Category: Press

Leading Global Organizations Launch New Consortium to Assess Climate Benefits of Energy Storage

Wind power

The Energy Storage Solutions Consortium will develop a first-of-its-kind methodology to quantify the greenhouse gas emissions benefits of stored energy usage.

REsurety logo
Broad Reach

Sept. 14, 2022 (Menlo Park, Calif.) – A group of leading organizations, including Meta, REsurety, Broad Reach Power and others, has announced the formation of the Energy Storage Solutions Consortium, a consortium to assess and maximize the greenhouse gas (GHG) reduction potential of electricity storage technologies. The group’s goal is to create an open-source, third-party-verified methodology to quantify the GHG benefits of certain grid-connected energy storage projects, and to ultimately help add a tool for organizations to create credible progress toward their net zero emissions goals.

Once approved by the third-party Verra through the Verified Carbon Standard Program, the standard would be the first verified methodology to quantify the emissions benefits of large-scale energy storage facilities, and would provide valuable guidance such as when to deploy stored energy to deliver maximum emissions reduction benefits. 

“At Meta, we are committed to accelerating the transition to the carbon-free grid of the future, and large-scale energy storage is a critical part of that transition. Having achieved 100% renewable energy for our global operations, we are now looking to help move the energy storage industry forward by addressing next-level challenges and opening pathways that will help drive high impact emissions reductions on the grid,” said Peter Freed, director of energy strategy at Meta. “We are excited to launch this consortium in partnership with these industry-leading organizations, who will bring diverse perspectives and experience to the development of a robust, transparent methodology.”

“We need to decarbonize the grid as quickly as possible, and to do that we need to maximize the emissions impacts of all grid-connected technologies – whether generation, load, hybrid or standalone storage,” says Adam Reeve, SVP of software solutions at REsurety. “Enabling this sort of decarbonizing activity is the exact reason why we invested in developing high-resolution Locational Marginal Emissions. Energy storage is a technology that has huge potential, and we’re delighted to partner with industry leaders in this forward-thinking and collaborative effort to develop a global standard for energy storage benefits.”

“Battery storage will play an increasingly important role in delivering reliable and affordable power to homes and businesses as we move toward a 100% renewable energy grid. As the leading utility-scale battery storage platform in the U.S., we’re looking forward to working with other industry leaders to be able to quantify the important GHG reduction benefits of large-scale energy storage facilities and help organizations take climate action,” says Paul Choi, EVP of origination at Broad Reach Power.

In order to calculate the GHG benefits of large-scale energy storage facilities, the consortium will leverage locational marginal emissions. This concept measures the tons of GHG emissions displaced through the charging and discharging of energy storage facilities on the grid at a specific location and point in time.

In addition to steering committee members Meta, REsurety and Broad Reach Power, the consortium includes a number of advisory committee members. These advisory members include leading technology companies, emissions data providers, investors, storage developers and service providers, and non-governmental organizations among others.

Members include:
3Degrees Group, Inc., Akamai Technologies, Clearloop, Equilibrium Energy, Fluence, General Motors, GlidePath Power Solutions, Habitat Energy, Hannon Armstrong, Jupiter Power, Longroad Energy, Marathon Capital, Microsoft, Primergy Solar, Quinbrook Infrastructure Partners, RES Group, Rivian, Rowan Digital Infrastructure, Stem, Tabors Caramanis Rudkevich, TimberRock, UBS Asset Management, and WattTime.

The Energy Storage Solutions Consortium is also partnering with Perspectives Climate Group, the German consultancy dedicated to helping its clients achieve net zero GHG emissions and to developing practical solutions for accounting of emission reductions from innovative climate- friendly technologies.

About Meta Platforms, Inc.
Meta builds technologies that help people connect, find communities and grow businesses. When Facebook launched in 2004, it changed the way people connect. Apps like Messenger, Instagram and WhatsApp further empowered billions around the world. Now, Meta is moving beyond 2D screens toward immersive experiences like augmented and virtual reality to help build the next evolution in social technology. about.facebook.com

About REsurety
REsurety is the leading analytics company empowering the clean energy economy. Operating at the intersection of weather, power markets and financial modeling, we enable the industry’s decision-makers to thrive through best-in-class value and risk intelligence, and the tools to act on it. For more information, visit www.resurety.com or follow REsurety on LinkedIn.

About Broad Reach Power
Broad Reach Power is the leading utility-scale battery storage platform in the United States. Based in Houston, Broad Reach is backed by leading energy transition investors, EnCap Investments L.P., Apollo Global Management, Yorktown Partners and Mercuria Energy. The company owns a 21 GW portfolio of utility-scale battery storage and renewable power projects across the U.S., giving utilities, generators, and customers access to technological insight and tools for managing merchant power risk so they can better match supply and demand. For more information about the company, visit www.broadreachpower.com.

Media Contacts

REsurety
Tara Bartley
[email protected]
(774) 232-1220

Broad Reach Power
Morgan Moritz
[email protected]
(512) 745-2575

Meta
Stacey Yip
[email protected]
(650) 407-0610

White Paper: Making It Count

Updating Scope 2 accounting to drive the next phase of decarbonization

Authored by David Luke Oates, Senior Vice President of Power Markets Research, REsurety

Dr. Oates holds a Ph.D. in Engineering and Public Policy from Carnegie Mellon University and a Bachelor’s degree in Engineering Physics from Queen’s University, Canada.

EXCERPT: Corporations are increasingly focused on reducing their carbon footprints by decarbonizing the electric grid. While solar and wind energy development have rightly been a mainstay of these efforts, there is growing consensus that producing more clean energy alone isn’t enough. To maximize grid decarbonization, clean generation needs to occur at times and locations where its output displaces the highest-emitting resources. Consumption timing and location should be adjusted to minimize its carbon emissions via siting decisions, demand flexibility measures, and energy efficiency. And energy storage is needed to manage grid congestion and mismatches between clean supply and demand.

Effective carbon accounting frameworks can help coordinate these complex mitigation strategies by allocating emissions among the entities responsible for producing them. These accounting frameworks attempt to ensure that activities with more impact on actual emissions have more impact on carbon accounts. Given the large and increasing interest of investors, customers, regulators, and governments in corporate decarbonization initiatives, effective carbon accounting frameworks can encourage corporations to maximize their actual carbon reductions.

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Options for EIA to Publish CO2 Emissions Rates for Electricity, as published by Resources for the Future

The path toward decarbonization in the United States entails not only a mix of federal, state, and local government policies promoting clean energy, but also voluntary efforts by the private actors to reduce their CO2 emissions.

Authored by Karen Palmer, Brian Prest, Stuart Iler, and Seth Villanueva

Resources for the Future reviews use cases for emissions rate data and different options available to the Energy Information Agency for publishing data on both average and marginal emissions rates. Existing methods and data sources, such as REsurety’s Locational Marginal Emissions data, are discussed and evaluated. Read the executive summary excerpt below.

Excerpt:

Decarbonization efforts in the US consist of a mix of government policies to promote clean sources of energy and improve energy efficiency and voluntary actions by private actors to reduce their CO2 emissions. Understanding both the likely and actual benefits of both policies and private actions requires information about the carbon intensity of different sources of energy including electricity. Demand for data on the CO2 intensity of US electricity production and consumption is growing as governments and private companies seek to understand the emissions effects of both their electricity consumption and their clean energy investment choices. Emissions rate information is also important for Scope 2 emissions accounting under the GHG Protocol Corporate Standard1 that provides a way of tracking progress toward clean energy targets that many companies have declared.

The desire for transparent and consistent data on electricity emissions rates led the US Congress, in the Infrastructure Investment and Jobs Act (IIJA), to call for the US Energy Information Administration (EIA) to publish spatially and temporally granular electricity emissions rate data, beginning in late 2022. Specifically, the IIJA calls on EIA to report on hourly operating data, including “where available, the estimated marginal greenhouse gas emissions per megawatt hour of electricity generated” within each balancing authority and by pricing node. The law also calls on EIA to harmonize its electric system operating data with GHG and other relevant data collected by EPA or other federal agencies, as well as data collected by state or renewable energy credit registries. The resulting integrated data set should include net generation data and “where available, the average and marginal greenhouse gas emissions by megawatt hour of electricity generated within the boundaries of each balancing authority,” to be offered on a real-time basis through a publicly accessible application programming interface (API).

Read the full report on Resources for the Future’s website.

REsurety unveils renewable energy toolkit for portfolio management

Solar Wind Energy

Clean energy buyers and investors utilize the best-in-class SaaS to forecast, audit and explain the financial and environmental outcomes of clean energy projects and contracts

BOSTON, June 28, 2022 – REsurety, Inc., the leading analytics company empowering the clean energy economy, today announced a new SaaS analytics toolkit, REview. It’s the latest addition to the company’s software suite, which harnesses massive project performance and high resolution weather datasets to give clean energy buyers and investors a unique view into the financial and carbon emissions impact of the projects in their clean energy portfolios. 

The new toolkit extends REsurety’s existing market intelligence SaaS product capabilities by providing insight into customer-specific projects and specific contracts. REview customers can use the tool to analyze how their contracts are performing, what risks they hold, and how settlement is expected to occur over the coming months and years. The tool provides a breakdown of drivers of financial, operational, and carbon emissions performance, both at the hourly and aggregate level. 

Rich Santoroski, Chief Risk Officer and Co-head of Portfolio Management for Hannon Armstrong
Rich Santoroski

“We are pleased to incorporate REsurety’s dynamic new tool in service of our commitment to innovative client solutions,” said Rich Santoroski, Chief Risk Officer and Co-Head of Portfolio Management for Hannon Armstrong, and a Board member of REsurety. “Like their entire set of software applications, REview offers superior data with actionable insights to evaluate new renewable energy investments and monitor asset performance.”

REview delivers several unique benefits to customers: data speed and transparency, locational marginal emissions (LME) integration, and fundamentals-driven, scenario-based forecasting. REview provides high accuracy estimates of project and contract performance long before project data is typically provided; an independent and granular view of settlement and operational performance; and it’s the only tool on the market that measures both project-specific carbon emissions performance alongside project-specific financial performance. 

Lee Taylor, CEO of REsurety
Lee Taylor

“REsurety is excited to empower sustainability leaders with the insight and confidence they need to continue accelerating their investments in the clean energy-fueled future,” said REsurety CEO Lee Taylor. “Full visibility into project performance – both financial and environmental – and high confidence in the value and risk of future results is key for the long term success of this industry.”

For years, REsurety has used its proprietary data and analytics to accurately model the project output, carbon emissions impact, and financial value of clean energy generation. The new subscription service leverages these models and makes the insights they enable accessible to corporate buyers or investors through just a few clicks.

Screenshot of REsurety's new analytic tool, REview
REview helps customers understand settlement impacts potentially caused by a project’s operations by comparing modeled settlement to actual settlement.

Information about REview and its applications can be found here.

REview is currently in private launch with leaders in clean energy procurement, investment, and trading. General availability beyond the private launch is expected later this fall.

Companies may request an online demo of REview from an expert on the REsurety team by contacting [email protected]. Members of the news media may arrange for a demo by contacting Tara Bartley, [email protected]

About REsurety

REsurety is the leading analytics company empowering the clean energy economy. Operating at the intersection of weather, power markets, and financial modeling, we enable the industry’s decision-makers to thrive through best-in-class value and risk intelligence, and the tools to act on it. For more information, visit www.resurety.com or follow REsurety on LinkedIn


Disclaimer.

Decarbonizing the Datacenter, as published in the Wall Street Journal

Solar Energy

EXCERPT:

Solar Energy

Microsoft, which operates a global network of datacenters for its cloud services, has a long-term vision that by 2030, 100% of its electricity consumption, 100% of the time, will be generated from zero-carbon sources. This “100/100/0” commitment recognizes not only the critical obligations Microsoft has as a major consumer of electricity, but also the opportunities that come with it, says Brian Janous, general manager of energy and renewables at Microsoft.

Microsoft, which operates a global network of datacenters for its cloud services, has a long-term vision that by 2030, 100% of its electricity consumption, 100% of the time, will be generated from zero-carbon sources. This “100/100/0” commitment recognizes not only the critical obligations Microsoft has as a major consumer of electricity, but also the opportunities that come with it, says Brian Janous, general manager of energy and renewables at Microsoft.

In the U.S., Microsoft has partnered with clean energy analytics company REsurety to help develop tools capable of calculating emissions at each node along an electric grid. First piloted in Texas, these measurements of Locational Marginal Emissions (LMEs) help companies trying to decarbonize better understand the sources of the power they use on a granular level, then measure the impact of clean energy use and adjust power practices accordingly.

Read the full article in the Wall Street Journal.

The Enhancement and Standardization of Climate-Related Disclosures for Investors

Wind Energy

REsurety’s letter to the Securities and Exchange Commission Re: File No. S7-10-22, dated June 17, 2022

AN EXCERPT:

On behalf of REsurety, Inc., a leading analytics provider in the clean energy economy, we are writing in support of File No. S7-10-22: The Enhancement and Standardization of Climate-Related Disclosures for Investors. We also suggest two specific language refinements to improve the accuracy and transparency of Scope 2 emissions disclosures.

Anticipated Value of the Proposed Rule

For the last 10 years, REsurety has helped our clients understand the risks and value of buying and selling electricity from clean energy projects. Many of our clients develop renewable energy projects, have made voluntary public GHG reduction commitments, or own assets exposed to climate-related risk. The SEC’s proposal to require detailed climate-related disclosures has the potential to benefit our customers, as well as the public and the planet. By requiring disclosures from a large category of companies, the proposal protects investors from unintentional exposure to climate-related risk. By standardizing disclosure requirements and requiring attestation, the proposal can also help substantiate GHG reduction claims. In short, the proposed rule has the potential to increase efficiencies in capital markets, boost investor confidence and encourage companies to take effective climate action at scale.

Challenges with the GHG Protocol

While we strongly applaud the SEC’s aims, we are concerned about the pivotal role the GHG Protocol plays in the SEC’s proposal, particularly with respect to Scope 2 emissions disclosures. The proposed GHG emissions disclosure requirements are based “primarily on the GHG Protocol’s concept of scopes and related methodology”.1 The proposed rule cites the GHG Protocol Scope 2 Guidance as a methodological source for determining Scope 2 inventories.2

The GHG Protocol Scope 2 Guidance allows reporting entities to select from an extensive hierarchy of emissions factor data to calculate their footprints. Application of some of these emissions factors would result in footprints that differ materially from actual GHG emissions. For example, the current Scope 2 Guidance lists Renewable Energy Credits (RECs) as the highest-quality “emissions factor” data type but takes no position on where or when RECs are produced relative to their consumption. An entity consuming power in a coal-heavy grid could eliminate its Market-Based Scope 2 footprint by purchasing sufficient RECs from a very clean grid, even when such a purchase would have a negligible effect on actual GHG emissions.

By relying on average emissions factors, current Scope 2 guidance also risks sending signals to registrants that are at odds with the goal of reducing carbon emissions. Consider a registrant purchasing solar energy that mostly displaces coal generation, in a grid that also includes considerable baseload nuclear. Since the average emissions rate of this grid is much lower than the emissions rate of the displaced coal, the reduction in the registrant’s carbon footprint would not reflect the solar energy’s full carbon impact. As a result, the registrant may hesitate to contract for the solar energy in the first place, knowing that its actual carbon benefits could not be reported.

Read our full letter.

We love talking with anyone who shares our goals of more accurate carbon impact measurement and the tools to maximize that impact – so please contact us at [email protected] if you have any questions or want to connect and discuss.

_______________________________________________________________________________________

Footnotes:

[1] Proposed Rule, §I.D.2.

[2] Proposed Rule, §II.G.2.c (p. 195). The proposed rule also cites the EPA’s guidance on Indirect Emissions from Purchased Electricity, which is highly similar to the GHG Protocol Scope 2 guidance. See §II.G.1.b. (p. 160)


Disclaimer.

