AleaSoft Energy Forecasting, July 24, 2026. Growing renewable penetration, zero and negative prices, demand electrification and the development of energy storage are transforming the business of electricity retailers. Buying energy and passing it on to the consumer is no longer enough. Retailers will have to anticipate the market, manage risk and combine hedges, PPA and batteries to protect margins and offer competitive products.
From energy intermediary to strategic manager
For years, a substantial part of the electricity retail business rested on a relatively simple logic, buying energy on the wholesale markets, partially hedging the risk and offering contracts tailored to different consumption profiles. The current electricity market, however, is far more complex.
Renewable production is increasing price volatility and widening the differences between hours. At the same time, electrical self-consumption is reshaping demand profiles, batteries allow energy to be shifted and demand electrification brings in new consumption that does not always follow traditional patterns.
This shift forces retailers to know more precisely how much energy their customers will demand, when they will consume it, what exposure each contract carries and how the value of the hedges they have bought will evolve.
The retailer of the future will therefore look less like an intermediary and more like an integrated manager of energy risks and assets. Its competitive advantage will depend on its ability to read the market and turn that information into purchasing, pricing, hedging and new service decisions.
Batteries change the product that can be offered to the consumer
Energy storage represents one of the biggest opportunities for retailers. A battery makes it possible to buy or store energy in the lowest-price hours and use or sell it when electricity is worth more. It also helps to reduce imbalances, manage demand and take part in balancing markets and flexibility services.
Its value goes beyond hourly arbitrage. Batteries can help turn variable renewable production into a more stable, manageable product, closer to consumers’ real profile.
This capability will be particularly relevant for industrial electro-intensive consumers. Hedges based solely on photovoltaic production protect consumption during solar hours, which tend to coincide with the lowest prices. A substantial part of industrial risk, however, is concentrated in the afternoon and night hours. Storage makes it possible to shift energy towards those periods and build products better matched to each consumer’s needs.
Hybrid PPA open a new stage
Hybridisation of photovoltaic plants with batteries can also change the role of retailers in PPA. The battery makes it possible to shift part of the solar production, reduce the concentration of delivery in hours of low price capture and improve the contracted energy profile.
For the retailer, a hybrid PPA can supply renewable energy with a curve closer to the demand of its portfolio. This reduces the need to buy additional energy in higher-price hours and makes it easier to build more competitive contracts at a fixed price or with partial hedges.
For the developer, having a counterparty able to value the hybrid profile correctly can improve revenue stability and facilitate the financing of renewable energy projects. Physical PPA, hybrid structures and new contractual formulas are gaining importance precisely because they allow market revenues, long-term contracts and different sources of flexibility to be combined.
Adding a battery does not automatically remove the risk, however. Its value will depend on the operating strategy, hourly price spreads, degradation, the markets it takes part in and technical and regulatory constraints. A retailer seeking to capture that value will need optimisation models and consistent forecasts for every time horizon.
Managing the portfolio with scenarios rather than a single forecast
Volatility has shown that hedging decisions cannot rest solely on the spot price or on the trend of the past few weeks. Retailers need short-, mid- and long-term forecasts, accompanied by probabilistic scenarios and confidence bands.
A central forecast can point to the most likely market path, but on its own it does not show the risk of extreme scenarios. Protecting margins requires estimating what would happen if prices exceed the budget, if the number of negative hours rises, if portfolio demand changes or if a hedge proves insufficient.
This probabilistic view makes it possible to decide what share of energy should be bought forward, how much is worth keeping exposed to the market, when to close a hedge and how to value fixed-price, indexed or mixed contracts.
There is no single procurement strategy valid for every retailer. Each portfolio has a different consumption profile, risk tolerance and set of contractual obligations. Forecasting has to become a tool embedded in the daily management of the margin.
Flexibility and risk as the core of the new business model
The retailer that combines consistent forecasts, hedges, PPA and batteries under a single strategy will be better placed to protect its margins in a market with more extreme-price hours and greater hourly variability. Flexibility and risk management will stop being an ancillary function and become the core of the retail business.
Bankable forecasts for retail, investment and financing: AleaBlue and AleaGreen
In the electricity market now taking shape, a retailer’s success will not depend only on buying energy at the best price. It will depend on its ability to anticipate, structure and manage risk. Forecasts, hedges, PPA, batteries and flexibility will stop being separate tools and become parts of one and the same strategy.
Retailers taking part in PPA and managing batteries and hybrid projects will need forecasts that can be used both in portfolio management and in investment and financing processes.
The short- and mid-term forecasts from AleaBlue, with hourly detail and horizons of up to three years, make it possible to analyse price scenarios, identify hedging opportunities and assess buying and selling strategies.
For investment and financing decisions, AleaGreen, the division of AleaSoft Energy Forecasting, provides bankable long-term price curves, confidence bands and probabilistic scenarios that make it possible to value renewable projects, batteries, hybrid systems, self-consumption and PPA contracts under consistent assumptions on prices, volatility and captured prices.
Source: AleaSoft Energy Forecasting
