In the post feed-in tariff world, more risk is being pushed to the investor side
European power trading innovation: The rise of PPAs
The end of guaranteed prices for renewables generation is sparking a revolution in risk management
A power-purchase agreement (PPA) sounds inherently very simple. One party agrees to sell power in certain volumes over a certain period for a certain price, the other to buy. But a renewable power asset is decidedly less simple, not producing a predictable volume of energy. Nor is the future price of electricity certain, or even observable beyond the liquid traded market. With PPAs the preferred method of underpinning the investment case in renewables assets, it is not surprising, Michael Waldner, CEO of software firm Pexapark tells Petroleum Economist, that understanding their price risk has become so important. Pexapark CEO Michael Wald
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