Energy trader ElectroRoute slips into loss amid price volatility

Energy trader grappling with volatile power markets

ElectroRoute, the Irish energy trading and services owned by Japan’s Mitsubishi Corporation, fell into a net loss of €6.5 million in the year to March from a profit of €49.1 million for the previous year as grappled with unprecedented volatility on global power markets.

The swing was driven by mark-to-market valuations of energy contracted to be delivered at a future date. The extraordinary level of profits for the previous year had been down to a spike in market prices in the aftermath of Russia’s invasion of Ukraine in February 2022.

The company said that the extent of volatility on market prices in the past two years meant that the financial performance “need to be considered together” and to give “a truer reflection of the underlying performance of the group”.

“Looking at the last two years in aggregate, we are satisfied with the financial performance and our realised profits across a period of volatility,” said Ronan Doherty, executive director of ElectroRoute.

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Founded in 2011, ElectroRoute has grown rapidly to now employ around 120 energy professionals located in Ireland, the UK, Europe and Japan. ElectroRoute’s trading team operates 24/7 to provide essential trading services to renewable assets including wind farms, solar farms, and batteries in 15 separate energy markets.

Last year, the company announced plans to add over 50 jobs, as part of its medium-term growth plans, to be located in Japan and Ireland. It has since hired 18 new people in Ireland and 17 in Japan.

Mitsubishi Corporation, which took an initial 60 per cent stake in ElectroRoute in 2016, before taking full ownership in July last year, provided the Irish business with €300 million of debt facilities during previous financial year to keep expensive, but highly profitable, trading positions open during the height of pricing volatility. It has since repaid most of the facility.

ElectroRoute has, in recent times, been developing a business in Mitsubishi’s home market in Japan, which has only been liberalised since 2016 and is about a decade behind the European market in terms of the ability to trade power.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times