Carbon Accounting with the Greenhouse Gas Protocols: Successes and Emerging Challenges

David Luke Oates
David Luke Oates is a carbon accounting subject matter expert.
David Luke Oates

By David Luke Oates, SVP of Power Markets Research, REsurety

The Greenhouse Gas Protocol is a foundational component of modern climate standards. It is incorporated into the Task Force on Climate-Related Financial Disclosures’ (TCFD) guidelines for voluntary climate disclosures1, as well as the Science-Based Targets Initiative’s (SBTi’s) recommendations for aligning corporate targets with climate goals.2 It has also largely been paralleled in the U.S. Security and Exchange Commission’s recent proposed rule on climate disclosures.3

The GHG Protocol has achieved considerable success in providing a common framework for voluntary disclosures. But it is now a fairly outdated standard, and its flaws are becoming more impactful and problematic. The GHG Protocol Corporate Standard was originally released in the early 2000s, with updated Scope 2 guidance released in 2015. The nearly seven years since that release have featured dramatic increases in corporate clean energy purchases and interest in accurate corporate climate disclosures.4 There is now growing interest in updating the GHG Protocol and addressing some of its shortcomings.

At REsurety, we spend much of our time helping buyers and sellers of clean electricity to manage their financial risks and achieve their decarbonization goals. We are particularly interested in ensuring that Scope 2 accounting is as effective as possible. Today, the GHG Protocol Scope 2 Guidance has two major flaws: 1) it does not ensure that all actual carbon emissions are accounted for across entities and 2) it often doesn’t create the right incentives for entities interested in decarbonization. 

On the first item, the GHG Protocol’s Market-Based method for Scope 2 accounting allows reporting entities to apply REC purchases to cover their consumption at an emissions rate of 0 tons/MWh. It also allows entities to account for their grid consumption by applying a simple-average emissions rate. This average emissions rate reflects the same clean energy claimed through REC retirements, effectively double-counting the impact of clean energy and contributing to under-reporting of emissions.5 While this double-counting may have been of little concern a decade ago, the volume of today’s clean energy purchases make it a more serious problem.

On the second item, by relying on average emissions rates with low temporal and spatial granularity, current Scope 2 guidance risks send the wrong signals to entities interested in decarbonization. Consider an entity purchasing solar energy that mostly displaces coal generation, in a grid that also includes considerable baseload nuclear. Since the average emissions rate of this grid is much lower than the emissions rate of the displaced coal, the reduction in the entity’s carbon footprint would not reflect the solar energy’s full carbon impact. In general, the activities achieving the greatest amount of decarbonization are not fully rewarded under the current GHG Protocol, creating a misalignment of incentives. We think there is an opportunity to fix both of these problems.

Governments and corporate entities have recently made ambitious climate mitigation commitments. Truly delivering on these commitments will require a modernized set of carbon accounting rules to align incentives and avoid double-counting. We believe that a revised Scope 2 carbon accounting framework based on granular marginal emissions data can help address some of the shortcomings we mentioned above. We look forward to sharing more details on potential solutions to these challenges in the months to come.

In the interim, we love talking with anyone who shares our goals of more accurate carbon impact measurement and the tools to maximize that impact – so please contact us at [email protected] if you have any questions or want to connect and discuss.

_______________________________________________________________________________________

Footnotes:

[1] See p. 21, Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures, October 2021

[2] See p.3, SBTi Criteria and Recommendations, Version 5.0, October 2021

[3] See §I.D.2. (p. 40), The Enhancement and Standardization of Climate-Related Disclosures for Investors, SEC Proposed Rule, File No. S7-10-22

[4] U.S. corporate clean energy purchases grew from 1.2 GW/year in 2014 to over 11 GW/year in 2021. See Clean Energy Buyers Association Deal Tracker

[5] While this double-counting could theoretically be corrected by applying the residual mix emissions rate to all parties’ grid consumption, this approach is not feasible in many jurisdictions. Calculating the residual mix emissions rate depends on visibility into all private contracts for RECs between counterparties, something that individual reporting entities aren’t able to provide. In jurisdictions (such as the U.S.) where residual mix emissions rates are not available, current GHG Protocol guidance is to apply the average emissions rate to grid purchases. See GHG Protocol Scope 2 Guidance §6.11.4


Disclaimer.

Media Advisory: Prolonged periods of negative pricing in Q1 set new record

Blair Allen

REsurety’s REmap Q1 State of the Renewables Market report presents generation-weighted value, shape value, and capacity factor for major U.S. hubs

BOSTON, MAY 10, 2022 – The U.S. power grid saw record lows in the first quarter of 2022, REsurety’s REmap Q1 2022 State of the Renewables Market Report finds, with prolonged negative pricing in Texas expected to ease this summer.

Unlike the soaring prices of last year during the Texas energy crisis of February 2021, this year the ERCOT power grid saw record lows in Q1. It was another turn in a developing plotline REsurety commented on last quarter. 

One example: In February 2021, ERCOT West Hub (among others) settled at the market price cap of $9,000/MWh for three days; in February 2022 ERCOT West Hub saw a two day period where prices never rose above $0/MWh. Mild demand coupled with sustained periods of high wind and solar generation created the conditions for this negative pricing event, though these conditions weren’t isolated to only those few days. In fact, by the end of the quarter, West Hub more than doubled the number of negative-priced hours than were seen in Q1 the year prior.

REsurety creates the REmap-powered State of the Renewables Market report every quarter to provide readers with data-driven insight into the value and latest emerging trends of renewables in U.S. markets. The team uses its knowledge in power markets, atmospheric science, and renewable offtake to analyze thousands of locations, and summarize a few key findings, using the data that is available via its interactive software tool, REmap.

Key components in the report to be used to analyze trends in a given ISO, sub-regions of an ISO, or hub, are:

  • The generation weighted value, or the realized value of the wind and solar projects 
  • The shape value, or the relationship between the generation value and the simple-average market price
  • The net capacity factor for operating wind and solar projects 
Blair Allen, Director, Software Customer Success, REsurety
Blair Allen

“Using the modeled energy in REmap, which tells us how projects could have performed based on underlying wind/solar resource availability, last quarter West Texas solar projects saw anywhere from 20 to 30% of their potential hourly production for a given month happen in negatively priced hours. However, in reality, these projects weren’t operating at their potential capacity in these intervals, and either shut down or significantly ramped down production,” reports Blair Allen, Director, Software Customer Success, REsurety. 

Over the next quarter as the weather starts to transition to summer conditions negative pricing is expected to decline. With an increase and shift in demand, Q2 will likely be a transitional period, with the frequency of negative pricing hours remaining high to start before subsiding more materially by the end of the summer in mid Q3. 

The power of REmap lies in the historical and predictive modeling for renewable energy projects across the United States, as well as the ability to analyze hypothetical installations. Learn more by reading the Q1 report

About REsurety

REsurety is the leading analytics company empowering the clean energy economy. Operating at the intersection of weather, power markets, and financial modeling, we enable the industry’s decision-makers to thrive through best-in-class value and risk intelligence, and the tools to act on it. For more information, visit www.resurety.com or follow REsurety on LinkedIn

Contact:  Allison Lenthall, [email protected], +1-202-322-8285


Disclaimer.

Friends don’t let friends use 8760s

says Jennifer Newman, VP of Atmospheric Science Research, REsurety

As featured in POWER Magazine

Any company embarking on a new project must do its research to ensure that it calculates the proceeds based on the right financial information. With so much data now readily available, it’s more important than ever to use the right data, and make accurate calculations. 

REsurety's Jennifer Newman, VP of atmospheric science research, talks about 8760s.

Amid the boom in demand for renewable power plants, that is not always happening when backers go to measure the value of the energy they will generate. Here’s why, according to Jennifer Newman, Vice President of Atmospheric Science Research at REsurety, the Boston-based renewable industry data and analytics company. 

Q: What is an 8760 and how is it used in the renewable energy industry?

A:  An 8760 (sometimes referred to as a typical meteorological year or TMY) consists of hourly generation values for a wind or solar project for all 8,760 hours of a typical year. Importantly, 8760s are almost always used to represent average generation for a renewable energy project in a given hour. 

Q:  And what’s the problem? Why shouldn’t 8760s be used to estimate the value of power generation being produced by renewable energy projects? 

A:  An 8760 isn’t bad on its own – it’s a perfectly acceptable way of representing average generation. The issue is when a generation 8760 is paired with hourly power prices to produce either a revenue backcast (an estimate of the revenue a project would have made given historical prices) or a revenue forecast (an estimate of how much revenue a project could earn in the future). 

The problem with a backcast is that hourly renewable generation influences power prices during each hour. And that’s because wind and solar tend to be very inexpensive sources of electricity. So an hour where there’s a lot of wind or solar on the grid will tend to be associated with lower power prices, particularly in markets with high renewable penetration. When you use an 8760 instead of actual generation values during each timestamp, you aren’t able to capture that impact of hourly generation on hourly power prices.

And when analysts are using a model to predict future power prices, it’s a mistake to assume that conditions in the future will be similar to  an “average weather year”. Abnormal weather conditions can cause drastic price changes, as we all saw in Texas during February 2021.

Q: So what should be used to accurately calculate the value of renewable power generation?

A: There’s an abundance of rich datasets we can use to inform our decisions on whole new levels. For a backcast analysis, we should be using concurrent generation and price time series data to make these calculations and avoid errors (i.e. the generation volume that is used for 7:00 am on January 13th, 2019 should reflect the same weather conditions that generated the price that was observed in that same hour). In a forward-looking scenario, you should use a variety of different potential weather conditions beyond just an average year. Would you want to use a typical Texas February to project possible gains and losses, now that you know that Texas in February of 2021 is possible?  

Q: Where does a company turn then, to ensure it’s using the right information?

A:  At REsurety we offer the REmap tool, which models hourly generation for every wind and solar project in the United States, and will soon look forward at hypothetical situations to allow for future planning. REmap also offers data for synthetic situations – what-if planning for potential future sites – including historical modeled generation, observed power prices, and the combination of generation and power prices to estimate revenue. 

Getting beyond 8760s can not only steer a company to site a new renewable project in one location versus another, it can also provide guidance on the financial risk associated with a range of potential weather conditions.

Learn more, download the white paper.

Disclaimer.

REsurety Helps Akamai Power and Protect Life Online Sustainably

The most innovative companies worldwide choose Akamai to secure and deliver its digital experiences – helping billions of people live, work, and play every day. With the world’s largest and most trusted edge platform, Akamai keeps apps, code, and experiences closer to users – and threats farther away.

Akamai uses REsurety's lme data to better calculate emission impacts.

With REsurety’s locational marginal emissions (LME) data, Akamai is able to be far more accurate in its avoided emissions calculations. Instead of trying to make sense of inconsistent regional datasets, Akamai is able to calculate the precise impact of its activities at each location on the grid. In addition, REsurety’s project LME reports provide visibility into why emissions are what they are – for example, showing how much gas or coal is being displaced, or how much wind is being curtailed due to Akamai’s activities. Lastly, Akamai is now able to use the LME data to evaluate new PPA opportunities to ensure that it is focusing its efforts on the locations and technologies that can have the biggest impact on carbon emissions. Learn more by downloading the case study.

“…LMEs bring the environmental community five steps closer to the measurement accuracy needed to solve the global emissions crisis.”

– Mike Mattera, Director of of Corporate Sustainability, Akamai Technologies

A deeper dive into 24/7 carbon-free energy, as published in Canary Media

Tech giants and startups are chasing more precise data to make the grid cleaner by the hour – and asking governments and regulators to catch up.

Authored by Jeff St. John

Canary Media’s Down to the Wire column tackles the more complicated challenges of decarbonizing our energy systems. Canary thanks CPower for its support of the column.

Last week, the EnergyTag initiative released standards designed to lay the groundwork for a global system that tracks and trades clean energy on an hour-by-hour basis — in other words, a standard for 24/7 carbon-free energy. Subscribe to receive Canary’s latest news.

For the growing number of corporate energy buyers, clean-energy producers and energy-trading entities already shifting from annual to hourly clean-energy accounting, that kind of standard can’t come too soon. 

Corporate 24/7 clean-energy pioneers such as Google and Microsoft have already signed round-the-clock clean power contracts with power providers including AES and Engie. They’re also tracking clean energy from generation to consumption with European grid operators including Denmark’s Energinet.

To be able to meet the more discerning demands of corporate clean-energy buyers, developers such as Brookfield Renewables and Broad Reach Power and market-makers like Edison Energy are tapping the carbon-tracking capabilities of software and service providers including ClearTraceREsurety and WattTime.

Read the full article on Canary Media’s website.

High-resolution carbon emissions data now available for PJM Mid-Atlantic power grid

Adam Reeve

New data empowers wind, solar and energy storage projects and load centers to accurately calculate their carbon impact

BOSTON, March 17, 2022 – REsurety announced today the expansion of its breakthrough Locational Marginal Emissions (LME) carbon data tool to the PJM power grid in the U.S. Mid-Atlantic region. Previously available only in Texas’s ERCOT grid, the expansion of the data set into PJM results in a dramatic increase in the number of locations for which the high-resolution emissions data is available, with now nearly 15,000 distinct locations served. It’s also the first time that REsurety will be releasing data at the five-minute level, which is particularly valuable for understanding the impact of storage on the PJM grid. The company intends to scale LMEs to the rest of the United States and internationally.

Adam Reeve, senior vice president of software, REsurety

The Locational Marginal Emissions data set measures marginal carbon emissions rates at each node on the grid, enabling insight to the impact of each specific clean energy project site or load location. This capability allows project developers, investors, and corporations to accurately understand the carbon impact of their activities.

“This data is critical for efficiently decarbonizing the grid, as we can now see the impact of specific projects and activities on system-wide emissions,” said Adam Reeve, Senior Vice President of Software, REsurety. “By understanding the carbon emissions impact of specific technologies at specific locations, we can ensure that clean energy strategies are more precisely targeted to where they can have the biggest impact.”

Reeve continued, “We are especially excited about what this means for the value proposition of energy storage. While many people intuitively understand that storage is a necessary technology for decarbonization, historically the industry has lacked the tools to measure its impact accurately.

“But with this level of nodal granularity, we can measure the impact of specific storage projects on the grid during both charging and discharging. We can see, for example, how some projects charge when the marginal generator is clean, and then discharge when the marginal generator is dirty, avoiding a significant amount of carbon emissions in the process.”

“We can also see how other storage projects, unfortunately, can actually increase system emissions. It’s not a one-size-fits-all technology. Where you site energy storage and how you schedule its dispatch can mean the difference between significant increases or decreases in carbon emissions. This data empowers investors and storage operators to measure and maximize their carbon reduction impact.”

Recognizing the value of marginal carbon emissions data, PJM started publishing marginal emissions rates at load node locations starting in January, 2021. REsurety’s data set builds on that initial step in a number ways, including by extending the data set to cover generator nodes and correcting anomalous data points (or outliers) with values consistent with the actual topology of the transmission grid. REsurety also leverages its own models to extend the nodal data back several years, enabling analysis of longer-term market trends.

The resulting LME data set takes into account real-time grid congestion, actual emissions rates by each generator unit, and the physical power flows throughout the system. The data set is available via an API and being integrated into REsurety’s other software tools.

“LMEs can be used to measure the carbon impact of any sustainability strategy – whether it is focusing on local procurement, 24/7 matching, or maximizing your carbon emissions impact,” said Reeve. “We’re excited for this high-resolution emissions data to enable better measurement and decision-making across the board.”

REsurety’s Locational Marginal Emissions data is currently available in ERCOT and PJM, and will be available for other markets later this year. To learn how your company can better measure and maximize the carbon impact of your clean energy initiatives, contact us at [email protected].

