### How is profit calculated on a trade?

In your transaction records, you will notice that once a trade has been finalised it will display the total profit made.  This amount will be paid to you on your next bill.  Here is how we calculate the profit amount

There are a few things that affect how the profit is calculated.  This includes:

• The Discover Energy VPP program works on a profit sharing basis.  The profit is shared differently based on which party initiates the trade.  If you initiate the trade, you keep 80% of the profit and Discover Energy keeps 20%.  If Discover Energy initiates the trade, you keep 50% of the profit and Discover Energy keeps 50%
• The wholesale market price per kilowatt hour for the 30 minute interval in which the trade occurred
• even if the discharge event ran for less than 30 minutes, we use the 30 minute price as this is what the wholesale market operates on in Australia
• The amount of electricity discharged from the battery in kilowatt hours.
• this is measured by your smart meter and also by your inverter.
• the "base rate" we pay you per kilowatt hour for energy discharged
• to protect you from losses, Discover Energy will pay you a standard solar feed in rate for any energy discharged from your battery.  This is paid to you as solar feed in on your bill.  The profit counts as anything above and beyond this base rate.

The profit is calculated using the equation below

((wholesale price - base rate) x kilowatt hours discharged) x your share of the profits = profit amount in \$

Here is an example of how that might work.

Anson is a VPP customer of Discover Energy who initiates their own trades regularly.  Last week Anson was on the Discover Energy app and noticed that the spot price was very high so they pressed the sell button and initiated a trade.  Their battery was full at the time as it was a sunny day so they were able to discharge their battery for a longer period.  The trade ran for 27 minutes and a total of 3.5kwh was exported to the grid.  Anson is paid a 25c base rate as per his agreement with Discover Energy.  Once the trade was complete, Discover Energy calculated that the wholesale price for the 30 minute interval was 65c/kwh

From the example about we know the following:

• wholesale price: 65c/kwh
• base rate: 25c/kwh
• kilowatt hours discharged: 3.5kwh
• profit share: 80%

So our equation would look like this

((65-25) x 3.5) x 0.8 = 112c or \$1.12

In this example Anson earned an additional \$1.12 of profit on top of his normal solar feed in.  If we include the base rate we can work out the total amount that Anson was paid by Discover Energy.  The total can be worked out using the equation below.

(base rate x kilowatt hours discharged) + profit amount = total amount paid

From the example about we know that Anson's base rate is 25c and a total of 3.5 kilowatt hours was discharged.  They also made \$1.12 profit on the transaction so our equation would look like this.

(25 x 3.5) + 112 = 199.5c or \$1.99

This means that Anson was paid a feed in rate for the energy they discharged from their battery of 57c/kWh!  You can see why the Discover Energy VPP program is a great way to take control of your energy bills.

If the spot price is below the base rate that we pay when we initiate a trade, there is no need to worry. These trades haven't cost you money.  You are still paid your base rate and Discover Energy will wear the loss.

*Please note: Trades under 25c/kWh that are initiated by the customer will result in a negative "profit", where the trade losses will be deducted from your total trading profit for the billing period.

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