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Danish trader: Power market can ease grid constraints in Europe

InCommodities, a Danish commodity trader, said that better management of renewable assets on a short-term basis and by balancing the markets could help them integrate into Europe's power system overall and counter grid constraints.

Wind and solar power are increasing in Europe, but their intermittent production is a challenge for grid operators. They need to balance supply and demand all the time.

The blackout that occurred in Spain and Portugal last week was a stark example of the challenges facing European power grids. These grids require trillions in dollars of investment to keep up with the growing green energy output.

InCommodities Asset Management, a subsidiary dedicated to the sector and owned by Goldman Sachs, selected investors, and InCommodities itself, was formed in response to the growing demand for specialist services, according the group.

InCommodities Asset Management's CEO Anders Kring said that the demand for risk-management solutions has increased, particularly after the 2022 Energy Crisis, but also because renewable energy is becoming more prevalent in the energy mix.

He was the head of European Power Trading at competitor Danske Commodities (a subsidiary of Equinor of Norway).

Kring stated that given the delays in building power grids across Europe, it is important to optimise renewable energy, as well as the flexibility of the grid with batteries.

He added, "We won't have a brand new grid tomorrow so we will need to make the most of what we already have."

Kring stated that in the meantime, he believes that dedicating resources towards improving forecasts for renewable energy production, developing advanced weather modelling and algorithms to determine how to best utilize batteries will improve the integration of green energy.

"Each time you put money into this, you'll hopefully get better solutions to help you run the grid better," he said.

Investigations are still underway to determine the cause of the blackout on Iberian Peninsula. (Reporting and editing by David Evans; Nora Buli)

(source: Reuters)