Lost Opportunity Gain
Power generators and renewable energy asset managers committed to PPAs and CfDs relinquish the merchant upside, adversely impacting revenues, limiting IRRs, asset values and exit valuations.
Our team of experts have conducted extensive research on how power price volatility impacts renewable energy risk management strategies.
Solar capacity growth has increased 350% since 2018. Our comprehensive analysis of this growth provides critical insights on the impact of local oversupply of solar energy on power prices.
Our proprietary analytics tools regularly evaluate the power production levels of renewable assets in specific power markets, to assess supply and demand, and identify the optimal application of the Paratus insurance policy comparing its benefits to traditional Power Purchase Agreements (PPAs).
We analyse historical trends and forward-looking financials, considering multiple parameters to assess the positive balance sheet impact of a Paratus insurance policy compared to PPAs.
Power generators and renewable energy asset managers committed to PPAs and CfDs relinquish the merchant upside, adversely impacting revenues, limiting IRRs, asset values and exit valuations.
The policy protects against adverse energy price movements whilst giving full merchant upside to the asset owner.
Over the duration of the policy, the insured realises higher revenues while achieving the same downside protection as a PPA. This enables enhanced dividend yields, interest coverage and exit valuations.
The policy improves a power generator's credit profile in two ways: 1. By guaranteeing revenues against declines in power prices, and 2. By capitalising on higher power prices.
A policy can be executed within two weeks, after KYC and on-boarding is complete. This is considerably faster than PPAs, which can take up to nine months to negotiate. The policy pays within 10 days of proof of loss.
Our proprietary underwriting and actuarial models are continuously refined to determine insurance premiums that accurately reflect both historical trends and forward-looking projections in the energy sector.
Unlike a PPA the policy enables the sale of fully merchant power, which is a natural hedge against supply chain inflation.
In the wake of the Russia-Ukraine war, energy price volatility has exposed the need to embed energy security and price stability into national energy policy considerations and investment decision-making.