Vattenfall – a ‘fresh’ new player in the UK supply market

Vattenfall is building on its renewable energy investments to offer a green power product to the UK B2B market
Published: Mon 29 May 2017

Swedish power giant Vattenfall has long been an investor in renewable energies, particularly wind, in the United Kingdom.

Now the company is entering the supply market with an offering targeting large business customers. According to a statement, the green power product will help business customers with high demand reduce their carbon footprint.

“This is the first time that Vattenfall is making a B2B retail offering in the UK,” commented Anna Borg, Vattenfall’s new Head of Business Area Markets in the statement. “We are able to do this because of our investment in British wind capacity since 2008.”

It also marks a slightly different approach for Vattenfall, when it entered Denmark’s consumer market late last year with the acquisition of the energy sales company Vindstød.dk, based on the strategy of entering new markets through small and innovative sales companies with an existing customer base.

B2B market

Vattenfall has named the new product FRESH – standing for Flexible, Renewable Electricity, Supplied Honestly and styling it as a ‘fresh’ approach to electricity supply.

FRESH comprises a range of flexible and fixed price options to suit different consumption profiles and different levels of customer engagement with their energy management. Contracts are from one to five years in duration.

‘Fix’ offers fixed energy prices across an entire portfolio of meters for the duration of the contract. 15% annual tolerances are available as standard to permit changes in consumption at the same price. Vattenfall manages all commodity, shaping and balancing costs.

‘Flex’ enables the customer to fix all or part of their energy costs and to add or remove sites when they want. The same tolerances and management of costs as Fix are included.

‘Flex Manager’ puts the customer in control of electricity purchasing for their entire half-hourly metered portfolio, enabling them to match their power purchase and consumption profile. Sites can be added or removed at any time and there are no volume restrictions. Vattenfall manages any balancing cost in its balancing fee.

‘Flex Manager+’ is similar to Flex Manager but allows minimisation of balancing costs with day ahead forecasting of consumption. Balancing costs are passed through at system prices.

With the flexible offerings, electricity is purchased at wholesale market prices using base and peak products via Vattenfall’s online trading portal.

Vattenfall started marketing the products to potential customers during May and will make them available from October 1.

UK wind

Vattenfall started to significantly invest in the UK energy industry in 2008 after buying three wind businesses. From a 90MW start in 2008, Vattenfall has invested nearly £3bn in the UK. From 2018, the company will operate over 1GW of installed wind capacity, meeting the equivalent annual demand of over 650,000 UK households.

On its website Vattenfall lists eight operational wind farms in the UK – both onshore and offshore – and a further 14 wind projects at various stages of development.

Among the former is one of its largest – the 300MW Thanet offshore wind farm located off the southeast coast, which was completed in September 2010.

However, this could be dwarfed by the proposed 1.8GW Norfolk Vanguard and Norfolk Boreas wind farms off the coast of East Anglia.

Vattenfall also lists one operational solar project, the Parc Synog solar farm in southwest Wales, which came into operation in March 2016. Located adjacent to the Parc Synog wind farm, the project is notable in combining both wind and solar on one grid connection.

In 2016, Vattenfall indicated a plan to invest a total of €5bn in wind power generation by 2020.

Energy storage for grid services

In addition, the company is developing a 22MW battery facility at its recently completed Pen y Cymoedd wind farm site in south Wales – Wales’ and Vattenfall’s largest onshore wind farm – which was awarded by National Grid to provide enhanced frequency response service to the network. Construction is expected to start during Q3 and for the facility to be completed by Christmas and to come into operation in February 2018.

Commenting on the project, Gunnar Groebler, Vattenfall’s Head of Business Area Wind, said: “This is Vattenfall’s biggest battery project to date and we think it is part of a smart transition to a fossil free Britain and Europe. We have ambitions for more batteries at our wind farm sites across Europe and so I hope that battery@pyc will herald more storage facilities in the UK.”

The batteries will be supplied by BMW, with which Vattenfall has been working on various storage projects in Europe involving both new and second life batteries. In March, the companies signed an agreement for the supply of up to 1,000 lithium-ion batteries this year. The batteries, which are also used by the car manufacturer in their BMW i3 model, have a capacity of 33 kWh and are equipped with a BMW-owned battery control system.

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