About REsurety
REsurety is the leading analytics company empowering the clean energy economy. Operating at the intersection of weather, power markets, and financial modeling, we enable the industry’s decision-makers to thrive through best-in-class value and risk intelligence, and the tools to act on it. For more information, visit www.resurety.com or follow REsurety on LinkedIn.

MEDIA ADVISORY: Solar + Wind Finance & Investment Summit

A year since the February 2021 power crisis in Texas, how have renewable energy hedge markets changed?

ERCOT lessons include new ways to incentivize generators to stay online when their electrons are most needed

BOSTON, Feb. 28, 2022 – Financial hedging tools used to manage clean energy generation and procurement risk have seen major changes in the past year, after the 2021 deep freeze in Texas upended power markets and resulted in outsized gains and losses for many in the industry. 

In an effort to limit their risk during such extreme weather events, many clean energy power producers have returned their focus to traditional as-generated power purchase agreements where operational shutdowns during price spikes are typically permitted with limited or no penalties. 

Lee Taylor, co-founder and CEO of REsurety will be featured on a panel at the Solar + Wind Finance & Investment Summit.
Lee Taylor, co-founder and
CEO of REsurety

The result could be a reduction of demand for clean energy from financially-motivated buyers, as well as a reduction in grid resiliency, warns Lee Taylor, CEO of REsurety, who will speak at the Solar + Wind Finance & Investment Summit next Monday in Scottsdale, Arizona. “If project shutdowns during periods of high demand have a limited impact on a project owner, there will be no incentive for resiliency, ” he says. 

Taylor is not alone in that view. Jay Bartlett of Resources for the Future wrote last March in the aftermath of the Texas deep freeze, blackouts, and $9,000-a-megawatt-hour power rates:

“The Texas power crisis has shown how different sales and hedge structures create very different levels of incentives for a wind project to generate during times of scarcity. While most attention focuses now on projects that either sustained great losses or earned windfall profits, more alarming over the long term are projects that were financially unaffected by the crisis. Those generators may have had little motivation to produce power during a time of great need. Appropriate incentives may not guarantee power supply—clearly, they did not last month—but aligning incentives between wind projects and system needs will better promote beneficial investments and operations. As wind and solar comprise an increasing percentage of power generation, well-designed hedge structures could prove instrumental to power system reliability.”

One solution is a hybrid between historically metered generation and proxy generation-based settlement methods. Future offtake contracts, such as vPPAs, can settle on metered generation but proxy generation (which represents what a project should have produced assuming normal operations and project availability) is utilized to calculate the financial impact of project operations. If that impact exceeds a materiality threshold, damages are owed by the project up to a cap. The materiality threshold and cap on damages would be agreed to by the project and the offtaker.

 “The goal is to preserve the best of both worlds,” says Taylor. “Projects understandably don’t want to bother with calculating proxy generation when the project is operating normally, and after winter storm Uri, projects are no longer comfortable with uncapped financial exposure to operations. This contracting method addresses both of those concerns, while preserving the offtaker’s interest in quantifying the financial cost of a project’s operational performance, and having some recourse when that cost is material.”

Taylor will elaborate during the panel, “Focus on Potential Gamechangers 1: Implementing Changes to the Hedge Market,” at 2:45 pm Mountain Time on Monday, March 7. Moderated by James T. Tynion III, Partner, Morgan, Lewis & Bockius, the panel will also feature Andrew Ehrlickman, Vice President, Brookfield Asset Management. The session promises to address how the financial fallouts from extreme weather events “have completely restructured the entire hedge industry by exposing huge risks lurking in the periphery.” 

The speakers will provide a deep dive into the long-term effects of recent freezes, heat waves, and storms; the changing risk appetites of parties and updated valuations in hedge calculations; and new hedge structures that are emerging. Also on the agenda: How to value weatherization, impacts on tax equity, and the appeal of merchant projects.

REsurety provides market intelligence, asset insight and risk management tools for clean energy sellers, buyers, investors and advisors. REsurety is a sponsor of the Solar + Wind Finance & Investment Summit, and will be at Table 96 where meetings can be scheduled. For media interviews with CEO Lee Taylor in person or by phone, please contact Allison Lenthall, [email protected], 202-322-8285.

About REsurety
REsurety is the leading analytics company empowering the clean energy economy. Operating at the intersection of weather, power markets and financial modeling, we enable the industry’s decision makers to thrive through best-in-class value and risk intelligence, and the tools to act on it. For more information, visit www.resurety.com or follow REsurety on LinkedIn.

REsurety named one of Boston’s “Best Places to Work”

Powering the clean energy economy with an inclusive culture and a mission-driven philosophy

BOSTON, Jan 5, 2022 – REsurety, the leading analytics company powering the clean energy economy, is among Boston’s “Best Places to Work” according to Built in Boston, a hub for the region’s startups and tech companies.

REsurety provides market intelligence, asset insight and risk management tools for clean energy sellers, buyers, investors and advisors. The company fosters transparency and collaboration to solve intellectually challenging problems, with a mission-driven philosophy. REsurety prides itself on its reputation for analytical excellence and a culture of trust and creativity. Benefits of working there are second to none, including 100% company-funded healthcare, unlimited vacation, 401(k) matching and continuing education stipends. 

The company has stepped up hiring since a $16 million capital infusion in October led by climate solutions investment firm Hannon Armstrong. REsurety’s CEO Lee Taylor said then, “This investment will allow REsurety to accelerate our team growth by 50%, as we deliver on our vision to build the analytics engine for the clean energy-fueled future.”

Lauren Ransohoff
Lauren Ranshohoff, a recent REsurety hire

Lauren Ranshohoff, who joined REsurety as a software engineer in test in November, worked before with radar and nanomanufacturing systems. She said she was glad to find “a role that supports the clean economy, where I can also work on technically interesting projects,” and that, “when I first started, it was a really welcoming environment.”

REsurety has recently launched innovative solutions to bring transparency to clean energy technologies, including the 2020 unveiling of REmap (for Renewable Energy Market Analytics Platform), a Software-as-a-Service platform that integrates weather and power market data to calculate the hourly financial performance of over 15,000 renewable energy project locations. It was followed in 2021 by Locational Marginal Emissions (LME), a new way to measure and maximize carbon emissions impacts and decarbonization goals. A project tracking and forecasting tool is now in beta development.

Ransohoff said she’s enjoying the challenge of “taking code developed for internal analytics and translating that to a deliverable product” involving testing and quality assurance. “As a new team member, they really value my opinions. The people are really talented and it’s clear everyone is driven by the company’s mission of empowering the clean energy economy. We can see it throughout everyone’s work.”

More information about applying to work with REsurety can be obtained from the jobs listings on the company’s website.

About REsurety
REsurety is the leading analytics company empowering the clean energy economy. Operating at the intersection of weather, power markets and financial modeling, we enable the industry’s decision makers to thrive through best-in-class value and risk intelligence, and the tools to act on it. For more information, visit www.resurety.com or follow REsurety on LinkedIn.

REsurety and WattTime partner to increase accessibility to high-quality marginal carbon emissions data

Enhanced power grid insights will enable more effective investments in renewables, storage, and load siting.

Boston, Mass. and Oakland, Calif. –  Nov. 2, 2021 – Today clean energy analytics firm REsurety and environmental tech nonprofit WattTime announced a partnership to increase access to more comprehensive and granular carbon emissions data across U.S. and international markets. Through this partnership, they will leverage their respective strengths in measuring marginal carbon emissions to provide previously unavailable depth and breadth of visibility into the carbon impact of their energy-related procurement options and understand which choices offer the greatest benefit to the environment. 

WattTime and REsurety announced partnership focused on enhancing marginal emissions data

REsurety first unveiled its Locational Marginal Emissions (LME) data product in July 2021 with the support of major developers, investors, and corporates. LME empowers customers to measure and maximize how much carbon they cut through clean energy purchases. REsurety currently offers nodal LME data for the ERCOT (Texas) market. Through this new integration of WattTime’s regional emissions dataset, REsurety will also be able to provide regional marginal emissions rates across the entire continental United States as well as international power grids including Europe and Australia. 

“LME enables companies to measure the impact of their existing clean energy purchases with unrivaled accuracy and confidence, and empowers them to maximize the carbon impact of their future investments,: said Lee Taylor, founder and CEO of REsurety. “We are thrilled to have found a like-minded partners in WattTime as we work together to maximize our collective decarbonization impact.”

WattTime invented Automated Emissions Reductions (AER) software, which enables the shifting of flexible electricity loads to periods of cleaner energy and away from moments of dirtier energy, based on the time-specific marginal emissions rates in different grid balancing areas. In recent years, WattTime has also popularized “emissionality”, the practice of using the location-specific avoided emissions benefits of different renewable energy projects in the selection process. With WattTime’s help, organizations including Boston University, solar developed Clearloop, steel producer Nucor, and tech giant Salesforce have all incorporated emissionality into their renewable energy strategies. 

“With the growing urgency of the climate crisis and organizations’ desire to maximize the positive impact of their sustainability strategies and investments, REsurety and their LME platform offer a powerful tool to evaluate potential projects,” said Henry Richardson, senior analyst at WattTime. “We’re proud to support REsurety and enhance the emissions intelligence they are are able to provide.”

LMEs bring a new level of precision and accuracy to measuring the carbon abated or created at any given moment and at any given location on the grid. By calculating the carbon emissions at each node on the grid with hourly granularity, REsurety’s LME product offers, for the first time, visibility into the project-specific carbon impact of each clean energy purchase or investment. By integrating WattTime’s emissions data into its platform, REsurety will be able to provide its clients with regional marginal emissions data in areas where the nodal LME data is not yet available, thereby greatly expanding the geographic coverage of the platform. 

About REsurety
REsurety is the leading analytics company empowering the clean energy economy. Operating at the intersection of weather, power markets and financial modeling, we enable the industry’s decision makers to thrive through best-in-class value and risk intelligence, and the tools to act on it. Learn more about REsurety at: www.resurety.com or follow REsurety on LinkedIn.

About WattTime
WattTime is an environmental tech nonprofit that empowers all people, companies, policymakers, and countries to slash emissions and choose cleaner energy. Founded by UC Berkeley researchers, we develop data-driven tools and policies that increase environmental and social good, including Automated Emissions Reduction and emissionality. WattTime is also the convening member and cofounder of the global Climate TRACE coalition. During the energy transition from a fossil-fueled past to a zero-carbon future, WattTime ‘bends the curve’ of emissions reductions to realize deeper, faster benefits for people and the planet. For more information, visit https://watttime.org

Capital Infusion to Accelerate REsurety’s Information and Risk Management Toolkits for the Clean Energy Industry

Climate solutions investment firm Hannon Armstrong leads $16 million Series B raise

BOSTON, Oct. 27, 2021 – A $16 million capital infusion will fuel the growing breadth of REsurety’s market intelligence, asset insight and risk management tools for renewable energy sellers, buyers, investors and advisors. 

Hannon Armstrong's Rich Santoroski
Rich Santoroski

Climate solutions investment firm Hannon Armstrong (NYSE: HASI) provided a majority of the Series B raise, joining existing investors including Launch Capital and a predecessor fund to Clean Energy Ventures (CEV). Hannon Armstrong’s Executive Vice President, Chief Risk Officer and Co-Head of Portfolio Management Richard Santoroski will take a seat on REsurety’s Board of Directors.

Today, Hannon Armstrong uses the full array of REsurety’s product and service toolkit including its risk transfer, market analytics, carbon impact and advisory services to gain insight into their sustainable infrastructure investments. Hannon Armstrong is also working with REsurety as a private beta customer of REsurety’s soon-to-be-launched project tracking and forecasting tool. 

“REsurety delivers on its promise of best-in-class information products and risk transfer services. We’ve forged a strong relationship with the team and have confidently made this unique investment to help accelerate the expansion of REsurety’s toolkit – both for our own benefit as a client as well as for the benefit of other clean energy industry leaders,” said Santoroski. 

Of note is REsurety’s recently launched Locational Marginal Emissions (LME) tool, which measures and maximizes carbon emissions impact and which Hannon Armstrong plans to use to inform its CarbonCount® metric. Santoroski said, “REsurety’s LME data allows us to utilize precision that previously did not exist in the marketplace.”

“This investment will allow REsurety to accelerate our team growth by 50% as we deliver on our vision to build the analytics engine for the clean energy-fueled future,” said Lee Taylor, REsurety’s founder and CEO. “We found a great partner in Hannon Armstrong and look forward to continued collaborative success.” 

For more information about how your company can benefit from REsurety’s products and services, please contact Tara Bartley, Vice President for Marketing, at [email protected] 

About REsurety
REsurety is the leading analytics company empowering the clean energy economy. Operating at the intersection of weather, power markets and financial modeling, we enable the industry’s decision makers to thrive through best-in-class value and risk intelligence, and the tools to act on it. Learn more about REsurety at: www.resurety.com or follow REsurety on LinkedIn.

Sustainability Roundtable and REsurety Partner to Scale Renewable Energy VPPAs for SR Inc’s Member-clients

Sustainability Roundtable, a leader in outsourced ESG management, and REsurety announced a partnership to facilitate the systemization and scaling of buyer-favorable renewable energy VPPAs.

Sustainability Round Table
REsurety logo

OSTON, July 19, 2021 – Sustainability Roundtable, Inc (SR Inc), a leader in outsourced Environmental, Social and Governance management, and REsurety, a leading analytics company empowering the clean energy economy, today announced a partnership to facilitate the systemization and scaling of buyer-favorable renewable energy transactions for SR Inc’s Net Zero Consortium for Buyers (NZCB). SR Inc Member-clients, including Akamai Technologies, Autodesk, Biogen, Intuit, McKesson, MilliporeSigma, Synopsys, Uber and Wayfair, have helped make NZCB the leading platform for buyer-aggregated Virtual Power Purchase Agreements (VPPAs).  SR Inc’s buyer-favorable VPPAs have set the standard for mid-size companies who want to aggregate their buying power to drive market-leading pricing and contractual protections for offsite utility-scale renewable energy procurement and have been described as the “VPPA 2.0.” SR Inc will leverage REsurety’s Renewable Energy Market Analytics Platform (REmap) to assess the value and risk of renewable energy VPPA opportunities for NZCB Member-clients.

Today’s announcement formalizes an existing working relationship between the two companies that spans REmap and REsurety’s latest decarbonization impact data product, Locational Marginal Emissions (LME).

“SR Inc and Member-clients have been especially impressed by the outstanding quality and remarkable depth of REsurety’s data and analytics,” said Jim Boyle, CEO of Sustainability Roundtable, Inc. “Having SR Inc’s NZCB supported by REsurety’s data analytics as well as that from our other providers, helps NZCB companies accelerate towards their collective goal of helping to create more than a gigawatt of new renewable energy capacity before 2025.  Together we are helping to democratize the environmental and financial benefits of utility scale renewable energy, which was previously available only to the world’s largest companies that could cause utility scale projects on their own.”

REsurety’s REmap tool offers unparalleled visibility into project-specific performance for utility-scale solar and wind projects across the US. Key metrics shown include actual and modeled generation, earned pricing data, and simulated PPA settlement. Unlike other tools that assume average generation profiles or rely on 8760s as inputs, REmap combines project-specific modeled or actual generation with concurrent historical hourly price data to support better renewable energy procurement decisions. REsurety’s Locational Marginal Emission (LME) data tool measures the project-specific carbon impact associated with a renewable energy project – a first for the industry. REsurety’s innovative data-driven products will empower NZCB companies to address decarbonization goals confidently and cost-effectively.

“We are delighted to join forces with the Sustainability Roundtable team and their Member-clients to accelerate our collective path to a zero-carbon future. We believe that the best information – and the tools to act on it – is an essential foundation for the selection and management of clean energy procurement and SR Inc is a great platform to deliver that value and empower the clean energy buyer community,” said Lee Taylor, CEO of REsurety.

