- As a result of additional auctions for 2025, the Company concluded contracts for 316 MW (out of which 315 MW is DSR capacity) in addition to the previously contracted 10 MW for the same year, ensuring PLN 56.1 million (EUR 13 million) in revenues for 2025.
- Due to the relatively low demand for capacity and recent successful optimisations in the secondary market, the Company opted to withdraw from the auction with a portion of the previously planned volume of 490 MW and to pursue additional contracts afterwards to maximise gross profitability.
- The successful auction results come just before the new ancillary services market opens in Poland, offering potential for additional revenues from flexibility on top of the Capacity Market.
Amsterdam – 21 March 2024 – Photon Energy N.V. (WSE&PSE: PEN, FSX: A1T9KW) (the “Group” or the “Company”) has announced that its subsidiary Lerta JRM Sp. z o.o. (part of the Company’s New Energy Division) has succeeded in the additional 2025 Polish capacity auction with 315 MW of Demand Side Response (“DSR”) capacity and 1.088 MW of renewable generation. With the previously contracted capacity of 10 MW for 2025, the Company’s total capacity obligation of 326.088 MW will ensure PLN 56.1 million (EUR 13 million) in Capacity Market revenues for 2025.
The Additional 2025 Capacity Auctions
On 14 March 2024, PSE S.A. (the Polish Transmission System Operator) conducted its additional auctions for each quarter of 2025. Photon Energy participated and secured 316 MW in capacity, with 315 MW designated for DSR (Demand Side Response) units. Including the previously contracted capacity, the Group’s total maximum capacity contracted with PSE will be 326.088 MW in Q1 2025 and lower in the following quarters. The auction for Q1 cleared in the second round, while Q2, Q3 and Q4 cleared in the eighth round, reflecting a lower demand for capacity in these quarters. Based on preliminary results, the Group secured an average price weighted by volume of PLN 172,168 (EUR 39,892) per MW/year, including the previously contracted capacity of 10 MW, ensuring contracted revenues of PLN 56.1 million (EUR 13 million) for 2025.
Though the contracted volume and revenues may seem lower compared to the Company’s previous declarations, it is a deliberate strategy to maximise gross profit from the Virtual Power Plant business. After a detailed analysis of the auction parameters and potential price paths, the Photon Energy VPP team concluded that the original volume would depress prices to unsatisfactory levels of ca. PLN 85,000 (EUR 19,696) per MW/year. Given recent successes with secondary market optimisations, including purchasing additional capacity obligations, the Company chose to secure higher revenues from lower volumes and subsequently pursue additional transactions in the secondary market. The auction results affirm the effectiveness of this strategy, enabling the Group to secure revenues higher by PLN 18 million (EUR 4.2 million) compared to initial assumptions of 490 MW, while preserving significant potential for additional Capacity Market revenues from the secondary market. The Group intends to maintain its capacity growth, building on the very satisfying volume of 389 MW contracted for 2024, and is currently aiming to reach 430 MW in 2025.
More Potential in New Mechanisms
The auction results are announced less than three months before the new related market opens in Poland, with ancillary services provided by independent market participants. Scheduled to open on 14 June 2024, this market will enable the Company to monetise a significant share of assets currently managed for the Capacity Market by providing balancing capacity and energy during short-term needs. Unlike the Capacity Market, which is a long-term investment incentive and a relatively slow tool for grid support, ancillary services, particularly frequency restoration reserves, offer high availability and close-to-real-time grid balancing tools. This will utilise the assets of independent participants, including aggregators like Photon Energy, and enable the Company to generate significant additional revenues on top of Capacity Market revenues from aggregated energy resources on both sides – generators (CHPs, PVPs, biogas units, etc.) and consumption (behind-the-meter energy sources, batteries, reserve diesel generators, pumps, HVAC, etc.). These innovative tools are being deployed across Europe following the new Electricity Market Design directive, and the Group is preparing to launch in three European markets in 2024: Poland, Hungary and the Czech Republic.
“Being one of the first Demand Response aggregators in Poland allowed us to gain invaluable experience in managing and optimising DSR portfolios for the Capacity Market. The proprietary software technology, tools for optimisation and analytical skills we’ve developed have led us to become one of the biggest and most recognisable aggregators in the market. The auctions conducted last week confirm the fifth year of our presence in the market,” commented Borys Tomala, New Energy Director at Photon Energy Group. “For the first time, due to unfavourable auction parameters and surprisingly low demand from PSE, our success is not well visible immediately after the auctions, and initial observations may even suggest a regression compared to 2024. However, our portfolio is growing every week, and we do not intend to change that – we are confident that the decision to decrease the volumes contracted during the auctions was the best possible one and that we will fill the gap in the secondary market later this year or during deliveries in 2025.”
Growing Business as a Result of Strategic Acquisition
Photon Energy’s Virtual Power Plant business, which includes its participation in the Polish Capacity market and ancillary services, is operated by the New Energy Division, which was established following the acquisition of Lerta in November 2022. By acquiring Lerta, the Group also gained an additional financial pillar, market access and technology for managing distributed energy resources, including controllable generation units and Demand Side Response sites.
“We are eagerly anticipating the launch of Poland’s ancillary services market, which will provide new revenue streams beyond the Capacity Market. This market opening marks a pivotal moment in our industry, empowering us to optimise asset utilisation and deliver even greater value to our clients,” added Georg Hotar, CEO of Photon Energy Group. “With the strategic acquisition of Lerta, we have fortified our position in the energy sector, gaining not just additional financial stability but also enhanced capabilities to manage distributed energy resources. This acquisition aligns perfectly with our growth trajectory, positioning us to capitalise on emerging opportunities such as flexibility markets and to drive sustainable success in the evolving energy landscape.”
About Photon Energy Group – photonenergy.com
Photon Energy Group is a group of companies providing renewable energy, clean water and environmental remediation solutions worldwide. Photon Energy and Lerta provide comprehensive renewable energy solutions, including solar power and energy flexibility. Since its foundation in 2008, Photon Energy has built and commissioned solar power plants with a combined capacity of over 160 MWp and has power plants with a combined capacity of 131.1 MWp in its proprietary portfolio. It is currently developing projects with a combined capacity of 1.2 GWp in Australia, Hungary, Poland and Romania and provides operations and maintenance services for over 700 MWp worldwide. Photon Energy’s Virtual Power Plant aggregates renewable energy generators and consumers with a total capacity of over 420 MW. Photon Energy and Lerta hold electricity trading licenses in Poland, the Czech Republic, Slovakia, Hungary, Romania and Serbia. Lerta is the third largest provider of DSR services to the Polish TSO, with a contracted capacity of 389 MW for 2024. Through Photon Water, the Group offers water treatment and management solutions, and its remediation technology removes PFAS and other contaminants from water and soil. Photon Energy N.V., the holding company for Photon Energy Group, is listed on the Warsaw, Prague and Frankfurt Stock Exchanges as well as Xetra, Germany’s leading online trading platform. Photon Energy Group is headquartered in Amsterdam, with offices in Australia and across Europe.
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