The CHP price index at the EEX describes the income situation of CHP power plants with a base load production and has seen it´s 10 year low in the last quarter.
The CHP electricity volumes are seen as a residual product of the heat production in a power plant with combined heat and power production. In this case the power plant is a must run unit. The CHP index published at the EEX represents the average electricity price at the EPEX spot power exchange of each quarter.
The last quarter price index value was the lowest we have seen in the last 10 years. The reason for this development are on one side the lower spot market prices for electricity due to falling energy commodity prices, lower EUA prices and the increase of the feed-in from fluctuating renewable energy sources.
However, the sector has for a long time ignored the income from the electricity sales, because that income stream was significantly higher than the production costs of electricity. On the other hand, the profit from heat sales have been that high, that this income stream has mostly not been taken care about.
But this situation has changed. The income stream from electricity sale are – as the CHP index shows – been so low, that they have created losses, which cannot be recovered from the heat sales income. In addition, price adaptations are usually in the 10 year heat delivery contracts allowed, if they are covering the costs and the competition side of the heat production and has usually ignored the electricity sales side. To make things a little more complicated, these costs elements must be transparent and understandable for both contract partners.
So taking the CHP price index into account for the heat supply contracts it possible, because the price effect of this index on the costs side as well as on the competition side are reflecting the market reality (if you are looking into the heat pumps).
The future development of the spot market prices and accordingly the CHP Price index does not look very good, so it would be recommendable for CHP producers to make adaptations of their supply contract to integrate this index – in the case price adaptation are possible in the short term
