Pexapark has collaborated with green independent power producer (IPP) NextWind to develop an energy trading strategy for its wind farm portfolio in Germany, as part of the company’s preparation for a planned repowering initiative. This partnership is focused on securing stable revenues from the wind farms, which are nearing the end of their regulatory life under Germany’s Erneuerbare Energien Gesetz (EEG) subsidy scheme.
NextWind, supported by Pexapark’s portfolio trading services team, has secured separate route-to-market (RTM) and hedge contracts for a 200MW portfolio of wind farms spread across Germany. These contracts will enable NextWind to continue generating consistent revenue through the period between the expiry of the EEG subsidy and the planned repowering of the site, expected to be completed between 2026 and 2027.
“As NextWind aims to rejuvenate Germany’s aging wind infrastructure, this strategy could see the total capacity of some of the wind farms increase by up to three times, while leveraging the existing grid connections and favorable local wind conditions,” said Werner Suss, Co-CEO and Co-Founder of NextWind.
The agreements aim to mitigate merchant risk during the transition phase, when the subsidy period ends and before the repowering of the wind farms. Repowering, which involves replacing older turbines with newer, more efficient models, is a growing trend in Europe as wind farms approach the end of their operational life. However, challenges remain in completing these projects and maximizing their long-term commercial value.
Pexapark’s role in this collaboration was crucial in identifying an innovative approach to enhance project revenues. The company used advanced software tools to streamline the tendering process, significantly accelerating the timeframe. Jens Hollstein, EVP of Advisory at Pexapark, highlighted that in the German market, both RTM and hedging needs are typically fulfilled through a single contract with an offtaker offering the most attractive balancing agreement. However, this approach often leads to a suboptimal hedging price.
“By separating these contracts, we were able to secure the most attractive balancing contract with one offtaker and the most attractive hedging contract with another,” said Hollstein. “This ultimately resulted in an uplift of between €10 and €15/MWh, compared to a single agreement, significantly enhancing the value NextWind can deliver from the wind farms.
NextWind’s partnership with Pexapark underscores the importance of innovative, data-driven trading strategies to ensure the financial success of repowering projects. Suss added, “We were delighted to work with Pexapark to secure ongoing revenues for this project, laying the groundwork for our upcoming repowering plans and helping to create as much value as possible for our investors and local communities.
