Alpiq Holding AG (ALPH), Switzerland’s largest energy producer, plans to focus on cross-border power in Poland as local electricity forwards are “frozen,” according to the head of its Polish trading desk.
The local unit of the company is changing its strategy amid low liquidity and volatility in Polish power trading, Krzysztof Bonk said in an interview in Warsaw.
Polish utilities, the largest sellers, are focused on winning orders from end-users, Bonk said. Power prices in Poland are cheaper and more stable than contracts in the neighboring Czech Republic and Germany. Traders rely on volatility to generate profit.
“I think that local power groups are focused on end-users rather than trying to compete on the European market, where forward prices are volatile,” Bonk said.
Polish power for 2012 last traded on Dec. 2 at 202.70 zloty ($57.99) a megawatt-hour, according to broker data compiled by Bloomberg. The difference between its highest and lowest price was 0.3 percent of the average since the start of November, compared with 6.4 percent in the Czech Republic and 7.7 percent in Germany. German baseload power for next year traded at 52.60 euros ($68.35) on Dec. 2 and the Czech contract was 51.70 euros.
Alpiq plans to focus on cross-border trade between Poland and the Czech Republic, Germany and Slovakia and offer power portfolio management services to its clients, Bonk said.
In early October, Alpiq won a tender for capacity to import as much as 215 megawatts of electricity through a cable between Poland and Ukraine this quarter.
While the link was used in the second half of November, when Polish day-ahead prices averaged 251.33 zloty per megawatt- hour, flows halted in December, according to data from the power grid operator PSE Operator SA, as next-day electricity fell by more than 20 percent this month.
“Imports are also unprofitable in terms of forward contracts as Ukrainian power is 6 to 7 euros more expensive per megawatt-hour,” Bonk said. “Power in Poland would have to cost over 50 euros per megawatt-hour to make imports profitable.”
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