Expert paper | Asset Management for Third Parties expertise: a step forward for ENGIE’s carbon emissions strategy

ENGIE “Global Energy management” (GEM) Business Unit’s energy management offers is a first-class asset for value-creation. It includes physical supply, offtake, cross-border trading, physical and financial risk management, market access, and M&A facilitation for energy producers. With regards to asset management, GEM offers risk and asset management services for 3rd party thermal asset owners (AM3P) allowing them to capture the most value for their flexible assets. As flexible power plants will be required during the energy transition to reduce the imbalances caused by intermittent power from renewables, AM3P offer is part of a decarbonization strategy.
Asset Management for Third Parties expertise: a step forward for ENGIE’s carbon emissions strategy | ENGIE Global Energy Management

The AM3P expertise at GEM

The main purpose of our AM3P expertise is to offer to clients/partners the possibility to optimize their assets the same way as ENGIE does for its own assets. More precisely, it consists in covering the complete value chain from forward - typically 3 years ahead- until the power production and delivery in intraday. This solution is proposed on markets presenting the best asset valorization.

Generally speaking, AM3P expertise includes two separate but complementary parts.

First, there is the Forward Risk Management Agreement part, in which GEM proposes to apply a wide side of risk management solutions, going from tolling agreements to dynamic hedging solutions using forwards or options. Modeling the power plant as clean spark spread options, allows for an optimal market monetization, which has been highly recognized by our clients. The client is in direct contact with GEM’s power asset representation experts, and is offered access to digital web platform -Hedgie - in order to follow all his asset exposures.

The second part is the Short Term Asset Management Service Agreement. GEM offers all necessary services to fully optimize  the asset on various short term market being it day ahead, intraday, ancillary services, or imbalance markets. Those services are representative of a 3rd party asset management structure, where specific and global incentive schemes have been added.

 

How to position ENGIE’s ‘raison d’être’ within the AM3P market

For the last years, ENGIE’s purpose has been to act to accelerate the transition towards a carbon-neutral world, through reduced energy consumption and more environmentally-friendly solutions. 

The gas expertise will play a crucial role to achieve ENGIE’s aim to become the energy transition leader. Thus, offering AM3P to gas fired power assets is a great fit in this strategy. The next step will be to develop the service to technologies that helps accelerating the energy transition such as e-boiler, electrolyser and batteries, which also require state of the art optimization service and market access.

An example quite relevant is the recent business partnership with UMICORE Battery Energy Storage System for ancillary services in Belgium, where ENGIE offered access to the ancillary market, through bidding, nomination, and data exchanges with the TSO.

ENGIE also recently proposed forward hedging and short term optimization services - including Intraday and balancing activities - for Nobian (Nouryon) Delesto 2 power plant of 350MW gas fired in The Netherlands.

 

The future is ahead of us

Targeting a carbon neutrality, GEM is preparing the future of the energy market, thanks to its numerous expertise. we believe to be a liable partner with win-win-solutions to offer.

The future will be different from today’s situation, notably with the intermittent renewable energies like wind and solar, which need to be balanced by other assets. To us, AM3P expertise is one of the solutions to create the balance, currently with conventional energy assets, then with renewable ones.

Our vision is already beyond, as we are aiming for accompanying our clients on their carbon-neutrality journey eventually.