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.
A renewable energy project has no control over how much power prices will be in a given hour, month or year.
Under a Proxy Generation PPA, a renewable energy project exchanges its variable merchant revenue stream for a fixed dollar-per-megawatt-hour payment.
A common tool to hedge energy price risk is a Fixed Volume Swap, which is often called “Bank Hedge” or “P99 Hedge”. While this structure hedges price risk, it does not protect you, the clean energy seller, from volume volatility and shape risk – which is inherent to intermittent renewable energy generation.
The Balance of Hedge enables a renewable energy project to exchange its existing uncertain stream of value from their P99 Hedge for a fixed amount.