Recently I start exploring power trading segment inside energy industry.
As you may know GS just bought a minority stake in Danish InCommodities AS for around $100m. What do you think will happen next? Do you think we will see some sort of market consolidation and a lot of M&A activities among existing players, maybe big banks and PE players will join the game,… what's your view on future developments?
Can someone also comment on how does small power trading companies like InCommodities and co. make money? I mean they don't own infrastructure such as towers and wires, they don't have own power plants and from my understanding arbitrage opportunities do not exist in this industry in a classical way because you can't store electricity. I am wondering what's their value preposition then? How can they make money by just reselling electricity? How do they buy "electricity" from supplier and sell it to end buyer? I think you can't go to Enel, arrange a meeting with their marketing/sales department and say I want to buy electricity for €500k to be delivered to Poland on 08.08.2021?
Power traders, analysts…actually anyone interested in this topic welcome to comment.