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Home » “some Environment Friendly Energy Please” How We Buy Electricity Mediamarktsaturn
23.04.2019

“Some environment-friendly energy, please!” This is how we buy electricity at MediaMarktSaturn

Since 2017 MediaMarktSaturn (MMS) procures certified green electricity produced from 100% German hydropower for its stores in Germany. Unlike private households, MMS does not pay standard tariffs to the utility company, but instead buys directly from the energy market via the utility companies. Tobias Brunnhuber, Energy Management Officer at MediaMarktSaturn Germany, describes how this “energy trading” works and why green power is so important for the company.

Following the liberalisation of the energy markets, electricity is also traded on the open market. There are two main markets for these products in Germany: Over-the-counter (OTC) trading and trading via the EEX (European Energy Exchange) in Leipzig.

Any company can, in theory, directly buy and sell electricity. This is economically advantageous, particularly for large companies with high electricity consumption. Electricity is a significant cost factor for these companies. However, for small businesses with low annual consumption, the standardised rates offered by the utility companies are the best option. The electricity supplier is responsible for purchasing and offers the customer basically a "complete service package," similar to that of private households.

Electricity is a key asset for MediaMarktSaturn’s business operations. The markets require electricity for ventilation and cooling, but also for lighting and, of course, for the operation of exhibited electronic products. A reliable, cost-effective and long-term calculable electricity supply is therefore essential.

As a result, the company group purchases electricity and conducts business through its energy partners directly on the OTC market. Tobias Brunnhuber is Energy Management Officer at MediaMarktSaturn Germany. He is responsible for supplying reliable energy to all stores throughout Germany and ensuring that the purchased electricity meets high sustainability standards.

Electricity procurement via OTC trading

The bulk of electricity trade activities is not carried out via the EEX electricity exchange in Germany, rather through so-called “over-the-counter” trading. Via OTC, electricity vendors and buyers conclude a purchase contract directly with each other.

In both cases, a distinction is also made between a spot and a futures market.

  • On the futures market, annual, quarterly and monthly products are traded up to three years in advance. This market serves essentially to hedge against price fluctuations.
  • The short-term demand of the next day is traded on the spot market. This allows us to optimise sales and procurement in the short term.

Stromhandel MediaMarktSaturn

Tobias Brunnhuber buys electricity for MediaMarktSaturn on the futures market up to two years in advance.

“Because electricity prices and availability vary significantly, we don’t buy everything at once but spread the purchases out over up to eight tranches until we obtain 100 percent. The challenge is to find the point at which the electricity price is as low as possible. At that point we notify the supplier to buy a certain quantity of x,” Tobias Brunnhuber explains. By using this method, MMS reduces the price risk in a market where prices can change rapidly.

The professional procurement of electricity requires keeping the markets under daily observation. “There are many factors influencing the price. Currently, the global price of coal and the price of CO2 certificates are the most important influencing factors. China, with its enormous demand for energy, has a direct influence on the price of electricity in Germany, as a considerable part of electricity in Germany is still generated by coal,” says Tobias Brunnhuber.

And just how does one buy green electricity?

The electricity that comes out of the sockets at Saturn and MediaMarkt stores is materially the same as before the switch to green electricity. It corresponds to the German mix of coal-based electricity, nuclear power and renewable energies. The utility company is also commissioned to purchase green electricity certificates in appropriate quantities to ensure that this electricity becomes “green.” That is the usual procedure when purchasing green electricity.

MediaMarktSaturn requires that the green electricity, provided by the supplier, must meet the requirements of TÜV Süd type EE and must be based exclusively on German hydropower. The corresponding certificates of origin are then purchased. MediaMarktSaturn thereby has a clearly defined share in the electricity generated by German hydropower plants.

Why is green electricity so important to MediaMarktSaturn?

KlimaschutzstrategieAt present, one kilowatt hour of green electricity is still more expensive than cheap "grey" electricity. Converting more than 400 German stores to renewable energies (RE) therefore involves costs. For the MediaMarktSaturn Retail Group, however, this has strategic importance. Only by purchasing green electricity can the company group improve its CO2 balance by more than 50 percent. Here's why: currently, more than half of operational greenhouse gas emissions are accounted for by electricity consumption. In addition to systematic energy management, the procurement of green electricity is thus one of the most important measures for MediaMarktSaturn's climate protection strategy.