Ilmatar is Finland’s first independent power producer (IPP) focused exclusively on renewable energy, with its own in-house power trading operations. We launched our Balance Responsible Party (BRP) activities – meaning the sale of our produced energy and responsibility for balancing – in 2021. At the time, our production volumes were still modest, and outside office hours balancing was handled by an external service provider. In August 2023, we continued our path as an industry forerunner by launching our own 24/7 power trading desk and control room. The year 2025 marked a breakthrough for Ilmatar’s power trading: a significant share of our operational result was generated at the desks of our trading team.
What does power trading mean at Ilmatar in practice?
Power trading is not just about selling electricity. It is continuous decision-making on when, at what price, and in which markets electricity should be sold. Trading takes place both in physical energy markets and in financial derivative markets.
In physical power trading, the clean energy we produce from wind and solar is sold and delivered to the public grid and to high-consumption contract customers under power purchase agreements (PPAs).
Risk management and financial trading, in turn, ensure that power trading remains under control even when prices, weather conditions or markets change rapidly.
“Electricity is always needed. It flows through the grid easily and instantly from production to consumption, without time delay, and transmission network costs are relatively low. But how can electricity be stored? In this respect, electricity differs significantly from almost all other traded commodities. Production and consumption must be balanced at all times. If there is too much production, prices fall; if electricity is scarce, prices rise. Power trading plays a crucial role in optimising this balance”, says Senior Physical Trader Jyri Ylikoski.
Ilmatar operates as the Balance Responsible Party (BRP) for its power trading, meaning we take full responsibility for ensuring that production and electricity sold across different markets remain balanced at all times. Our power trading team continuously monitors electricity demand, production forecasts and market prices, making trading decisions that ensure production creates value for the producer while maintaining grid stability.
How is the value of electricity created in practice?
The value of electricity is determined in the market based on supply and demand – how much electricity buyers need and how much is produced at any given moment. Power trading takes place across multiple markets and time horizons, ranging from decisions made in seconds and minutes to fixed-price contracts spanning up to ten years.
In long-term power purchase agreements (PPAs), the buyer and seller commit to a fixed price for a period such as five to ten years. These agreements provide the producer with a stable revenue stream and the buyer with predictable supply over the long term. As market prices can fluctuate significantly over time, both parties may experience considerable financial benefits or risks. Financial derivatives can be used to hedge against price fluctuations without physically transferring electricity, enabling optimisation of production value from the producer’s perspective.
In the day-ahead market, electricity prices are determined through an auction 24 hours before delivery for each 15-minute interval of the following day. Intraday markets enable trading in 15-minute intervals during the hours leading up to delivery. The Nord Pool power exchange serves as the key marketplace for the Nordic and Baltic regions, and its prices act as a reference for many contracts and derivatives.
In short-term markets, reserve activation is used to rapidly maintain the balance of the power system. Reserves can be activated within seconds or minutes in response to sudden production outages, demand spikes or transmission constraints.
The trading unit continuously monitors reserve needs and market prices and decides when offered capacity should be activated. This allows producers to generate additional revenue from short-term price fluctuations, ensuring that production realises its true value while the power system remains balanced.
In derivative markets, value is created through risk management and price optimisation: for example, producers can sell future electricity in advance using derivatives to protect against falling prices or to benefit from rising prices.
Know-how, luck or magic?
Value creation in power trading is not a matter of luck. It is the result of precise analysis, rapid decision-making and continuous synthesis of information — all carried out in strict compliance with detailed market regulation.
“Our daily work involves monitoring market prices, demand forecasts, production profiles, weather forecasts and many other variables. Decisions that ensure production optimisation and the realisation of market value are made using a range of tools – including artificial intelligence”, Ylikoski explains.
Because electricity production and demand cannot be predicted with complete accuracy, trading requires the ability to react quickly to changing conditions and manage risks. Electricity prices fluctuate constantly depending on weather, demand and grid conditions, and trading seeks to capitalise on these fluctuations to maximise the value of production.
Underlying these decisions is a holistic view: electricity markets, production and grid operations are interconnected from moment to moment. The role of power trading is to ensure that produced electricity is realised at the best possible value – while keeping company risks under control and the power system in balance.
In this way, renewable energy is not just clean production, but actively managed value creation – supporting both the power producer’s business and the functionality of the entire electricity system.
