Pexapark, a provider of software and advisory services for post-subsidy renewable energy sales, has formed a new partnership with ConWX, a provider of power forecasting services for global energy providers, to enable asset developers, owners and investors to more effectively site and value new renewable energy projects.
The agreement will see ConWX make its power and weather modelling data available to Pexapark users via the PexaQuote Price Reference platform. Combining these industry-leading data streams will help developers, producers and investors to swiftly quantify the value of new wind and solar asset investment opportunities.
They will be able to identify with pinpoint accuracy the Power Purchase Agreement (PPA) prices a project can achieve based on location and technology type, allowing fairer pricing for the sale of assets. The partnership also introduces the capability to optimise PPA structures based on local conditions.
Significant volatility in power pricing over the past 12 months has led to scrutiny on the renewables sector and its ability to deliver a smooth energy transition in Europe. In particular, low wind speeds have recently been singled out by industry opponents as a factor exacerbating high power prices off the back of natural gas shortages.
Pexapark’s market pricing analysis reveals that high production yields are not the only basis for choosing an optimal site location. The growth of renewables introduces a cannibalisation effect that can reduce potential prices. This means that sites that may have an identical wind or solar yield can perform very differently from a commercial perspective.
This wide variation highlights why it is important for developers and asset owners to understand how local weather conditions correlate with market pricing and cannibalisation – and, in turn, influence the true long-term value of a renewable energy project. By using meteorological and pricing data to identify the very best locations and optimal PPA structures, stakeholders can manage these risks and maximise the revenue potential of their new projects.
“While supply and demand dynamics mean there is no shortage of capital to be invested into high quality renewable energy projects and pipelines, there will inevitably be a market response to recent months of unprecedented volatility when it comes to asset valuations,” says Dr Werner Trabesinger, Head of Quantitative Products, Pexapark.
“To secure fair prices for PPAs, or a fair valuation at sale, asset developers and owners need certainty that they have fully accounted for the variables that impact long-term performance and profitability – namely the available resource and the market price. We’ve joined forces with ConWX, the leading provider of meteo data, to make PexaQuote the market’s most accurate tool for evaluating new assets and optimising potential revenue.”
Ewelina Reszke Hansen, Head of Sales and Business Development, ConWX, adds: “Location-specific meteorological and pricing data are both prerequisites for successful project development and operation in today’s market. As recent events show, resource availability and pricing are inextricably linked and cannot be looked at in isolation. Those who can most effectively integrate their essential data will be best placed to mitigate risks and secure accurate valuations for their projects.”