Power Purchase Agreements (PPA)
The Power Purchase Agreements offers the holder the possibility to conclude directly negotiated bilateral contracts for the sale-purchase of electricity following the entry into force of the emergency ordinance no. 143/2021 amending and supplementing the law no. 123/2012.
Forward and Futures Physical Exchanges
These are contracts for energy trading on the stock exchange with delivery of the contracted amounts at a later date. Typically, these contracts are freely negotiable and require that profits and losses be settled daily through margin payments.
Spot market trading products
On spot markets, the closing price of the market (spot price) determines the price at which the electricity will be sold or bought for the next day, when the payment settlement and delivery will actually take place.
Intra-day trading products
The Intra-day Electricity Market is part of the wholesale electricity market and is dedicated to transactions of firm hourly quantities of active energy for each day of delivery, starting with the day before the day of delivery, so that market participants can adjust their trading portfolio based on the quantities contracted through bilateral contracts, the consumption forecast and the technical availability of the power plants. It is therefore a flexible tool for balancing the contracted surplus or electricity shortage.
SWAP Contracts
Through Swap Contracts, the contracting parties have the option of agreeing to change a fixed price of energy at a variable price or vice versa, for a determined period of time, based on a reference price for the commodity, in this case electricity. So a swap commodity has a floating component (which varies depending on market dynamics) and a fixed component (set in the contract). In general, commodity swaps are financially regularized, even if in some cases the delivery of goods is also expressly provided for.
Options contracts
Swing contracts allow the holder of this option to purchase energy at a predetermined price but in a variable amount. In general, these types of contracts stipulate the minimum and maximum values that can be bought in a given time interval (daily, monthly, etc.), the related price and how many times the option holder can exercise this option during that period. This type of contract helps the buyer, in particular, to adjust the amount of energy required to be purchased depending on his own or his customers’ consumption variations.
Balancing Market
The Balancing Market is a centralized market operated by the Transmission and System Operator (Transelectrica SA), aiming to ensure the stability of the National Energy System, adjusting the amount of energy available on the market (by collecting the Balancing Energy Delivery Offers of the Market Participants) in order to cover the energy demand.
The Transmission and System Operator buys and / or sells active energy from / to the market participants owning dispatcable units/end-users in order to compensate deviations from the programmed values of production and consumption of electricity. Thus, all dispatchable producers are obliged to offer, upon receiving a Power Increase dispatch, the entire amount of available electricity in addition to the notified electricity quantity, and upon receiving a Power Decrease dispatch, the entire amount of notified electricity.
Financial Transactions – Derivatives of Energy (ISDA)
The Framework Contracts proposed by the International Swaps and Derivatives Association (ISDA) contain a series of provisions governing the contractual relationship between the seller and the buyer of a commodity (in particular, electricity) that will apply to each successive individual transaction. The individual confirmations for each transaction are usually limited to the essential information on quantities, prices and delivery periods.