Deloitte Lithuania conducts the first review of the Baltpool biomass price index
The Baltpool Wood Chips Spot Lithuania (BWCS Lithuania) index published by the energy exchange operator Baltpool is calculated according to the approved methods. This was confirmed by an independent review conducted by Deloitte Lithuania – the first of this type conducted this autumn.
The BWCS Lithuania index, which reflects changes in the price of woodchips and the changing market situation, has been published since 19 March 2018.
In the course of more than one year and a half, the index has become an important instrument for the creation of a transparent, advanced and competitive biomass market in the country.
“The conducted review is a confirmation for exchange participants that the BWCS index objectively reflects the market situation, and we therefore plan to order audits on a yearly basis. Exchange participants can therefore reliably evaluate the changing prices under one-week transactions and it is easier for buyers to forecast prices under short-term transactions and adjust their biomass purchase strategies accordingly,” said Andrius Smaliukas, Director General at the Baltpool energy exchange.
Calculation of the BWCS Lithuania index includes all one-week transactions for the supply of woodchips concluded on the exchange. The BWCS index is published weekly, immediately after trading auctions (on the second business day of each calendar week).
“We are delighted that companies pay increasingly more attention to the reliability of non-financial information. This contributes to the formation of good market practices and also provides auditors with an opportunity to create additional added value for customers and market participants,” said Mindaugas Jukna, Audit and Advisory Director at Deloitte Lithuania.
Starting from the introduction of the BWCS LT index on 19 March 2018 and until mid-November 2019, one third of biomass (239.8 thous. TOE) was sold at the biomass exchange under one-week transactions.
This index was developed based on the Principles for Financial Benchmarks published by the International Organisation of Securities Commissions (IOISCO).
The price fluctuations recorded over the time period since the index was launched were between 117.69 EUR/TOE recorded on 4 June 2019 and 210.78 EUR/TOE recorded on 2 October 2018. The difference between these two values amounts to 44%.
During this heating season, the value of the index increased the most at the beginning of the season and continued to increase until 8 October 2019 (133.48 EUR/TOE); after that date, it consistently decreased and is currently at nearly the lowest recorded value (118.67 EUR/TOE).
To date, 381 participants have registered with the Baltpool biomass exchange. Most of the foreign partners are from Latvia (62). Baltpool operates in Lithuania, Latvia, Estonia and Poland. It also, via its partners, operates in Denmark and will start operations based on the same principle in Finland in 2020.