SR Inc is focused on providing NZCB Member-clients with the most accurate and comprehensive renewable energy project information available and looks forward to announcing more partnerships in the future.

About REsurety:

REsurety is the leading analytics company empowering the clean energy economy. Operating at the intersection of weather, power markets and financial modeling, we enable the industry’s decision makers to thrive through best-in-class value and risk intelligence, and the tools to act on it.  

With the world’s leading clean energy investors, advisors, buyers, and developers as clients and 7,000 MW of transactions closed, REsurety empowers clients to thrive in the dynamic, complex, clean energy-fueled future. Learn more at resurety.com.

About Sustainability Roundtable, Inc.

SR Inc is a leader in outsourced Environmental, Social and Governance (ESG) management missioned to accelerate the development and adoption of best practices in more sustainable business. SR Inc’s NZCB is a confidential buyers’ community that helps participants develop emissions reduction strategies and benefit from the economies of scale to shape market-leading procurements. SR Inc Member-clients have made SR Inc’s NZCB the leading platform for Buyer Aggregated Virtual Power Purchase Agreements. These “VPPA2.0s” are specifically tailored to the demands of high-credit, risk-averse, corporate buyers.  Learn more at sustainround.com.

Read the full release here.

REsurety launches Locational Marginal Emissions data product to empower customers to measure and maximize how much carbon they cut through clean energy purchases

Microsoft and other sustainability leaders adopt new tool to evaluate project-specific carbon impact of solar, wind and energy storage – a first for the industry.

BOSTON, July 14, 2021 – REsurety announced today a new data tool, called Locational Marginal Emissions, created with Microsoft and built on the Microsoft Azure cloud platform, to help customers maximize decarbonization investments. Top clean energy buyers, investors, and advisors including Microsoft, Hannon Armstrong, Marathon Capital, Akamai Technologies, Quinbrook Infrastructure Partners, Broad Reach Power, and The Brattle Group will use the new data product from REsurety to measure and maximize the decarbonization impact of each dollar they spend on solar, wind, and energy storage.

Buying clean energy is a means to an end: decarbonization. While many corporations have committed to achieve carbon neutrality or “net-zero” by a certain date, the methods for measuring and maximizing progress have been limited by a lack of data. To date, carbon measurement tools have relied on regional averages, which can materially over- or under-estimate the carbon impact of a specific clean energy project.

The new Locational Marginal Emissions data tool from REsurety addresses this problem.

REsurety’s patent-pending Locational Marginal Emissions technology calculates the carbon emissions at each node on an electric grid with hourly granularity. This helps decision-makers understand how much each specific clean energy procurement, load-siting, or energy storage decision contributes to their decarbonization goals.

Corporations can more precisely and strategically address their net-zero and carbon-free goals by using Locational Marginal Emissions to more accurately measure how much carbon is being avoided by their specific clean energy projects, as well as to better measure how much carbon is emitted as result of their electrical load.

“Locational Marginal Emissions solve the need for transparent and accurate carbon impact data,” said Lee Taylor, CEO of REsurety. “It’s what corporate ESG leaders want to know: how many tons of carbon emissions are actually avoided by the clean energy they’re buying.”

“We can play a key role in fully decarbonizing the grid,” said Brian Janous, GM of Energy and Renewables, Microsoft. “To do it the fastest and the most cost-effectively, we need to be able to understand the carbon impact of each MWh coming from a specific wind, solar, or storage plant. We want to make sure that the clean energy we’re helping to bring onto the grid has the maximum environmental benefit. REsurety’s Locational Marginal Emissions data gives us the transparency we need to make climate-wise investments.”

Sustainability leaders who will use the new data tool range from tech companies to investment banks and impact investors.

Climate investment firm Hannon Armstrong will use Locational Marginal Emissions to further enhance its sustainability investment screen for clean energy assets. “Understanding the carbon impact for all current and future portfolio projects is central to our purpose as a climate positive investor. LMEs offer precision that previously did not exist in the marketplace, and we are pleased to incorporate this innovative and complementary data set alongside our CarbonCount® methodology,” said Rich Santoroski, Chief Analytics Officer.

Marathon Capital, an industry-leading investment bank and advisor, plans to use Locational Marginal Emissions to support their clients. “We are eager to apply this data-driven approach to empower our clients to invest in projects with the largest carbon-reducing impact,” said Joan Hutchinson, Managing Director of the Offtake Advisory group.

David Scaysbrook, Managing Partner of Quinbrook, said, “REsurety is tackling a fundamental data gap we have all been grappling with. Reducing carbon emissions by deploying impactful renewables at scale lies at the core of our work at Quinbrook. Using LMEs will help us be even more discriminating in the investments we make, and it will assist us, our investors, and our offtake customers to create accurate carbon assessments that both track our ‘value add’ and meet increasing reporting obligations.”

REsurety VP of Power Market Research Dr. David Luke Oates and Dr. Kathleen Spees of The Brattle Group co-authored a white paper earlier this year that introduced the new Locational Marginal Emissions approach. “Increasingly, electricity systems that are decarbonizing will face grid pockets of clean energy ‘saturation’ where developing more clean energy will offer diminishing decarbonization value. LME data will offer policy makers and consumers the information they need to shift program dollars to where it can make the greatest impact,” said Dr. Spees.

Akamai Technologies, a leading provider of solutions that protect and deliver digital content, plans to use Locational Marginal Emissions to improve measurement of emission reductions derived from renewable energy investments. “In order to achieve our 2030 sustainability goals, which include powering 100% of global operations with renewable energy, we need transparency and accuracy in measuring our emissions,” says Mike Mattera, Director of Corporate Sustainability. “REsurety’s LMEs provide us with an extra level of confidence in our calculations.”

“Broad Reach Power is proud to join this group of industry leaders as an early adopter of the Locational Marginal Emissions tool,” said Paul Choi, EVP of Origination at Broad Reach Power, an owner/operator of utility-scale wind, solar, and energy storage power projects. “With a storage pipeline exceeding 14 GW, granular carbon emissions data will be crucial to ensure we more efficiently reduce carbon emissions while increasing grid reliability.”

REsurety’s Locational Marginal Emissions data is available for projects in ERCOT and will be available for other U.S. markets later this year. To learn how your company can better measure and maximize the carbon impact of your clean energy investments or purchases, contact [email protected]

POWER, FINANCE & RISK: Locational Marginal Emissions

Clean energy strategies can miss true carbon emissions avoided if they’re based on regional and annual averages, Power Finance & Risk reported May 10 in a story by Taryana Odayar.

Increasingly popular “24/7 clean energy” strategies can miss project details if they’re based on regional and annual averages, Power Finance & Risk reported May 10 in a story by Taryana Odayar.

“That strategy ignores the sub-regional transmission congestion that can have a significant impact on carbon intensity,” the magazine quoted  REsurety CEO Lee Taylor saying on Norton Rose Fulbright’s May 4 Currents podcast . Instead, REsurety has a new way to measure carbon called “Locational Marginal Emissions” that looks at exactly where and when energy is added to the grid.

“We have a common enemy which is that not all megawatt-hours are equal, so a megawatt-hour generated from one location can be meaningfully different from another location based off of the electrical grid that that’s operating,” Taylor said on Currents. “As companies are trying to go carbon-neutral, carbon-free, carbon-negative, they need more than annual megawatt-hour accounting to do that effectively.”

Power Finance & Risk linked to REsurety’s white paper with The Brattle Group on LMEs, which compares two solar projects in West Texas. One displaces twice as much carbon because it has access to transmission to displace coal-fired generation, while the other curtails another nearby solar plant. The result helps companies such as Google that are committed to 24/7 strategies find out exactly how much carbon they’re reducing.

Full article (subscription required): http://www.powerfinancerisk.com/Article/3988459/AES-reveals-plans-to-replicate-Google-PPA-across-US.html

REsurety Adds Hourly Price and Generation Granularity to REmap

Texas crisis illustrates how hourly generation during high-priced hours spells the difference between big wins and big losses for clean energy buyers and sellers.

Hourly power price and generation data is now available in REmap, a tool widely used by leaders in the renewable energy industry to identify value, understand risk and optimize offtake and hedging strategies. REmap’s new Hourly Data Explorer allows users to investigate the hourly performance of thousands of operational and synthetic projects.

The Hourly Data Explorer continues REsurety’s commitment to provide unrivaled breadth of market intelligence and depth of project-specific insight, empowering key decision makers.

“The February winter storm across the Southwest provided an extreme example of an already clear trend: fortunes are made and lost by generating during the right hours, not simply by achieving a high annual energy production,” said Lee Taylor, founder and CEO of REsurety. REsurety launched the map-based tool in May 2020 as an SaaS product, to provide the data and analytics required by the complex, data-driven industry that is the modern renewable power market.

Last year, REsurety used REmap to reveal how low energy demand during the coronavirus shutdown — combined with low natural gas prices and high renewable generation in April 2020 — sent the production-weighted wholesale price of wind-generated electricity to all-time lows across the SPP, PJM and MISO power grids. 

This week, in a column for Utility Dive, REsurety digs into what REmap data tells us are the top trends and takeaways in renewable energy markets today. 

The resiliency that the Texas grid so badly needed in February 2021 was foreshadowed by similar — though smaller — power market events in 2020 and 2019. “One thing REmap shows us is what renewable energy projects could have generated during the Texas deep freeze of February 2021, based on the actual wind and solar resource available,” Taylor said. 

REmap Hourly Data Explorer Screenshot
A screenshot from REmap’s Hourly Data Explorer shows a modeled wind project in south Texas during key hours of the February 2021 deep freeze. 

Theoretical project generation data, given site-specific weather conditions and plant characteristics, will be available in REmap in early March.  Hourly metered generation at the project level for ERCOT projects will follow in early May. REmap can help users understand the financial implications of the February 2021 deep freeze on contract settlements, and inform their expectations moving forward.

REmap stands for “Renewable Energy Market Analytics Platform.” To keep it populated with the latest information, REsurety collects, cleans, and analyzes billions of data points from a wide range of sources. Industry leaders use the resulting massive database to inform their decision making on new investments, to benchmark against their peers and competitors, and to inform their offtake strategies – both as buyers and sellers. Current REmap customers include developers, investors, C&I buyers, and advisors. Joan Hutchinson, Managing Director of Marathon Capital and an early REmap client, described REmap as “a sea change in the access to quantity and quality of data.”

An Innovative Offtake Contract Makes Its Solar Sector Debut

First used with wind projects, a pgPPA manages weather-related risk by settling a facility’s energy transfer based on a proxy generation index, rather than on actual metered generation. Operational risk shifts from buyer to seller.

An innovative financing deal is the latest evidence that solar is entering the mainstream among big institutional investors.

Lightsource bp secured what’s known as a proxy generation power purchase agreement (pgPPA or Proxy Gen) with the Capital Solutions unit of Allianz Global Corporate & Specialty (AGCS), in partnership with Nephila Climate.

The pgPPA covers electricity generated by Lightsource bp’s 153 MW Briar Creek solar farm, under construction in Navarro County, Texas.

In simple terms, a pgPPA is a renewable energy contract designed to manage weather-related risk. In practice, it settles energy transfer from a facility based on a proxy generation index, rather than on the metered generation. That means proxy generation is an hourly index that determines the volume of energy that a project would have produced if it had been operated as specified by the developer or owner.

The arrangement hinges on both the owner and the offtaker agreeing on a set of weather metrics to establish the proxy generation component. In the case of Lightsource bp’s Briar Creek facility, REsurety Inc. will serve as the calculation agent over the life of the contract.

The pgPPA reflects the fact that solar “can stand on its own two feet” and not be so tied either to a purchase power agreement or public policy directive, said Lee Taylor, REsurety’s founder and CEO in an interview with PV Magazine USA.

Early adopters

Taylor said that the pgPPA structure emerged a few years ago in the wind energy sector, and variations are common in agribusiness, as well as ski resorts, among other weather risk-related markets. One of the technique’s first uses in renewable energy was with the 178 MW Bloom Wind facility in Kansas, part of the Southwest Power Pool. U.S. Capital Power operates Bloom Wind under a 10-year fixed price contract with Allianz Risk Transfer that covers 100% of the project’s output.

Under the contract, signed in 2016, Capital Power swaps the market revenue from the wind project’s generation for a fixed annual payment over a period of 10 years. The agreement secures long-term predictable revenues and mitigates generation volume uncertainty related to the intermittent nature of the wind resource.

Taylor said that similar structures have been used on wind projects in PJM and ERCOT in the U.S., as well as in Australia. The Briar Creek deal is considered to be the technique’s first use in a U.S. solar project.

“This deal is a great example of the evolution of renewable energy products here in the U.S.,” said Kevin Smith, CEO of Lightsource bp in the Americas. He said that innovative power contract structures such as virtual and pgPPA’s are “valuable tools we can leverage to meet the needs of our corporate partners, manage risk, and continue to finance and build new solar projects.”

Ariane West, Director of Structured Finance, Nephila Climate, said that risk transfer approaches “are essential to support investment and financing of infrastructure on the scale needed to achieve zero carbon targets.”

PPAs and related structures

Purchase power agreements are commonly used structures between a solar facility’s owners and an energy offtaker, often a utility or large manufacturer. In a variation known as a virtual PPA, contract terms focus on the amount of energy the facility delivers to the grid. Typically, the quantity is measured by an electrical meter at the point of interconnection. By settling the energy delivery at the interconnection point on an “as generated” basis, the buyer is exposed to a number of operational risks.

In a pgPPA, the focus is the amount of energy that should have been delivered to the grid had the plant operated according to equipment efficiency factors and operational best practices. The approach shifts operational risk away from the offtaker and onto the seller.

The pgPPA measures the actual wind or solar resource at the facility. It then runs that measurement through an agreed-to formula that estimates how many megawatthours should have been produced given the facility’s size and operations under best practice standards.

In the case of Briar Creek solar, REsurety is providing the hourly solar radiance data, which will be managed using PVsyst photovoltaic software.

The Briar Creek solar farm is about 40 miles south of Dallas, and is expected to start commercial operation at the end of 2021.


Reposted as in PV Magazine.

POWER, FINANCE & RISK: Iron Mountain supes up vPPAs with extra hedges

Data management company Iron Mountain has layered additional hedge contracts onto virtual power purchase agreements that it signed with two wind farms in 2016 and 2017 as it seeks to mitigate various risks associated with the popular renewable energy contracts. REsurety provided the valuation and risk analytics for the transactions, and will serve as calculation agent for tracking and settlement over the lives of the contracts.

Read the full article on Power Finance & Risk here (subscription required): http://www.powerfinancerisk.com/Article/3954799/Iron-Mountain-supes-up-vPPAs-with-extra-hedges.html?ArticleId=3954799

POWER, FINANCE & RISK: Big data gets smarter on vPPAs

“We were delighted by the contribution [vPPAs] made to our sustainability goals but were frustrated by the financial volatility of the settlement payments and the limited ability we had to predict or manage that volatility,” wrote Kenneth Davies when he was director of energy portfolio management at Microsoft. Working with insurer Allianz and analytics firm REsurety, Davies came up with solutions including the proxy generation PPA, the volume firming agreement and the settlement guarantee agreement.

Read the full article on Power Finance & Risk (Subscription required)

Iron Mountain teams with Birch Infrastructure & REsurety to de-risk clean energy procurement

REsurety helps Iron Mountain limit its exposure to variable weather and power markets, to achieve both sustainability and financial goals while investing in offsite renewable energy.

Birch Infrastructure has created a customized solution that will enable data center leader Iron Mountain, Inc. to continuously and cost-effectively power its data centers in five states with renewable power. That energy, produced at the Ringer Hill Wind Farm in Pennsylvania and the Dermott Wind project in Texas, will be financially firmed up into a reliable 24/7 power solution, thereby avoiding the cost and complexity standard in traditional renewable energy purchases.

