Renewable Analysis

Renewable Analysis

Case Studies

Renewable Project Exposure Analysis

A large global renewable company with a diverse portfolio of renewable assets was interested in acquiring additional wind projects.  The company had traditionally entered into long-term sales agreements to lock-in revenue projections; however, given the depressed nature of the electricity markets at the time, the company wanted to conduct an analysis to show the range of potential revenues from the various projects as well as an analysis of different hedging strategies to manage the revenue exposure.  This was accomplished by developing a diversified, multi-project risk profile that demonstrated the probabilistic range of revenue outcomes in total and by project.  Additionally, different hedge strategies were overlaid on the revenue-at-risk distributions to understand the resulting mitigation potential.  This allowed the company to make informed decisions on which project to invest in and which strategies to pursue.  

Renewable Energy Credit Exposure Reporting

A municipal water utility had recently made the decision to allow the long-term sales agreements associated with its hydro generation assets to expire.  This decision would allow them to enter the merchant generation market and created additional revenue opportunities such as the ability to sell its Renewable Energy Credits (“RECs”), capacity, and carbon-free products.  The company was interested in support to develop a mechanism for capturing the exposures, documenting the transactions, and developing a position report.  This was accomplished through customization of the Commodity Trading and Risk Management (“CTRM”) system they were currently using to capture the forward sales associated with the hydro generation.  This allowed the client to know, on a real-time basis, the current open REC and carbon-free position, the value of the position, and allowed them to report to key stakeholders on an as-needed basis.