Balance Responsibility, PPA and other important words about energy strategy

"Balance Responsibility", "PPA" and other important words about energy strategy

When researching energy strategy, you are likely to come across terms like balance responsibility, demand response, PPA, hedging and demand/response. Here you can read more about what they mean and how they can be part of an effective energy strategy.

Balance responsibility is all about ensuring that there is always the best possible balance between electricity consumption and electricity production. This helps to ensure a stable electricity supply.

Mind Energy is among the largest Balance Responsible Parties (BRP) in the Nordics . This means that we play an active role in ensuring overall security of supply, and it means that we are ideally placed to advise customers who want to optimise energy consumption, reduce costs and promote sustainable solutions in their business or organisation.

Hedging and other benefits of balance responsibility

As balance responsible, Mind Energy is close to the market every single day. We have access to buy and sell power directly on the power exchange. This allows us to achieve better prices by optimising purchasing times and gives our customers the advantage of avoiding costly middlemen.

"In addition to the immediate financial benefits of buying your power directly from a balance responsible party, the collaboration also offers a number of obvious strategic advantages,"

says Mikkel Hauge Jensen, Sales Director at Mind Energy.

"Balance responsibility puts us in a strong position for advising on a detailed procurement strategy. For example, we can incorporate hedging agreements that protect against large price fluctuations on the electricity market, and flexible and sustainable solutions can strengthen energy optimisation and competitiveness in a greener future."

Demand/response and consumption flexibility as an energy strategy

Balance responsible companies such as Mind Energy must report their customers' expected electricity consumption for the coming 24 hours to the state company that owns and operates the energy infrastructure in the country in question. These reports form the basis for calculating electricity prices hour-by-hour.

"Because we monitor in real time, i.e. constantly follow and calculate expected electricity prices, we can work with our customers to make consumption flexibility an important and lucrative part of their energy strategy by advising them on when it is most advantageous to buy and use their electricity. And thanks to our balancing responsibility, we are automatically notified when there is a power shortage in the overall grid.

By deploying our innovative demand/response technology, we can then offer customers additional revenue by selling excess power back to the grid,"

says Mikkel Hauge Jensen.

PPAs accelerate the green transition

He emphasises that Mind Energy's advice on optimised consumption flexibility and demand/response are important elements in the green transition to a more sustainable energy supply more dependent on solar and wind.

"As we help secure extra power when it's needed, for example, if wind turbines are not turning or there is suddenly a dense cloud layer over solar farms, it increases the certainty that we can boost the grid with renewable energy sources while maintaining security of supply."

Mind Energy’s Sales Director points to another opportunity for companies and organisations that want to actively contribute to the green transition by promoting sustainable energy solutions: PPA agreements.

PPA stands for Power Purchase Agreement, which ensures customers that renewable energy is produced for the electricity grid corresponding to their consumption.

"In many places it is a requirement that it can be documented where the green power comes from, and we can provide certificates for this, right down to the individual solar farm. A general benefit of PPAs to society is that they provide greater certainty that solar and wind energy can be a good future business, making it easier to obtain financing."

Also useful for the EU taxonomy

Power Purchase Agreements are useful as management tools and documentation for the EU Taxonomy, which is the common set of rules for which economic activities, including energy consumption, can be recognised as environmentally sustainable across European markets.

A PPA is increasingly becoming a kind of 'licence to operate', emphasises Mikkel Hauge Jensen:

"The EU taxonomy means that in the future you are not only responsible for what you do yourself, but also for whether your suppliers, customers and business partners are ESG-compliant in terms of promoting the energy transition."