Iron Mountain had previously announced its Ringer Hill and Dermott wind power agreements in 2016 and 2017. Mark Kidd, Iron Mountain’s Executive Vice President and General Manager of Data Centers, commented: “Iron Mountain’s Data Center business has been powered with 100% renewable energy since 2017. Power Purchase Agreements with projects such as Ringer Hill and Dermott are a key part of that strategy. Birch has enabled us to manage the risks inherent in this type of agreement and confidently enter into additional agreements to responsibly power our rapidly growing data center footprint.”     

“Utilizing risk management tools and assembling the right team is how we’re able to help partners like Iron Mountain meet their renewable energy and financial goals,” said Kenneth Davies, Chief Strategy Officer at Birch. “Our aim with all of our clients is to reduce the risk and uncertainty that comes with renewables while providing clean energy reliably and cost-effectively. That’s what we were able to do for Iron Mountain.”

To help reduce risk and costs and simplify renewable energy for Iron Mountain, Birch teamed up with REsurety, a provider of valuation analytics and risk management services in the renewable energy market. Specifically, Birch incorporated two weather-linked risk management products to improve on the standard virtual Power Purchase Agreement (vPPA) – a Settlement Guarantee Agreement (SGA) and a Volume Firming Agreement (VFA).

These tools allow corporate clean energy purchasers to limit their exposure to variability from weather and power market fluctuations while investing in offsite renewable energy. Birch executed the SGA and VFA for Iron Mountain with Allianz Global Corporate & Specialty’s Capital Solutions unit, in collaboration with Nephila Climate. REsurety provided the valuation and risk analytics in support of the transactions, and will serve as the calculation agent for their ongoing tracking and settlement.

“vPPAs are great tools for corporates to achieve their sustainability goals,” said Lee Taylor, CEO of REsurety. “Unfortunately, on their own they can result in ineffective hedges on energy consumption costs or speculative exposure to commodity markets and weather. Birch and Iron Mountain recognized these challenges, and we are delighted to have supported their transition to this new solution – ensuring Iron Mountain achieves its sustainability goals and its financial goals, simultaneously.” 

About Iron Mountain

Iron Mountain Incorporated, founded in 1951, is the global leader for storage and information management services. Trusted by more than 225,000 organizations around the world, and with a real estate network of more than 90 million square feet across more than 1,480 facilities in approximately 50 countries, Iron Mountain stores and protects billions of valued assets, including critical business information, highly sensitive data, and cultural and historical artifacts. Providing solutions that include secure records storage, information management, digital transformation, secure destruction, as well as data centers, cloud services and art storage and logistics, Iron Mountain helps customers lower cost and risk, comply with regulations, recover from disaster, and enable a more digital way of working.

Visit www.ironmountain.com for more information.

About Birch Infrastructure

Birch Infrastructure, PBLLC, is a employee-owned public benefit company that partners with utilities and rural communities to reduce the cost and risk of powering the cloud with one-hundred percent renewable energy. Birch develops, structures, owns and operates utility infrastructure, thereby enabling its data center customers to improve their environmental performance without assuming the risk or complexity of the wholesale energy market.  

About Allianz Global Corporate & Specialty

Allianz Global Corporate & Specialty (AGCS) is a leading global corporate insurance carrier and a key business unit of Allianz Group. We provide risk consultancyProperty-Casualty insurance solutions and alternative risk transfer for a wide spectrum of commercial, corporate and specialty risks across 10 dedicated lines of business.

Our customers are as diverse as business can be, ranging from Fortune Global 500 companies to small businesses, and private individuals. Among them are not only the world’s largest consumer brands, tech companies and the global aviation and shipping industry, but also wineries, satellite operators and Hollywood film productions. They all look to AGCS for smart answers to their largest and most complex risks in a dynamic, multinational business environment and trust us to deliver an outstanding claims experience.

Worldwide, AGCS operates with its own teams in 32 countries and through the Allianz Group network and partners in over 200 countries and territories, employing over 4,450 people. As one of the largest Property-Casualty units of Allianz Group, we are backed by strong financial ratings. In 2019, AGCS generated a total of €9.1 billion gross premium globally. www.agcs.allianz.com

About Nephila

Nephila Capital Ltd is a leading investment manager specializing in (re)insurance and weather risk. Nephila Climate is a dedicated weather and climate risk transfer and ESG-driven business. Nephila offers a broad range of investment products focusing on instruments such as insurance-linked securities, catastrophe bonds, insurance swaps, and private transactions. Nephila Capital Ltd has assets under management of approximately $10.2 billion as of June 1, 2020 and has been managing institutional assets in this space since it was founded in 1998. The firm has over 250 employees based in their Bermuda headquarters, San Francisco, CA, Nashville, TN and London. Further information can be found at www.nephilaclimate.com or www.nephila.com.

Reposted as in CISION PR Newswire.

Taaleri SolarWind II fund invests in a 336 MW ready to build wind farm in Texas

Taaleri Energia announces the use of a 10-year Proxy Revenue Swap for its 336 MW Texas wind farm. REsurety provided risk analytics supporting the transaction, with the substantial majority of the power to be contracted under the PRS.

The Taaleri SolarWind II fund has, together with AIP, Ilmarinen, and Akuo Energy, acquired 93% of the equity in the Escalade wind farm in Texas. Taaleri Energia, the project developer, will retain a minority stake in the project. The wind farm is located in Knox County, around 300kms west of the Dallas-Fort Worth metropolitan area.

The wind farm will consist of 45 Vestas V162 5.6 MW turbines and 20 Vestas V150 4.2 MW turbines and represents a USD 450 million plus investment in the North American renewable power sector. The construction work is scheduled to begin during Q2 2020 with the wind farm reaching operational status in Q4 2021.  The wind farm’s annual production of electricity will be approximately 1270 GWh. It will produce enough electricity to supply around 115,000 households and will offset the equivalent of 604,000 tonnes of carbon dioxide during each year of operation.

The project has been developed in-house by Taaleri Energia since 2018, following an acquisition from its development partners NorthRenew Energy and Chermac Energy. The Balance of Plant contractor is Mortenson Construction and Akuo Energy is the Construction Manager as well as the Technical and Commercial Manager for the project. Vestas will provide Operations & Maintenance services for the project under a 30-year contract.

Tax equity for the investment will be provided by BHE Renewables (a subsidiary of Berkshire Hathaway Energy) and construction financing by NORD/LB, Mizuho, Santander and Societe Generale. The substantial majority of the power produced by the wind farm will be contracted under a 10-year Proxy Revenue Swap with Allianz Global Corporate & Specialty SE’s Capital Solutions unit in collaboration with Nephila Climate.  REsurety Inc. provided risk analytics supporting the transaction.

“We are extremely happy with the first investment in the US from the Taaleri SolarWind II fund. The onshore wind resource in Texas is excellent and the location of our wind farm, with connections to the large population centres, is also ideal. The ERCOT market for electricity in Texas is very similar in structure and operation to the Nord Pool electricity market in the Nordic countries, a market that we are very familiar with. The fact that we have developed this project in-house and succeeded in bringing on board such high calibre partners, co-investors and financers is a testament to the strength of our development, engineering and investment capabilities”, said Taaleri Energia’s Managing Director, Kai Rintala.

 “Onshore wind in Texas presents its very specific peculiarities which we managed with innovative solutions. This transaction marks the beginning of a partnership with Taaleri and Akuo Energy. Two highly reputable players in the sector. We are pleased to have partnered with them and we are looking forward to continuing and developing our strong partnership going forward”, adds Domenico Tripodi, Partner at AIP.

“Akuo is excited to form its first partnership with Taaleri and AIP, companies who share similar values and DNA to ours and are keenly focused on accelerating the global energy transition.  The addition of the 336 MW Escalade project to Akuo’s operating portfolio is a significant step forward in meeting Akuo’s growth ambitions globally and we are thrilled that Taaleri and AIP have placed their trust in Akuo as an equity and operating partner” stated Thomas Coté, CEO Akuo Energy USA, Inc. 

Reposted as in Taaleri.

Scout Clean Energy completes construction of 180-MW Heart of Texas Wind Farm

Scout Clean Energy reaches commercial operations at Heart of Texas. REsurety provided risk analytics to support a Proxy Generation PPA for the project.

Colorado-based renewable energy developer, owner and operator, Scout Clean Energy, completed construction and successfully closed tax equity funding for the utility-scale 180-MW Heart of Texas Wind Farm (HTX) in McCulloch County, Texas. Scout is a portfolio company of Quinbrook Infrastructure Partners.

HTX utilizes 64 of the latest generation GE 2-MW platform wind turbines and three models of 2-MW platform turbines to optimize site production. Construction began in September 2019 and was completed following the commissioning of Scout’s 300-MW Ranchero Wind Farm in Crockett County, Texas late last year.

Scout entered a fixed-price balance-of-plant construction agreement with RES Americas Construction, who completed the construction. The asset management and post-construction operation will be undertaken by Scout.

Allianz Global Corporate & Specialty’s Capital Solutions unit, in partnership with Nephila Climate, has entered into a pgPPA with the project company. A pgPPA is the newest structure in a suite of risk management tools that allows buyers and sellers of renewable energy to manage the risks created by weather-driven renewable energy, which provides an alternative offtake arrangement guaranteeing a rate per MWh to the project for its proxy generation. REsurety provided the risk analytics supporting this long-term offtake transaction.

Construction financing of $255 million was provided by KeyBank as an Administrative Agent, Rabobank and CoBank ACB. GE Energy Financial Services and BHE Renewables invested tax equity. The project has tax incentive agreements in place with McCulloch County, McCulloch County Hospital District and Lohn Independent School District. It is estimated that the county will receive $36 million in tax revenue over the life of the project.

“Heart of Texas was completed on time and under budget which is quite an achievement given the wide-spread disruption that COVID-19 has caused across the entire US economy,” said Michael Rucker, CEO and founder of Scout Clean Energy.

“Reaching commercial operations at Heart of Texas brings Scout’s operational portfolio of wind energy generation to 698 MW with a further 146 MW under construction and more than 4,000 MW in our active development pipeline.”

Reposted as in Renewable Energy World.

REsurety launches REmap, expanding the industry’s access to critical value & risk analytics

Map-based SaaS tool provides unprecedented transparency and insight into clean energy markets, illustrating today how COVID-19 has impacted renewable projects and driven record-setting low prices.

BOSTON, May 28, 2020 /PRNewswire/ — A new information services product that harnesses a massive project performance dataset and suite of financial analytics that industry leaders use to make long-term asset and contract decisions for wind and solar energy has revealed that the low energy demand during the coronavirus shutdown, combined with low natural gas prices and high renewable generation, has resulted in unprecedented low power prices in multiple U.S. markets.

REsurety, the industry leader in clean energy valuation and risk analytics, said the insights available from its Renewable Energy Market Analytics Platform (“REmap”) include that the production-weighted wholesale price of electricity for wind projects fell to all-time lows during the COVID-19 pandemic across markets including SPP, PJM and MISO – with extreme lows reaching below $2 per MWh for the entire month of April in high wind penetration regions such as Oklahoma.

REsurety today is publicly announcing the launch of its REmap information service. The REmap tool integrates weather and power market data at an unprecedented scale, calculating hourly financial performance for 15,000 operational and greenfield locations, which REsurety uses to provide clients with the industry-wide context and site-specific depth of insight needed to make better decisions faster. 

“We’re expanding the access to our secret sauce,” said REsurety CEO Lee Taylor. For years, REsurety has used its proprietary data and analytics to support the analysis of hedging instruments. Now, through REmap, REsurety makes that insight available by subscription to support a much broader set of use cases, including greenfield prospecting, M&A diligence, and offtake and hedge analysis.

“Clean energy markets are going through a revolution,” Taylor added. “The scale and complexity of risks facing clean energy projects and their offtakers are at an all-time high. Understanding and managing those risks requires a step change in information – and that’s why we built REmap.”

REmap leverages REsurety’s unique expertise at the intersection of atmospheric science, power market modeling and big data. Billions of data points from many sources are collected, cleansed, and analyzed to provide the financial metrics that are critical to renewable energy decision makers’ success. Existing customers include developers, hedge providers, C&I buyers, and advisors.

“REmap is a sea change in the access to quantity and quality of data,” said Joan Hutchinson, Managing Director of Marathon Capital, an early REmap client. “It has assisted Marathon in providing our clients with data-driven insights and solutions efficiently – even before project data is shared.”

Jim Howell, CEO of Birch Infrastructure, also a REmap client, commented, “Identifying the optimal location to invest in renewables has always been somewhat of a dark art – relying on intuition and point-specific analyses. REmap gives us the information we need to truly optimize our procurement and hedging activities.”

Reposted as in PR Newsire.

Nephila Climate Adds Proxy Generation PPA To Its Suite Of Hedging Structures For Renewable Energy

Hedging structure allows Scout Clean Energy to manage risks associated with weather and price variability for its Heart of Texas wind farm.

HAMILTON, Bermuda, Oct. 4, 2019 /PRNewswire/ — Nephila Climate, the weather, climate and ESG-driven specialty division of Nephila Holdings Ltd. announced the first use of a Proxy Generation Power Purchase Agreement (pgPPA) for the 180MW Heart of Texas (HTX) wind farm located in McCulloch County Texas being developed by Scout Clean Energy of Boulder, Colorado. Scout secured the pgPPA with Allianz Global & Specialty, Inc.’s Alternative Risk Transfer unit, in partnership with Nephila Climate. REsurety provided the risk analytics supporting the long-term offtake transaction and will serve as the calculation agent for the life of the contract.

The pgPPA is the newest structure in a suite of risk management tools that allows buyers and sellers of renewable energy to manage the risks created by weather-driven renewable energy. Unlike the Proxy Revenue Swap (PRS) (more than 2GWs of PRSs are currently deployed) which guarantees a revenue amount, the pgPPA guarantees a rate per MWh. The project therefore retains exposure to P50 accuracy. This structure provides the cashflow certainty the project needs to support financing but does not require the project to pay for the transfer of risk that it prefers to retain.

“The renewable energy landscape continues to evolve, with buyers and sellers of clean energy having to manage increasingly large and complex risks,” said Richard Oduntan, CEO of Nephila Climate.  “In response to that need, Nephila Climate’s goal is to provide a holistic set of risk management tools to the buyers and sellers of clean energy.  These tools enable our clients to pick and choose which risks they want to shed, and which risks they want to hold, which can change project by project. We’re delighted to be announcing the execution of this new structure with the Scout team a short few months after announcing our PRS transaction with them earlier this year.”

A pgPPA is essentially the same as the popular Virtual PPA, or “vPPA” structure favored by corporate buyers. The difference is that the contract settles on a Proxy Generation index rather than the observed or metered generation. Proxy Generation is an hourly index that specifies the volume of energy that a project would have produced if it had been operated as specified by the developer or owner. This settlement mechanism is required to establish aligned interests: ensuring that the offtaker doesn’t take on financial exposure to the owner/operator’s decisions, such as when to plan maintenance or to install upgrades.

“The success of structures like the Proxy Revenue Swap for project developers, and more recently the Volume Firming Agreement (VFA) for renewable energy buyers, clearly demonstrates that both buyers and sellers of clean energy are increasingly in search of tools to manage the volatility of intermittent generation,” said Lee Taylor, CEO of REsurety. “The pgPPA is simply the next iteration of a proven structure that enables each party to manage the risks that they are best equipped to hold.”

“We continue to break new ground with these innovative risk management structures,” stated Karsten Berlage, managing director, Allianz Alternative Risk Transfer (ART). “We are pleased to collaborate with the Nephila Climate and REsurety teams yet again for another ‘first,’ and to provide Scout with the revenue certainty they needed to launch construction of the project.”

Reposted as in PR Newswire

ENGIE North America Announces Construction of Jumbo Hill Wind Project in Texas

Engie North America has signed another Proxy Revenue Swap; this time for its 160mw wind project, Jumbo Hill, in Texas.

