Renewables & Renewable Energy Trading

The global attitude towards energy, emissions and the climate have become headline news globally in recent years and as the globe moves towards more sustainable energy sources, renewables have become an increasingly traded commodity within power and many firms have set up to specifically service this market and support the use of renewables. 

Renewable energy has seen significant investment in recent years with almost 300bn USD invested in renewable technologies in 2015 alone.  Norway and Iceland lead the way in renewables and already produce 100% of their energy needs through renewable sources. 

Imperium Commodity Search has worked with certificates providers, advocates and producers of renewable energy and continue to stay involved in the market as it continues to impact the global electricity space and make waves in the power trading markets. 

What are Renewables?

Renewables / Renewable Energy refers to energy generated from renewable sources that are naturally replenished and do not ‘run out’ like fossil fuels (Crude, Natural Gas, Coal etc.).  Renewables are growing in their market share across energy production globally and look set to continue this as the demand for sustainable energy production grows further. 

Biomass is the largest contributor to global renewable energy consumption at present, although its classification as a renewable is up for debate.  The EU and UN agree that biomass is a renewable energy due to its neutral or negative CO2 impact.  Biomass refers to plant or animal matter/material used for energy production.  Often used as a mixer of feedstock in conventional energy production, such as coal, there are also biomass plants that specifically produce biomass energy through the burning of plant based fuels.  Most biomass is from wood or wood pellets with the rest from food waste, agricultural off-take and manure.  Biomass accounts for around 9% of the total power consumption globally. 

Hydroelectricity is the second largest consumed renewable energy source and is produced by spinning turbines turned by fast flowing or falling water.  Hydropower dates back to ancient times when watermills were used for irrigation and the operation of mechanical devices.  In modern times, most hydroelectric production is from dams which create reservoirs and harness the power of fast flowing / falling water.  These facilities produce a huge amount of electricity and the 5 largest power stations in the world are all hydroelectric ones.  Hydro accounts for around 4% of global consumption. 

Wind power is a well known renewable and is harnessed by large spinning turbines.  Wind power is often generated in wind farms; large groupings of wind turbines in an area with high amounts of wind.  Turbines are a contentious form of power due to the size of the turbines required to generate suitable returns of power and environmental issues with birds getting killed by the blades.  It is estimated over 300,000 birds are killed in the USA alone each year due to wind turbines.  Wind is a fairly inexpensive form of electricity production and requires only interim maintenance to keep them functional.  Offshore wind farms are popular as a generation source due to the lack of NIMBY effects and higher yield.  

Solar Power is the process of converting sunlight into power/electricity through the use of solar panels.  Solar power can be concentrated by using a series of mirrors and lenses to concentrate sunlight and heat to increase the generation of power from sunlight at specialist solar farms.  Solar power requires little maintenance and panels can last up to 40 years.  The cost associated with solar power has dropped drastically over the last 10 years as advancements in technology have allowed for cheaper production of panels and a higher supply. 

Geothermal electricity is produced by tapping into hot underground reservoirs of water which release steam through heat trapped in the earths crust.  This steam is used to turn turbines, generating power in an environmentally friendly way.  Some greenhouse gasses are released during this process that were previously trapped in the earth however this is marginal when compared to the gasses produced in conventional energy production methods. 

Storage is important with renewables due to their sporadic supply rates.  As renewable energy is reliant upon wind, sunlight and water flow it is difficult to predict a static output.  When energy is oversupplied it is important that this is stored ready for use during periods of lower supply such as low wind/sunlight seasons.  This energy is returned to the power grid when demand outstrips supply.  Hydropower reservoirs are the most common form of storing energy however some wind and solar panel is stored in lithium batteries.  It looks as though this method of storage will increase as the price of lithium batteries reduces further.  Many homes that produce their own renewable energy use lithium-ion batteries to store their oversupplied power. 

How are Renewables traded? 

Renewables go into the grid in much the same way as conventional power and are traded on the markets as part of the overall power trading landscape.  Power is traded differently to other commodities and securities due to the nature of the product.  Electricity is a live market.  Supply and Demand need to be constantly balanced in real time to ensure the markets liquidity.  Unlike other commodity markets, power markets require a much higher level of knowledge and understanding of the product.  As a result, the barriers of entry to power markets are higher than most and tend to be dominated by experienced traders.  

Due to the nature of the supply and demand of electricity and power markets, there is huge volatility in spot prices.  As a result, most traders use the DAM (Day Ahead Market) to hedge against the quick volatility of prices.  

Who produces the most Renewable Energy? 

Renewable Energy is a constantly growing market and Norway and Iceland already only use renewable energy to power their countries.  In terms of total production of renewable energy, these are the top 5:  

China (545GW/year)
China is home to the worlds largest power plant, the 22.5GW Three Gorges hydroelectric dam.  Outside of Hydro, China produces 150GW of wind power and 75GW of solar power each year and is continuing to grow these numbers.

USA (214.7GW)
The US has over 50,000 wind turbines in operation and a collection of large solar farms in and around California, generating over 200GW of power each year.  Construction of both wind turbines and solar farms continues at pace as costs of production and maintenance continue to subside.

Brazil (123GW)
Brazil is a large producer of hydropower and over 3 quarters of its renewable production is from hydro sources.  The remainder of production is accounted for through solar and wind power.  Brazil is also a leading producer of biofuel and biomass.

Germany (105GW)
Germany is Europe's leader in terms of renewable production and has the largest wind power production by GW in the continent.  The European powerhouse is continuing to invest in wind power and is growing its wind output by 1-2GW per year.

Canada (97GW)
Canada's production of renewables is reliant primarily on hydropower with a capacity of 81GW per year through dams and hydro installations.  Wind power accounts for around 11GW and solar for 3GW.

Largest Solar Power Producers: 

China (67,000GWh)
Japan (51,000GWh)
USA (50,000GWh)
India (39,000GWh)
Germany (38,000GWh)

Largest Hydropower Producers: 

China (1,500,000GWh)
Canada (387,000GWh)
Brazil (380,000GWh)
USA (292,000GWh)
Russia (186,000GWh)

Largest Wind Power Producers: 

China (242,000GWh)
USA (230,000GWh)
Germany (79,000GWh)
India (62,000GWh)
United Kingdom (50,000GWh)

Largest Biomass Power Producers: 

USA (69,000GWh)
Brazil (51,000GWh)
Germany (50,000GWh)
China (49,000GWh)
United Kingdom (32,000GWh)

Who are the key players?  

Many majors (oil/gas) are looking into and developing renewable energy sites as pressures grow to do so, however the largest publicly traded renewable companies tend to be pureplay renewable generation firms.  The largest (by market cap) are: 

NextEra Energy (103bn)
Tesla (42.1bn)
First Solar (6.7bn)
Brookfield Renewable Partners (6.4bn)
SolarEdge Technologies (3.9bn)

Imperium Commodity Search – Specialist Headhunter to the Global Renewable Energy markets

Imperium Commodity Search and her consultants have experience working across the power sector in a range of markets and positions.  Our consultants take pride in keeping up to date on the markets and positioning themselves to respond quickly and accurately to market movements.  

If you are interested in finding out how we can assist you in finding your next opportunity in the renewable energy space or are growing your trading team and looking to identify/source top talent, then please call us now on +44 (0) 203 927 5090 or register online here and one of our Power Recruitment Search Consultants will contact you ASAP.

To view our current power and energy trading, operations and support vacancies click here or contact one of our consultants to discuss current careers / jobs in renewable energy and power trading to discuss your needs in more detail. 

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