Market Italy

Innovation through tradition

Change in the energy industry has to be driven by innovation. But this does not mean traditional hydropower is obsolete. On the contrary: it is the reliable motor that helps make innovation possible in the first place.

Trading in Milan

From its Milan floor Repower Italy trades in electricity, gas and green power certificates on the domestic and international markets. The main goal of this trading activity is optimising the assets in the company's portfolio, with the trading team responsible for ensuring the best possible deployment of the Teverola combined-cycle gas turbine plant, optimising the use of transmission capacity and managing the customer portfolio.

Last year the Milan Trading unit sold 2.3 terawatt hours of electricity, an increase of 28 per cent by comparison with the previous year. There was also a substantial increase in the volumes of gas traded, with Repower's traders selling 1.9 billion cubic metres (+47% year-on-year).

Three major new innovations dominated Trading in Milan in 2014. As part of efforts to harmonise systems across the group, the Allegro trading platform was implemented for gas trading in addition to electricity. The operating system's analysis, valuation, monitoring and reporting functions assure stability and the smooth execution of trading transactions.

Secondly, in 2014 Repower Italy acquired physical gas storage capacity in the Netherlands for 2015 and 2016. Thanks to its position, the Netherlands is the most liquid gas market in Europe, which is why it is used as the basis for the European gas reference price. This means that having physical storage capacity there brings greater flexibility and security. This investment is of great strategic importance, especially given Repower's plans to increasingly do business in the European markets.

Thirdly, Trading in Milan has started building a portfolio of wholesale customers to be able to sell gas and electricity to wholesalers as well – in particular other sales and distribution companies – who then deliver the energy to their customers.

These three major developments last year illustrate the growing importance of gas in Repower's business. Sales of gas (gas sold to end-consumers and in trading) have increased considerably in recent years (see also the chart on page 7), and in volume terms have now drawn level with the amount of electricity traded.