HOUSTON–(BUSINESS WIRE)–ENGIE North America Inc. today announced the start of construction of the Jumbo Hill Wind Project, located in Andrews County, Texas. With a total capacity of approximately 160 MW, Jumbo Hill is scheduled to be online by spring of 2020.

Jumbo Hill will provide energy and Renewable Energy Credits generated by the Project to a corporate customer under a virtual Power Purchase Agreement (PPA), and has also entered into a Proxy Revenue Swap for a portion of its generation with Allianz Global Corporate & Specialty’s specialist weather risk team, in collaboration with its partners at Nephila Climate. REsurety Inc provided risk analytics supporting the Proxy Revenue Swap transaction and will serve as the calculation agent on an ongoing basis.

Jumbo Hill will use 57 GE Renewable Energy turbines, each with 127-meter rotors and a capacity of more than 2 MW, and the balance of the facility will be built by Wanzek Construction, Inc. The total capital investment of the Project is over $150 million, and there will be up to 250 people employed at the site during the height of construction activity. The Project will also generate significant economic development in the local area: annual payments to landowners will total millions of dollars over the life of the Project, combined with purchases of local goods and services, and nearly $30 million in payments to the various taxing entities. The Project is expected to employ up to 12 people long-term. The Project is part of the portfolio acquired in 2018 by a subsidiary of ENGIE North America from Infinity Power Partners, a joint venture between Infinity Renewables and MAP® Energy.

“ENGIE is thrilled to be announcing our fifth wind project to start construction over the past year,” said Emily Cohen, Vice President of Commercial Strategy within ENGIE North America’s wind development team. “The construction of the Jumbo Hill Project will take ENGIE North America’s renewable generation built or under construction to more than 1.5 GW of capacity. It is a strong project in a unique location in West Texas, and we expect it to complement and help grow the evolving industries in the region.”

About ENGIE in North America Inc.

ENGIE North America manages a range of energy businesses in the United States and Canada, including clean power generation, cogeneration, and energy storage; retail energy sales; and comprehensive services to help customers run their facilities more efficiently and optimize energy and other resource use and expense. Nearly 100 percent of the company’s power generation portfolio is low carbon or renewable. Globally, ENGIE is the largest independent power producer and a leading energy efficiency services provider in the world, with operations in 70 countries employing 160,000 people, including 1,100 researchers in 12 R&D centers. For more information, please visit www.engie-na.com, @ENGIENorthAm, and www.engie.com.

About MAP® Energy

MAP® Energy is a leading investor in the development of renewable energy projects and has funded more than 10,000 megawatts of operating wind and solar generating capacity located across the United States. More information is available at www.map-energy.com.

Reposted as in BusinessWire.

REsurety Surpasses 5 Gigawatts of Renewable Energy Risk Mitigation Contracts

REsurety-enabled risk mitigation products have become standard operating procedure for clean energy industry leaders.

BOSTON, Jan. 9, 2019 /PRNewswire/ — REsurety, a leading provider of valuation analytics and risk management services to the buyers and sellers of renewable energy, announced today that it has reached a critical corporate and industry milestone, having surpassed more than 5,000 MW of risk management transactions. Transactions closed in 2018 with Microsoft, Enel Green Power North America, Engie, Orsted, Macquarie, and several other large international companies have fueled nearly half that cumulative volume in 2018 alone, signaling broad and accelerating adoption of REsurety’s risk mitigating products and services. 

“2018 has been a breakout year for REsurety and for the industry’s adoption of risk management tools,” said Lee Taylor, CEO of REsurety. “Our 5GW milestone shows the incredible demand for certainty when it comes to buying and selling renewables. Both project owners and their corporate off-takers are finding our risk mitigation products to be an accessible and cost-effective way to avoid revenue or cost volatility.”

REsurety renewable energy risk mitigation products deployment graphic.
REsurety Deployment of Renewable Energy Risk Mitigation Products

REsurety’s success in 2018 was highlighted by several high-profile transactions. As separately announced on Jan. 4th, 2019, Enel Green Power North America has utilized the Proxy Revenue Swap (PRS) hedging structure to support the revenues of 295 MW of its 450 MW High Lonesome wind project in Texas – marking it the largest PRS ever signed.

“The wind industry has made great strides in driving down costs over the last decade,” said Hannah Hunt, Deputy Director for Electricity Policy and Demand, American Wind Energy Association (AWEA). “More recently we have seen improvements in driving down soft costs and REsurety’s approach of using weather and pricing data to reduce volatility risk is another great success story for the industry.”

Recent announcements by clean energy pioneers such as Microsoft in the U.S. and Orora in Australia demonstrate that buyers of renewable energy are also embracing REsurety products to manage the volatility associated with their purchases of clean energy. Both companies, as well as a third, undisclosed corporate buyer, contracted for products that will help them manage the cost volatility of their renewable energy purchases and will become an ongoing part of their procurement processes. In 2018 REsurety closed 19 new transactions across its Proxy Revenue Swap, Volume Firming Agreement (VFA), Balance of Hedge and Proxy Generation PPA product lines.   

“Taking on and managing the risks associated with vPPAs has become a real hurdle for corporate purchasers of renewable energy,” said Roberto Zanchi from Rocky Mountain Institute’s Business Renewables Center. “The early success of risk mitigation contracts as a standard part of the procurement process sets a strong precedent for other companies who are similarly eager to achieve sustainability goals while mitigating financial risk exposure.”

As the global clean energy industry matures, the combined risks of power market volatility and intermittent fuel sources have migrated away from governments and utilities to the producers and end-consumers of clean energy.  That increasing complexity and scale of risk requires a new breed of information and risk management products. REsurety has led the way in developing those tools in collaboration with Allianz Global Corporate & Specialty, Inc’s Alternative Risk Transfer unit, Nephila Climate and more recently Microsoft.

REsurety’s expertise in weather and energy market price information serves as the foundation for the successful insurance products that are offered by REsurety’s partners Nephila and Allianz. REsurety’s extensive proprietary data systems for weather and energy markets provides insight into the value and risk of weather-fueled renewable power generation. This constantly growing and expansive dataset, and related analytics, enables REsurety and its partners to offer a range of risk mitigation products catered to meet the specific needs of clean energy buyers and sellers.

Nephila Climate Announces First Proxy Revenue Swaps for Wind Project Re-Powering

Ares Management uses PRS structure to protect long term cash flows from a three-project portfolio in ERCOT totaling approximately 400MW of nameplate capacity.

HAMILTON, Bermuda, Feb. 28, 2019 /PRNewswire/ — Nephila Climate (“NCx”), the weather and ESG-driven specialty division of Nephila Holdings Ltd. announced the first use of a Proxy Revenue Swap (“PRS”) for the re-powering of a wind project. Ares Management Corporation, a leading global alternative asset manager, is the first to utilize the PRS structure for a repowered project. A PRS is a hedging contract that provides renewable energy projects with protection against exposure to the risks inherent in relying on a weather-driven fuel source, in addition to power price volatility.

A fund managed by Ares’s Infrastructure and Power strategy used three different PRS contracts to facilitate the financing for the acquisition and re-powering of the wind power portfolio from BP in the ERCOT region. The three-project portfolio included Sherbino Mesa 2, Trinity Hills and Silver Star.

“Just as the PRS has now become a standard product for de-risking merchant renewable energy projects, we expect it to play a key role in helping sponsors to finance the repowering of wind projects,” said Richard Oduntan, CEO of NCx. “With a forecasted surge in repowering projects over the next several years, we are pleased that the Ares PRS transactions will be the vanguard of many more to come.”

The projects entered into ten-year PRS contracts with Allianz Global Corporate & Specialty, Inc.’s Alternative Risk Transfer (ART) unit, in partnership with Nephila Climate. REsurety, Inc. provided the risk analytics needed to support the PRS transactions and will serve as the calculation agent on an ongoing basis.

“We continue to break new ground with PRS in using it to support the re-powering of wind projects,” stated Karsten Berlage, managing director, Allianz ART. “We are pleased to collaborate with NCx yet again on another ‘first,’ and to help ARES manage the long-term revenue risks for these projects.”

According to Bloomberg New Energy Finance, the market for re-powering is expected to surge in the next two years with 1.25 and 2.02 GW of re-power projects predicted to be completed in 2019 and 2020, respectively, in the US alone.

Reposted as in PR Newswire.

Quinbrook closes financing on Ranchero Wind Farm in Texas

Quinbrook announces that they have closed financing on Ranchero Wind Farm in Texas, a 300MW project, via a Proxy Revenue Swap with Allianz Global & Specialty, Inc.’s Alternative Risk Transfer unit (‘Allianz’), in partnership with Nephila Climate. REsurety provided the risk analytics supporting the PRS transaction.

LONDON and HOUSTON, Jan. 17, 2019 /PRNewswire/ — Quinbrook Infrastructure Partners (‘Quinbrook’), a specialist investor in low carbon energy infrastructure, today announced that its portfolio company, Scout Clean Energy LLC (‘Scout’) has closed construction financing and tax equity commitments on the 300MW Ranchero Wind Farm located in Crockett County, Texas (‘Ranchero’).

The Ranchero project is expected to be operational by year-end 2019 and has been developed from inception by the Scout team. Ranchero will utilize 120 of the latest generation GE 2.5MW wind turbines with 127m rotors and has secured a 10-year Proxy Revenue Swap with Allianz Global & Specialty, Inc.’s Alternative Risk Transfer unit (‘Allianz’), in partnership with Nephila Climate. REsurety provided the risk analytics supporting the PRS transaction and will serve as the calculation agent on an ongoing basis. Construction financing, including letters of credit, is being provided by KeyBank. GE Energy Financial Services (‘GE EFS’) underwrote and committed a portion of the tax equity.

Scout has entered into a fixed price balance of plant construction agreement with RES Americas, with construction management to be undertaken by Harvest Energy Services, a Scout affiliate.

David Scaysbrook, co-founder and Managing Partner of Quinbrook, said: “It is especially pleasing to have closed a major new financing and commenced construction of the first project to be developed from scratch by the Scout team. Ranchero has the potential to be a significant new wind project for the Texas power market and enjoys a strong wind resource. Securing Allianz as Ranchero’s offtake partner supports our view of the quality of the project and its compelling wind resource fundamentals. Including the 200MW Persimmon Creek wind farm recently completed and already operational, Scout’s operating portfolio is targeted to exceed 1GW within the next 18 months and is well on the way to exceeding our 2GW growth target by 2021.”

“Quinbrook and the Scout team are pleased to have closed and launched construction of another utility scale wind project with distinguished partners and the opportunity to employ new financing and off-take structures in the Ranchero transaction. We believe Ranchero is an exceptional wind project and the transaction has attracted several high-quality partners in GE Renewable Energy, GE EFS and KeyBank,” said Jeff Hunter, Senior Managing Director of Quinbrook. “This year we expect to close and commence construction on several additional wind projects in the Scout portfolio which are located across a diverse spectrum of US power markets.”

Together, Quinbrook and Scout have rapidly expanded their utility scale US wind project portfolio to over 2.3GW of potential renewable power capacity, spanning 13 projects in 10 states.

Quinbrook and Scout were advised by Akin Gump Strauss Hauer & Feld LLP and Paragon Energy Advisors.

About Scout Clean Energy

Scout Clean Energy (www.scoutcleanenergy.com) is a North American wind energy developer and owner-operator.  Scout is developing over 2.3 GW of PTC qualified wind projects across 10 US states covering most of the continent’s power markets. Scout’s operations affiliate Harvest Energy Services, Inc. provides independent O&M and construction management services to the wind industry. Scout and Harvest together have over 125 employees and are based in Boulder, Colorado.

About Quinbrook

Quinbrook Infrastructure Partners (www.quinbrook.com) is a specialist investment manager focused exclusively on lower carbon and renewable energy infrastructure investment and operational asset management in the US, UK and Australia. Quinbrook is led and managed by a senior team of power industry professionals who have collectively invested over US$ 17 billion in energy infrastructure assets since the early 1990’s, representing over 30GW of power supply capacity. Quinbrook’s investment and asset management team has offices in Houston, London, Jersey, and the Gold Coast of Australia. Quinbrook has completed multiple investments in both utility and distributed scale wind power, gas fired power reserve and ‘smart grid’ projects in the US, UK and Australia and currently manages Cape Byron Power (www.capebyronpower.com), one of Australia’s largest base-load 100% renewable power generators.

Reposted as in PR Newswire.

Enel Starts Construction in U.S. of Its Largest Wind Farm Leveraging New Offtake Strategy

Italian energy giant Enel utilizes the largest Proxy Revenue Swap signed to date to support construction of its largest wind farm globally.

  • The around 450 MW High Lonesome wind project will be the largest wind farm in Enel’s global renewables portfolio
  • The energy generated by a 295 MW portion of the project will be hedged through a long-term Proxy Revenue Swapa risk management strategy for renewable energy projects, making it the largest deal of its kind for a single plant by capacity to be signed 
  • The project will involve an overall investment of around 600 million US dollars

ROME and BOSTON, Jan. 04, 2019 (GLOBE NEWSWIRE) — Enel, through its US renewable subsidiary Enel Green Power North America, Inc. (“EGPNA”), started construction of the around 450 MW High Lonesome wind farm in Upton and Crockett Counties, in Texas. Once completed, High Lonesome will be the largest wind farm in Enel’s global renewables portfolio. The energy generated by a 295 MW portion of the wind farm will be hedged through a Proxy Revenue Swap (“PRS”), a risk management strategy aimed at minimising price and weather-related risks.

“The start of construction of our largest wind project to-date represents a major commitment to growing our business in the US and specifically in Texas,” said Antonio Cammisecra, Head of Enel Green Power. “The project underscores our ability to work with partners to tailor energy solutions to fit their needs and continue to manage and deliver to our customers the complex deals necessary in today’s evolving energy market. We look forward to continuing to serve as the partner of choice, dedicated to delivering a sustainable energy future.”

Investment in the construction of High Lonesome amounts to approximately 600 million US dollars and is part of the investment outlined in Enel’s 2019-2021 strategic plan. The project is currently financed through the Group’s own resources and is expected to enter into operations by the end of 2019. Once fully operational, the wind farm will be able to generate around 1.7 TWh annually, while avoiding the emission of over 1.1 million tons of CO2 per year.

Enel has entered into a PRS for a 295 MW portion of the project with insurer Allianz Global Corporate & Specialty, Inc.’s Alternative Risk Transfer unit (Allianz), and Nephila Climate, a provider of weather and climate risk management products. The PRS is a financial derivative agreement designed to produce stable revenues for the project regardless of power price fluctuations and weather-driven intermittency, hedging shape risk in addition to risk associated to price and volume.

Under this agreement, High Lonesome will receive fixed payments based on the expected value of future energy production, with adjustments payed depending on how the realised proxy revenue of the project differs from the fixed payment. The PRS for High Lonesome, which is the largest by capacity for a single plant globally and the first agreement of its kind for Enel, was executed in collaboration with REsurety, Inc., a leader in renewable energy risk management and information services.

The construction of High Lonesome is a strong testament to the popularity and success of innovative renewable energy protections,” said Karsten Berlage, Managing Director, Allianz Risk Transfer. “The majority of today’s stakeholders champion the continued growth of renewables and that is why Allianz is committed to flexible strategies such as the PRS that mitigate those risks – long term.

Renewable energy projects are under increasing pressure to deliver predictable returns despite the increasing volatility of the value of intermittent generation,” said Lee Taylor, Co-Founder and CEO, REsurety. “We developed the Proxy Revenue Swap specifically to deliver unrivalled certainty of cash flows, regardless of power price volatility and weather-driven intermittency. We are delighted to have had the opportunity to collaborate with Enel, Allianz and Nephila to bring the largest PRS transaction to fruition.

