PPA valuation is not easy. There is a wide variety of risks in renewable power purchase agreements, such as volume risk, price risk, profile risk and imbalance risk. The KYOS PPA model considers all these factors to come up with a fair market value. It includes all price and volume risks for a one-off valuation or for continuously managing the contracts in your portfolio. We help you in getting the best deal for your PPA!
PPAs often include complex pricing mechanisms, typically with price floors, risk sharing elements and specific reconciliation mechanisms. KYOS has a lot of expertise to value PPAs.
Our PPA model includes a fundamental power market model to create long-term electricity price forward curves, important given the long duration of many PPAs. In addition, we have software modules to simulate price and volume risks. These are necessary if you wish to assess the future earnings and hedging strategies.
Capture rate is another important parameter for PPA valuations. Our system can therefore calculate this using historical data or using long-term fundamental price forward curves. Alternatively, the user can define its own capture rate.
Valuation support can be used for different cases. Some examples of the services we offer:
KYOS provides PPA consulting for example to:
With a rising number of PPAs, the management of renewable power positions is of growing importance for many energy companies. Due to the often complex and non-standard nature of PPAs, it is typically difficult to capture the contracts in existing trade and risk management (ETRM) systems. Managing the PPAs in custom made, often spreadsheet based, solutions is therefore common. However, there are a lot of advantages to switch capture of PPAs in ETRM systems. For instance: auditability, consistency of pricing methods, less time spent on maintaining many different spreadsheets and better control on user access. And KYOS has the right answer for you.
KYOS offers a flexible web-based software package to effectively capture and risk manage PPAs. This package is part of the KYOS Analytical Platform, a user-friendly and intuitive system for energy market players.
KYOS is the # 1 Provider of analytical solutions for valuing renewable assets
The KYOS PPA software model has a market price and forward curve database and uses an advanced Monte Carlo simulation engine – perfect to value all PPA characteristics. Add various risk management tools, including earnings-at-risk.
In short, the PPA risk management system provides a complete picture of the electricity portfolio with renewable energy PPAs and related hedges. Reporting includes volumetric position, mark-to-market value, value-at-risk and earnings-at-risk. Assess the effect of different dynamic hedging strategies, such as stack-and-roll and proxy hedging
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