchase agreements at this moment. A so-called power purchase agreement, or PPA for short, which is currently fixed at favourable conditions, secures stable income for the fund, even if the market gives way significantly later.
For example, When political developments or market bottlenecks are driving prices to an attractive level, this is the right time to enter into long-term PPAs for new or existing klimaVest assets. If we wait too long and prices fall, the fund may miss attractive margins for the next 10 or 15 years.
On what basis do you develop marketing recommendations for fund management?
Two glasses, one decision: Each asset is analysed for its specific marketing conditions and simultaneously evaluated in the context of the overall portfolio. What makes sense for a single wind farm in Sweden can be weighted differently from a portfolio perspective. For each asset, I derive specific recommendations for action.
The basic principle is stability first: The lion’s share of the portfolio runs through fixed remuneration structures: government tariffs or long-term PPAs. This creates planning security and stable returns for investors. What remains of flexibility goes to stock market marketing - not a residual item, but a conscious instrument to benefit from short-term price peaks in favourable market conditions. Anyone who has ever followed a trading day on the electricity exchange knows: Prices can fluctuate significantly within hours. This is not an exception, it is the normal state.
The balance is crucial: Too much fixed price means that we miss opportunities. Too much dependence on the spot market means that we expose investors to unnecessary risks.
How is a PPA negotiated? What are the commercial pain points?
As an energy manager, I negotiate the commercial aspects of the electricity purchase agreements for klimaVest and make sure that the conditions match the fund’s objectives. Such negotiations can take months.
The most important points: Pricing mechanisms for different markets, supply structure, security guarantees, etc. klimaVest does not conclude PPAs with partners with doubts about their ability to pay over 15 or 20 years. A PPA is only as good as the creditworthiness of the contractual partner.
What developments in the energy markets are you most concerned about at the moment?
The fundamental change in the marketing model: The funding system that supported the energy transition in its early phase is being phased out. The following is a market environment in which projects must assert themselves over competitive prices and direct purchase agreements. Only those who actively shape this change can keep their wind and solar farms economically competitive in the long term, and this is precisely a central strategic topic for klimaVest.
Specifically, I observe three developments very closely: Firstly, corporate PPA demand: More and more companies want to source green electricity directly from producers such as klimaVest. Secondly, regulatory changes to subsidy schemes in our markets. And thirdly, the persistent volatility in the spot markets, which will continue for years due to geopolitical upheavals.
The klimaVest portfolio comprises 43 assets in 6 (excluding Luxembourg) countries. How do the marketing strategies differ?
The European electricity market has been consolidated for years with the aim of ensuring a secure and stable electricity supply in the European area. Nevertheless, every market is unique. A solar farm in Spain marketed via the spot market has different challenges than a wind farm in France that is compensated by a state tariff. This requires a separate strategy for each market.
There is also the technology-specific consideration: Wind farms produce significantly more in winter than in summer, and the opposite is true for solar. This affects how PPAs for individual klimaVest assets are structured and what delivery profile they have. Keeping track of this complexity across the portfolio is challenging. But it is precisely this complexity that drives me to my desk every morning.
To conclude: What does professional energy management specifically mean for klimaVest investors?
Energy markets are changing. Without professional energy management, klimaVest would either take too much risk or miss out on opportunities. Both would be unfavourable for investors.
As part of a well-established team, I contribute to ensuring that klimaVest can react quickly to market changes and at the same time ensure long-term earnings stability. These strategies make it possible to achieve the target return in the desired range - regardless of whether the electricity price is currently at a high or low level.
To be honest: It’s an extraordinary job. Working at the interface between markets, politics, technology and climate change mitigation. That’s unique.