In Texas, Enel currently operates the 63 MW Snyder wind farm, located in Scurry County.

Enel Green Power North America, part of Enel Green Power, is a leading owner and operator of renewable energy plants in North America with projects operating and under development in 24 US states and two Canadian provinces. The company operates around 100 plants with a managed capacity of around 5 GW powered by renewable hydropower, wind, geothermal and solar energy. The company is currently the largest wind operator in Kansas and Oklahoma.

Enel Green Power is the Enel Group’s business line dedicated to the development and operation of renewables across the world, with a presence in Europe, the Americas, Asia, Africa and Oceania. Enel Green Power is a global leader in the green energy sector with a managed capacity of around 43 GW across a generation mix that includes wind, solar, geothermal, and hydropower, and is at the forefront of integrating innovative technologies into renewable power plants.

Reposted as in Enel.

Microsoft: Buying renewables should be easy

Microsoft discusses their co-development and adoption of Volume Firming Agreements: a tool that enables PPAs to more effectively serve as protection against energy price fluctuations.

Buying renewable energy should be easy — here’s one way to make it less complex

By Brian Janous, Microsoft General Manager of Energy and Sustainability; Kenneth Davies, Microsoft Director of Innovation for Energy Strategy & Research; and Lee Taylor, cofounder and CEO, REsurety

It would be difficult to overestimate the impact that corporate procurement of renewable energy, primarily through power purchase agreements (PPAs), has had on the overall renewable market. In less than a decade, renewable energy created from corporate PPAs went from zero to more than 13 gigawatts in the U.S. alone.  Microsoft is one of the largest players in this market, beginning with a 110-megawatt wind project in Texas in 2013 to a portfolio of more than 1.2 gigawatts in six states and three continents.

This rapid growth, both within our portfolio and beyond, is because these deals are good for business. Renewable energy agreements help companies meet sustainability commitments customers increasingly expect and – if structured properly – do so in a way that provides a hedge against the risk of rising electricity costs on the open market. The fuel for renewable energy projects – the wind and the sun – are free, enabling a fixed price over the length of the agreement. However, as the market has matured, it’s become clear that other risks and complexities exist within the PPA structure that may inhibit their effectiveness as risk management tools. The failure to simplify this complex process and mitigate the risk assumed by the buyer could endanger the corporate procurement market, causing it to slow or stall out completely.

We want to see continued growth of renewables. That is why today, Microsoft and REsurety, along with their partners at Nephila Climate (“Nephila”) and Allianz Global Corporate & Specialty, Inc.’s Alternative Risk Transfer unit (Allianz) announced a new solution that mitigates those risks. We’re calling it a volume firming agreement (VFA), and Microsoft, in addition to co-developing it, will become the first adopter.

The concept of a VFA has its roots in late 2010, when Nephila Capital approached several of the first corporate renewable energy buyers with the idea of helping them manage the risks inherent in PPAs. At the time, however, the idea was just that. Unable to find a corporate buyer willing to put in the effort to help co-develop what would become the VFA, Nephila elected instead to sponsor an MBA project at the Tuck School of Business at Dartmouth College, led by Lee Taylor. Upon graduation, Taylor turned that concept into a company, REsurety. In 2016, Nephila and REsurety finally found that corporate partner in Microsoft, when we signed a PPA with Allianz for the output of the 178-megawatt Bloom wind project in Kansas. This was the first Proxy Generation PPA, winning honors as North American Wind Project of the Year, and laying the groundwork for today’s VFA.

VFAs are intended to be a simple fix to a big challenge with renewable energy PPAs, namely that these deals expose the buyer to all the weather-related risks of power production, and the inherent intermittent nature of wind and solar means there are hourly issues to be addressed. Put simply, the power needs of buyers are static but the power from the project varies on a day-to-day, hour-to-hour basis.

While it’s true that the fixed-price nature of PPAs provide the buyer some protection against a long-term increase in price, the hourly variability of wind and solar creates near-term complexity and risk. In periods when the wind or solar project is producing more than average, the market value of this energy is often lower due to the impact of additional supply in the market. Conversely, in periods when it is producing less than average, the market price is often high.  In other words, volume and price move inversely. This variability and the financial impact are difficult for even the savviest energy buyers and a substantial deterrent to smaller companies, as well as retailers, looking to engage in the renewables market.

But what is undesirable to buyers is very attractive to others, namely insurance companies whose core business revolves around taking weather-related risks, including temperature, rain, snow, wind and so on. VFAs effectively remove the risk related to how future weather conditions will impact the financial value of a PPA from buyers and reallocates it to people who want that risk.

As the market for VFAs and similar products grow, we believe it will create new incentives for those who now bear these risks to procure storage resources and other assets capable of physically balancing the intermittency of renewables. Through the aggregation of risk, these insurers will be able to procure resources at economies of scale that even Microsoft is unable to achieve. In that way, today’s financial firming solution is tomorrow’s physical firming solution, accelerating the adoption of storage and other resources required to eventually transition to a 100 percent carbon-free power generation system.

VFAs are not a replacement for PPAs, nor are they a product Microsoft is selling. They are contracts that simply sit atop new PPAs, or existing PPAs, mitigating the risk to the buyer. Microsoft has signed three of these contracts with Allianz, in conjunction with their partners at Nephila, covering three wind projects in the U.S. in Texas, Illinois and Kansas, totaling almost 500 megawatts. As Microsoft continues to purchase renewable energy to power our operations, we anticipate utilizing VFAs to firm the energy and match our consumption on an hourly basis.

At Microsoft, we are committed to driving a more sustainable future beyond our own four walls. That is why our corporate energy commitments are far broader than just megawatts. We intend to support and enable the transformation of the energy sector using our buying power and innovations so everyone can benefit. REsurety is also focused on enabling the growth of renewable energy by providing tools to understand and manage risks.

The partnership between our two organizations leverages deep expertise in markets, risk and the challenges buyers face in these markets. That is why we’re confident that innovations like the VFA will make it cheaper and easier to procure renewable energy, enabling corporate buyers of all sizes, as well as retailers, to play a role in enabling the transition from fossil fuels to clean energy.

We invite other corporate buyers to take a more in-depth look at our white paper expounding on the role of Proxy Generation PPAs in the implementation of VFAs, co-authored by Microsoft, REsurety and Orrick, Herrington and Sutcliffe LLP, available today here, or contact us. We’re looking forward to a future where even more corporations can participate in the renewable energy market, which would be a big step toward a low-carbon future for the planet.

Reposted as in Microsoft.

Macquarie Capital executes first Proxy Revenue Swap in Australia

Nephila Climate And Allianz Close Proxy Revenue Swap And Corporate PPA For Macquarie Capital’s Lal Lal Wind Farm

HAMILTON, Bermuda, June 19, 2018 /PRNewswire/ — Nephila Climate (“NCx”), the weather and ESG-driven specialty division of Nephila Holdings Ltd., together with Allianz Global Corporate & Specialty’s alternative risk transfer unit (“Allianz”), announced today that they have closed two related transactions to offset future price and volume risk for the Lal Lal wind farm project (“Lal Lal”), being developed in Victoria, Australia. Lal Lal is owned by a partnership comprising InfraRed Capital Partners, Macquarie Capital and Northleaf Capital.

One of the transactions is a Proxy Revenue Swap with Lal Lal and will provide the new wind farm with a high degree of revenue certainty, with Nephila Climate and Allianz assuming production volume, timing of energy generation and future energy price risks. The second transaction will help Orora Ltd., a large consumer of electricity, lock in the cost of procuring baseload green energy from the Lal Lal project, without the production variability traditionally associated with power purchase agreements. These two transactions combined, mark the first time a Proxy Revenue Swap has been applied to wind energy in Australia.

The 228 MW Lal Lal project, located in Central Highlands, Victoria, expects to begin producing energy in the third quarter of 2019. In total, the Proxy Revenue Swap product has now been transacted on more than one GW of renewable energy (wind and solar) development projects.

Nephila Climate’s CEO Richard Oduntan said: “NCx is delighted to provide innovative solutions to another wind farm development while simultaneously helping a commercial and industrial consumer of electricity purchase green energy in the form that suits their needs.”

Allianz’s Managing Director Karsten Berlage also noted “We are excited to create and commercialize this new risk management tool for the Australian renewables industry following our successful provision of hedging solutions for investments in North America.”

Key advisers on the transactions included:

  • REsurety as risk analytics provider to Nephila and Allianz and will also serve as calculation agent.
  • Risk Solutions International (Pty) Ltd and CQ Partners as local intermediaries 
  • Norton Rose Fulbright as legal advisers to Allianz and Nephila
  • Herbert Smith Freehills as legal advisers to Macquarie Capital 
  • Andrew George from Amanzi as commercial adviser to Macquarie Capital

Reposted as in CISION PR Newswire.

Invenergy secures long term revenues for Upstream wind farm with Proxy Revenue Swap

The transaction between Invenergy and Allianz Risk Transfer marks the fourth Proxy Revenue Swap to close in the U.S.

Allianz Closes Proxy Revenue Swap for Invenergy’s Upstream Wind Farm

  • 10-year Proxy Revenue Swap Hedge for Invenergy Upstream Wind Energy Center in Antelope County, Nebraska, US, ensures stable revenues despite uncertainty of intermittent wind resource
  • Allianz cooperates with Nephila and REsurety to provide innovative financing solution

NEW YORK & CHICAGO–(BUSINESS WIRE)–Allianz Global Corporate & Specialty’s (AGCS) alternative risk transfer unit (“Allianz”) has executed a 10-year Proxy Revenue Swap with Invenergy, North America’s largest privately held renewable energy company, for its Upstream Wind Energy Center, protecting the new wind project’s revenues from the financial risks associated with future energy prices and the uncertain volume and timing of energy generation. The 202.5MW Upstream project, located in Antelope County, Nebraska, expects to complete construction and begin producing energy in the fourth quarter of 2018.

The Upstream transaction marks the fourth Proxy Revenue Swap to be executed since the innovative hedging product was launched in 2016, bringing the total of Proxy Revenue Swap-hedged wind project capacity to nearly 700MW. As with prior Proxy Revenue Swap transactions, Nephila Climate (“Nephila”) partnered with Allianz in managing the risks associated with the transaction. REsurety, Inc. (“REsurety”) provided the risk analytics used to support underwriting of the hedge prior to its close, and will serve as the calculation agent on an ongoing basis.

“At Invenergy, we apply innovative thinking to not just development, but also to financing of our clean energy projects. We’ve been considering the Proxy Revenue Swap structure since it came to market, and saw a great opportunity to apply this innovative new hedging structure to Upstream. De-risking our future revenues with this hedging structure was critical to securing the project’s financing,” said Jim Shield, EVP and Chief Commercial Officer at Invenergy.

Allianz’s Managing Director Karsten Berlage added: “Allianz was delighted to collaborate with the Invenergy team to help bring this project to fruition. The Upstream transaction serves as further confirmation of the value that wind projects see in the holistic revenue risk management enabled by the Proxy Revenue Swap product.”

As North America’s largest privately held renewable energy company, Invenergy and its affiliated companies develop, own, and operate large-scale renewable and other clean energy generation and storage facilities in the Americas and Europe.

Invenergy and its affiliated companies have developed more than 17,300 megawatts of projects that are in operation, construction or contracted, including wind, solar, natural gas-fueled power generation and energy storage projects.

Allianz Global Corporate & Specialty (AGCS) is the Allianz Group’s dedicated carrier for corporate and specialty insurance business. AGCS provides insurance and risk consultancy across the whole spectrum of specialty, alternative risk transfer and corporate business.

Nephila is AGCS’s strategic partner in weather and climate-linked risk management and works in collaboration with the corporate and specialty insurer to manage the risk exposures of the Proxy Revenue Swap, as part of a larger investment portfolio which includes other weather and climate-linked risks across a range of industries from energy to agriculture. “We are very pleased to have executed this hedge to help Invenergy manage its revenue risk for the project, as further proof that the leaders in renewable development see real value in this structure,” said Richard Oduntan, CEO at Nephila Climate.

REsurety, Inc. is the leader in hedge underwriting and settlement services for generation-linked risk management structures for the wind industry. “The uncertainty of the weather as a fuel is an ever-growing source of risk for the energy industry, and the Upstream transaction is a terrific example of how the market is responding to that challenge through the adoption of new risk management tools,” said Lee Taylor, Co-Founder and CEO at REsurety.

About Allianz Global Corporate & Specialty

Allianz Global Corporate & Specialty (AGCS) is the Allianz Group’s dedicated carrier for corporate and specialty insurance business. AGCS provides insurance and risk consultancy across the whole spectrum of specialty, alternative risk transfer and corporate business: Marine, Aviation (incl. Space), Energy, Engineering, Entertainment, Financial Lines (incl. D&O), Liability, Mid-Corporate and Property insurance (incl. International Insurance Programs).

Worldwide, AGCS operates in 32 countries with own units and in over 210 countries and territories through the Allianz Group network and partners. In 2016, it employed around 5,000 people and provided insurance solutions to more than three quarters of the Fortune Global 500 companies, writing a total of €7.6 billion gross premium worldwide annually.

AGCS SE is rated AA by Standard & Poor’s and A+ by A.M. Best.

About Invenergy

Invenergy drives innovation in energy. Invenergy and its affiliated companies develop, own, and operate large-scale renewable and other clean energy generation and storage facilities in the Americas and Europe. Invenergy’s home office is located in Chicago and it has regional development offices in the United States, Canada, Mexico, Japan and Europe.

Invenergy and its affiliated companies have developed more than 17,300 megawatts of projects that are in operation, construction or contracted, including wind, solar, natural gas-fueled power generation and energy storage projects. For more information, please visit www.invenergyllc.com.

Bloom Wind recognized as North American Wind Deal of the Year

Capital Power’s Bloom Wind is recognized for its use of the first Proxy Revenue Swap hedging structure to secure long term revenues.

EDMONTON, AB–(Marketwired – March 16, 2017) – Capital Power’s Bloom Wind project was recognized by infrastructure journal and project finance magazine, IJGlobal, as the North American Wind Deal of the Year. The annual IJGlobal Awards, which recognize and celebrate the best in energy and infrastructure deals over the past year, were handed out in New York on March 15, 2017.

Capital Power’s Bloom Wind project earned the award recognition for the use of an innovative 10-year Proxy Revenue Swap agreement with Allianz Risk Transfer (ART), a subsidiary of Allianz SE, the worldwide insurance and asset management group, covering 100 per cent of the project’s output. The unique product was created and commercialized through a partnership amongst ART, Nephila Capital Ltd., REsurety Inc. and Altenex LLC, which swaps the floating revenues of the wind farm — those driven by the hourly wind resource and power prices — for a fixed annual payment.

“We’re proud to pioneer the use of this innovative risk-management solution for hedging potentially volatile revenues of wind farms at Bloom Wind,” said Paul Wendelgass, Capital Power Director, Business Development. “The agreement secures long-term predictable revenues for investors, which provided an opportunity for Capital Power to secure a renewable energy tax-equity investment for Bloom Wind with Goldman Sachs Alternative Energy Group in December 2016.”

The first-of-its-kind product was developed by ART to help project owners manage the revenue volatility associated with the wind resource variability related to large-scale wind projects. Capital Power is among the first Independent Power Producers in North America to utilize a proxy revenue swap agreement as a risk-management solution for hedging revenue volatility of wind farms. The product is an alternative to securing a traditional contracted off-taker through a Power Purchase Agreement and has potential to be replicated for other renewable projects in the U.S. and globally.

“This pioneering solution enables both investors and corporations alike to launch sizable renewable energy projects, and is a key growth area for Allianz,” said Karsten Berlage, Managing Director at Allianz Risk Transfer. “By circumventing high up-front costs associated with clean energy, these projects will be brought online at a much faster pace and we are very proud to partner with Capital Power and to support Microsoft’s largest wind energy purchase to date.”

