Harnessing the wind and the sun to generate energy can be a high-risk, capital-intensive business. Based on our experience, efficient, effective risk management is critical to ensuring that new projects can secure capital commitments and that operating projects can meet the demands of existing investors and potential acquirers.
As the renewable energy industry evolves beyond the utility PPA model, so do the scale and complexity of risks faced by the buyers and sellers of clean energy. To help mitigate these risks, REsurety has pioneered the development and commercialization of a new suite of risk management tools for clean energy.
Contact us today to begin the conversation on your risk management strategy.
A renewable energy project can choose where to build and how to operate. However, it has no control over how much fuel (wind speed or sunshine) is available in a given hour, month or year, or what corresponding power prices will be.
Under a Proxy Revenue Swap, a renewable energy project exchanges its variable revenue stream for a fixed payment.
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A common tool to hedge energy price risk - and its impact on the revenues of an energy generation asset - is a fixed volume energy price swap. While this hedge structure, often called "Bank Hedge" or "P99 Hedge" hedges price risk, it does not hedge against – and in many cases increases – a clean energy buyer or seller’s exposure to the variability of the fuel resource: the weather.
A Balance of Hedge contract enables a renewable energy project to exchange that uncertain stream of value for a fixed amount.
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Every renewable energy project is different, and value comes in many forms: energy markets, capacity markets, environmental attributes, tax credits... All of those various streams of value have one thing in common: they are dependent on the weather due to the intermittent nature of renewable energy generation.
REsurety has pioneered the development of products and services to enable efficient and effective risk management for renewable energy projects. Does your project face a risk that doesn't fit into the products featured above? Give us a call - we'd love to learn more.
