When purchasing Virtual Power Plant (VPP) capacity the buyer has a right, but not an obligation to purchase power at a fixed price, being the energy price. The power is delivered to the Denmark West price area, high-voltage grid.

The VPP capacity is offered at four auctions each year. Each buyer can acquire maximum 50 % of the capacity offered. At the auction the following total capacity is offered:

2006: 250 MW
2007: 500 MW
2008: 600 MW

The VPP capacity is distributed in the following supply periods in which the VPP capacity can be used:

3 months - from 1 January 2006
12 months - from 1 January 2007
36 months - from 1 January 2007

When using the VPP capacity an energy price is paid. The price is fixed throughout the supply period, and it is determined ahead of each auction. The calculation of the energy price in EUR/MWh is based on DONG Energy DONG Energy Power's most cost effective power plant in price area DK1 and depends on fuel prices and exchange rates among other things.

Setting the option price
The VPP option price is the price in EUR per MW per month of owning the VPP capacity in the supply period and it is determined at the auction. The option price is paid regardless of whether electricity is produced whereas the energy price is paid only upon production of electricity. There is no minimum option price.

Nomination

VPP owners must decide on an hourly basis how much energy is to be delivered for the following day. Each VPP owner must nominate power to an independent Nomination Aggregator which informs DONG Energy Power of the aggregated hourly deliveries of power.

Nord Pool Spot AS has entered into an agreement with DONG Energy Power to perform the role of Nomination Aggregator. Nord Pool Spot AS will thus be the counterparty to the VPP owners concerning the nomination and delivery of power. For more information please visit www.nordpool.com.

Nomination deadlines for day-ahead (24h) deliveries:
1) Nomination before 2 pm. The hour-to-hour deviation may not be more than 40 % of the maximum capacity of the VPP product owned by the VPP owner. Nord Pool's spot prices are known, and therefore it is possible to combine the nomination with price dependent bids on the spot exchange.

2) Nomination before 11 am. Full hour-to-hour flexibility.

The VPP owner may renominate a nomination up to the relevant deadlines, such renomination overrides any previous nomination. However, if a renomination varies on an hour-to-hour basis by more than 40 % of the maximum capacity of the purchased VPP product, the VPP owner may not renominate after 11 am.

Please note that the product specifications are for information purposes only. Detailed information may be found in the Confidential Section of this website.