In November 2016, Microsoft Corp. became the first buyer to participate in this structure, acquiring the environmental attributes connected to Bloom Wind from ART for a 10-year period. The combined output from Bloom and a Wyoming wind farm will produce enough energy on an annual basis to cover the annual energy used at Microsoft’s Cheyenne, Wyoming, datacenter.

“Microsoft is constantly looking for new ways to accelerate the adoption of clean energy,” said Christian Belady, general manager of cloud infrastructure strategy and architecture at Microsoft. “We worked closely with ART and Capital Power to come up with the innovative finance model. This approach has the potential to bring more clean energy online, faster, and we’re proud that our participation helped make this project a reality.”

The 178 megawatt Bloom Wind project, located in Kansas is situated within one of the strongest wind regimes in the U.S. Construction of the project began in August 2016 and is expected to be completed on time and on budget in the third quarter of 2017.

About Capital Power


Capital Power (TSX: CPX) is a growth-oriented North American power producer headquartered in Edmonton, Alberta. The company develops, acquires, operates and optimizes power generation from a variety of energy sources. Capital Power owns more than 3,200 megawatts of power generation capacity at 18 facilities across North America. More than 700 megawatts of owned generation capacity are in advanced development in Alberta and under construction in Kansas.

About Allianz Risk Transfer


Allianz Risk Transfer (ART) is the center of competence for alternative risk transfer business within the Allianz Group offering tailor-made insurance, reinsurance and other non-traditional risk management solutions to industrial and financial clients worldwide. Founded in June 1997, the company is a wholly-owned subsidiary of Allianz Global Corporate & Specialty SE. ART operates through affiliated companies with offices in Amsterdam, Bermuda, Dubai, Liechtenstein, London, New York and Zurich. Its client base spans across all industry sectors and its solutions are most effective for clients facing unusual or complex risks, where traditional (re)insurance or financial products are inadequate. As of today, ART AG is rated AA- by Standard & Poor’s and A+ by A.M. Best. www.art.allianz.com

Apex Clean Energy discusses their use of Proxy Revenue Swaps to expand clean energy

David Clemens, Apex Clean Energy’s Director of Finance, discusses how the innovative Proxy Revenue Swap hedging structure has enabled Apex to bring more clean energy to market.

This past summer, Apex closed on the joint financing for the Cotton Plains Wind, Old Settler Wind, and Phantom Solar energy facilities, all located in Texas. One of the many unique features of the transaction was our employment of a novel financial hedge product called a proxy revenue swap, or PRS, for Old Settler Wind. Without the economic certainty that the PRS brings to that project, Apex would not have been able to source the roughly $330 million in debt and equity capital necessary to build and operate the facilities. But because the PRS was relatively new and not well understood in the financial markets, its presence at Old Settler presented unique challenges during the financing process.

Innovation Expands Investment Opportunities

Financial hedges are not new to the energy industry. A more common version, often called a fixed-for-floating swap, is well understood in the market. In a typical fixed-for-floating swap, a project will sell the electricity it generates into the spot, or merchant, market. The price of energy in the spot market is in constant flux, and in certain circumstances can fluctuate wildly from hour to hour. The vast majority of project financing parties will not invest in a project selling power into the spot market because they are uncomfortable with the cash flow instability, which increases the uncertainty that their investment will be repaid. To counter this risk and make the project more attractive to financing parties, the project owner will enter into an agreement with a counterparty—typically a bank or an energy company—whereby the counterparty will agree to pay the project a fixed price for energy generated by the project, in return for the value that the project receives from the spot market. For instance, let’s say Old Settler Wind agreed to a swap at a price of $30 per megawatt-hour (MWh). Then, if Old Settler were to sell one MWh into the ERCOT market at $20, it would transfer this $20 to the swap counterparty, and the swap counterparty would transfer $30 back to Old Settler. Likewise, if the MWh sold for $35, the project would send $35 to the swap counterparty, and the swap counterparty would still send $30 back to Old Settler. Thus, the project is swapping the “floating” price received for that MWh (i.e., $20 or $35) for the fixed price of $30. This arrangement allows the project to rely on a steady cash flow—$30/MWh—which investors can rely on when calculating their expected investment return.

Eliminating Wind Production Risk to Enhance Deal Value

Under a traditional fixed-for-floating swap, however, the swap counterparty will not take a position on how many MWh a project is expected to produce (in other words, they do not want to take the risk relating to the productivity of the wind resource). To avoid this, traditional swap counterparties will only agree to swap the P99 volume produced by the project (that is, the MWh that a project can be expected to produce with 99% certainty). As a result, all of the energy that a project generates above the P99 generation level is not subject to the swap; this energy is sold into the spot market without the benefit of a fixed price. Because most investors place a lower value on the energy that does not have a guaranteed price, they discount this post-P99 production when sizing their investment amount. Depending on the specifics at a particular wind project, the amount of post-P99 production can be considerable, and failing to account for this production can lead to a dramatically reduced investment from financing parties.

Enter the proxy revenue swap. At its core, the PRS guarantees a project a fixed amount of revenue, regardless of how many MWh the project actually produces. Thus, even if the wind doesn’t blow for an entire year—and likewise the wind farm doesn’t generate any electricity—the project will still receive revenues from the PRS counterparty. In return, the project will turn over all the revenues that it actually receives from selling its energy into the spot market over that same period of time. The amount of revenue guaranteed under a PRS is primarily a function of the counterparty’s evaluation of the project’s wind profile (PRS counterparties are often insurance companies with experience evaluating weather-related risk).

Put simply, a traditional fixed-for-floating swap takes price risk off the table. The PRS takes this concept one step further by also taking wind production risk off the table. This results in more guaranteed revenue for the project, thus allowing the project to finance a greater portion of its capital costs.

Although the PRS counterparty is comfortable taking price risk and wind risk, it does not take operations or basis risk—those stay with the project. In oversimplified terms, operations risk is the risk that the project will not convert wind into electricity as efficiently as expected due to operational issues such as turbine maintenance. Basis risk is the risk that the electricity price at the “hub”—where electricity is traded on the spot market—will be less than the electricity price at the actual  location, or “node,” where the electricity enters the grid. (Basis is a complicated topic beyond the scope of this article, but the most common reason for differences in hub and node prices is inadequate transmission.)

Putting the PRS to the Test

The novelty and complexity of the PRS came into focus when Apex began the financing process. Investors tend to prefer projects and concepts that are well understood—no one wants to lend money on the basis of a new product that turns out to be fundamentally flawed. For this reason, each of the sponsor equity, debt, and tax equity investors undertook a detailed review of the PRS and insisted on being fully satisfied with its risk profile prior to funding. Unlike the vast majority of their investments, the investors had no previous experience with this product; they had to learn everything from scratch. The detailed review included analysis by multiple independent engineers, consultants, and law firms, as well as the investors’ in-house legal, accounting, and engineering teams.

This painstaking due diligence process placed a substantial burden on Apex. Many of my colleagues in the asset management, power marketing, resource assessment, and legal departments will recall a seemingly endless series of conference calls to explain how the PRS works and to structure the transaction to fit the needs of the investors. All of this was in service of helping five different investors complete their diligence and commit their share of roughly $330 million in capital costs. At the end of the process, our financing efforts were successful, and the Cotton Plains Wind, Old Settler Wind, and Phantom Solar projects are now under construction.

Benefits of the PRS

A long-term power purchase agreement (PPA) with an investment-grade counterparty remains the gold-standard revenue option for financing a wind project. Apex’s power marketing team has been actively searching for alternative revenue sources capable of standing up to the scrutiny of the financing process. Apex successfully closing on the financing for the trio of Texas projects in July 2016 demonstrates that the PRS fits this mold.

In fact, the PRS has already become a powerful asset in our power marketing toolbox. Shortly after closing on the hybrid portfolio, we successfully incorporated a PRS for a portion of the generation at our Grant Plains Wind project in Oklahoma, which closed in August and is currently under construction.

And Apex is now actively modeling the PRS at many of our other projects. We believe the PRS will remain a viable path to market complementing traditional PPAs and financial hedges, and we expect the PRS financing process to become smoother as we apply the lessons learned from these recent projects.

Microsoft buys power from Bloom Wind Farm

Microsoft collaborates with Capital Power and Allianz Risk Transfer to buy clean power from Bloom Wind Farm – in connection with the project’s existing Proxy Revenue Swap.

REDMOND, Wash. — Nov. 14, 2016 — On Monday, Microsoft Corp. announced its largest purchase of wind energy to date with the signing of two agreements. Combined, these agreements represent 237 megawatts of wind energy, which brings Microsoft’s total investment in wind energy projects in the U.S. to more than 500 megawatts.

“Microsoft is committed to building a responsible cloud, and these agreements represent progress toward our goal of improving the energy mix at our datacenters,” said Brad Smith, president and chief legal officer at Microsoft. “Our commitment extends beyond greening our own operations because these projects help create a greener, more reliable grid in the communities in which we operate.”

Microsoft has contracted with Allianz Risk Transfer (ART) to fix its long-term energy costs and purchase the environmental attributes connected with the new, 178-megawatt Bloom Wind project in Kansas. The project is the first to use a novel structure developed by ART and designed to offset high upfront costs associated with the creation of large-scale wind projects. Microsoft is the first buyer to participate in this structure, which has the potential to bring clean energy projects online at a faster pace.

“It is important for investors in renewable energy projects to secure long-term, stable revenues, and our structure does just that,” said Karsten Berlage, managing director of ART. “We are thrilled to be partnering with Microsoft on this groundbreaking project.”

In addition, Microsoft has contracted with Black Hills Corp. subsidiary Black Hills Energy, under a long-term agreement, to purchase 59 megawatts of renewable energy certificates from the Happy Jack and Silver Sage wind projects, which are adjacent to Microsoft’s Cheyenne, Wyoming, datacenter. The combined output of the Bloom and Happy Jack/Silver Sage projects will produce enough energy on an annual basis to cover the annual energy used at the datacenter.

“Our longstanding partnership with Microsoft productively led to this landmark collaboration. This collaboration provided them the opportunity to utilize significantly more renewable energy while still ensuring the reliability they’ve come to expect through our energy infrastructure and generation resources,” said David R. Emery, chairman and CEO of Black Hills Corp. “We are proud to be a strong supporter and partner in their mission to power their datacenters with increased renewable energy resources, and look forward to our continued collaboration in the years ahead.”

Microsoft and Black Hills Energy also worked together to create a new tariff, available to all eligible customers, that allows the utility to tap the local datacenter’s backup generators, thereby eliminating the need for Black Hills Energy to construct a new power plant. The tariff received approval from the Wyoming Public Service Commission in July.

“We are constantly looking for new ways to approach energy challenges and avenues of engagement with our utility partners,” said Christian Belady, general manager of cloud infrastructure strategy and architecture at Microsoft. “The team worked closely with ART to come up with a completely new model to enable faster adoption of renewables. Likewise, the tight engagement with Black Hills created the opportunity for Microsoft’s datacenter to become an asset for the local grid, maintaining reliability and reducing costs for ratepayers. This kind of deep collaboration with utilities has great potential to accelerate the pace of clean energy, benefitting all customers — not just Microsoft.”

These are Microsoft’s third and fourth wind energy agreements, joining the 175-megawatt Pilot Hill wind project in Illinois and 110-megawatt Keechi wind project in Texas. In March, Microsoft also signed an agreement with the Commonwealth of Virginia and Dominion Energy Inc. to bring 20 megawatts of solar energy onto the grid in Virginia. These projects are in addition to the renewable and carbon-free energy Microsoft purchases from the grid mix in the markets in which it operates.

More information about this announcement is in the Microsoft on the Issues blog post by Microsoft President and Chief Legal Officer Brad Smith.

About Allianz Risk Transfer

Allianz Risk Transfer (ART) is the center of competence for alternative risk transfer business within the Allianz Group offering tailor-made insurance, reinsurance and other non-traditional risk management solutions to industrial and financial clients worldwide. Founded in June 1997, the company is a wholly-owned subsidiary of Allianz Global Corporate & Specialty SE. ART operates through affiliated companies with offices in Amsterdam, Bermuda, Dubai, Liechtenstein, London, New York and Zurich. Its client base spans across all industry sectors and its solutions are most effective for clients facing unusual or complex risks, where traditional (re)insurance or financial products are inadequate. As of today, ART AG is rated AA- by Standard & Poor’s and A+ by A.M. Best. www.art.allianz.com

About Black Hills Corp.

Black Hills Corp. (NYSE: BKH) is a customer-focused, growth-oriented utility company with a tradition of improving life with energy and a vision to be the energy partner of choice. Based in Rapid City, South Dakota, the company serves 1.2 million natural gas and electric utility customers in eight states: Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. The company also generates wholesale electricity and produces natural gas, oil and coal. More information is available at www.blackhillscorp.com.

About Microsoft

Microsoft (Nasdaq “MSFT” @microsoft) is the leading platform and productivity company for the mobile-first, cloud-first world, and its mission is to empower every person and every organization on the planet to achieve more. 

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://news.microsoft.com. Web links, telephone numbers and titles were correct at time of publication, but may have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at https://news.microsoft.com/microsoft-public-relations-contacts.

Allianz, Nephila, REsurety & Altenex partner to provide innovative Proxy Revenue Swap

The world’s first Proxy Revenue Swap is announced – securing long term revenues for Capital Power’s Bloom Wind Farm.

Allianz Risk Transfer (Bermuda) Limited (ART) and partners have developed an innovative risk management solution for hedging wind volume risks for wind farms. ART has executed a 10-year Proxy Revenue Swap with Capital Power’s Bloom Wind Farm, to be constructed near Dodge City, Kansas.

This new risk management tool for the wind power industry was created and commercialized through a partnership amongst ART, Nephila Capital Limited (Nephila), REsurety, Inc (REsurety) and Altenex, LLC (Altenex). The 10-year agreement will secure long-term predictable revenues and mitigate power generation volume uncertainty related to wind resources for the 178 MW Bloom Wind Farm.

“This new product line for the wind power industry will enable more efficient and cost-effective financing of wind generation projects,” said Karsten Berlage, Managing Director of ART. Due to the high upfront cost of modern utility-scale wind projects, it is important for investors in such projects to be able to secure long term stable revenues to underpin the investment.

Previously, traditional price-focused hedging solutions have been commonly used to try to address this, but this newly created Proxy Revenue Swap offers an entirely new form of revenue risk management for the wind power industry. Similar in concept to a tolling agreement or capacity payment, this novel structure swaps the floating revenues of a wind farm – those driven by the hourly wind resource and power prices – for a fixed annual payment. This transaction is the first in a robust pipeline of future wind financings and would also be feasible in other wind farm markets globally beyond the US.

The ART-led swap is unique in several aspects. “Recent advances in data availability for the US wind market as well as in risk assessment and modeling allowed this unprecedented scope of risk transfer within a single product, which is available for up to 10 years,” explained Berlage. “In contrast to more short-term and price-focused hedging approaches, for the first time price and wind volume risks of a wind farm have been managed at the tenor needed to support a project’s capital structure and balance sheet”, Berlage continues. “The result is a level of revenue certainty never before available to the wind industry.”

Each partner contributed highly specialized expertise to create this innovative swap solution. ART and Nephila leveraged their collective weather risk transfer expertise, risk capacity, underwriting sophistication and credit strength. REsurety has provided the specialized risk analyses relied upon for the structuring of the Proxy Revenue Swap and delivers ongoing services as the calculation agent for the transaction. Altenex supports the management of power price-linked risk as part of the Proxy Revenue Swap structure.

ART and Nephila have a long-standing partnership in the weather and catastrophe risk markets and have worked with REsurety since 2012 to develop risk transfer products for the wind power industry. More recently, through a partnership established between REsurety and Altenex in 2015, protection against low wind output has been expanded to include power price risk as well as generation volume-linked risk exposures.