Assess your risk positions and adjust your hedges accordingly
Renewable power is the future! Do you operate solar or wind generation and need to manage the price risks? Or do you wish to invest in an on-shore or off-shore wind farm? Are you operating a battery storage or pumped hydro facility? Or are you a large energy end user with various options for sourcing green energy? KYOS helps you with setting a price for your resources, guide you with investing and contracting (PPA) decisions, and offers you the tools to manage the price risks of any type of portfolio with renewable generation and energy storage.
(Renewable) PPA Valuation
To begin with, Power Purchase Agreements, or PPAs often include complex pricing structures. For example, PPA’s typically consist of price floors, risk sharing elements and specific reconciliation mechanisms. In order to value your assets, you need a system that is able to capture all this.
A fundamental power market model to create long-term electricity price forward curves, important given the long duration of many PPAs.
Software modules to simulate price and volume risks. These are necessary if you wish to assess the future earnings and hedging strategies.
Furthermore, capture rate is an important parameter for PPA valuations. Our system can calculate this using historical data or using long-term fundamental price forward curves. Alternatively, the user can define its own capture rate.
A flexible tool for accurate PPA valuations. Breakdown the value in different components. Possibility to define own pricing structures.
The option to evaluate and monitor the risk of one or more PPAs or as part of a larger portfolio, with or without hedging strategies.
KYOS offers support to value renewable Power Purchase Agreements (PPA). We accompany you through the entire PPA life cycle, with pricing, risk analytics and dispute resolution. We help you in getting the best deal for your PPA!
Use the KYOS PPA module in the following cases:
KYOS performs the main valuation of the PPA for either buyer or seller. In addition, we can also provide advice in structuring the PPA to make sure it is aligned with your company’s risk profile. This can be a one-off valuation request or under a framework agreement.
Another reason to use the KYOS valuations is when you wish to benchmark your own, internal, valuations.
Moreover, we are impartial. KYOS performs independent valuation of existing PPAs. Many PPAs have been concluded some years ago, and might include ambiguities which could lead to disputes between contract parties. We provide reliable support to settle such disputes in a fair way.
Data Services for renewable power assets
Generally speaking, market prices are at the basis of almost any function within energy and commodity management. The KYOS Platform offers various price simulations and packages. Of course we have made sure our price simulations can easily interface with data providers, storing all the data in a central price database. Furthermore, there is a range of standard functions for analyzing the data visually, and to export prices to Excel. The Platform also contains functions to analyze price spreads and calculate volatilities and correlations.
All data services can be delivered for one or more power markets in Europe, Turkey, and Japan. We have four options available:
Service A, daily: Forward, futures and spot power market prices of relevant markets
Service B, daily: Market-based hourly price forward curves up to end of 2023
Service C: monthly, long-term fundamental hourly price forward curves for 2023 – 2035
Service D, monthly: PPA valuation and risk metrics of a specific renewable asset
The KYOS PPA software module has a market price and forward curve database and uses an advanced Monte Carlo simulation engine – perfect to value all PPA characteristics. Add various reporting and risk management tools.
# 1 Provider of analytical solutions for valuing renewable assets
Software modules for renewable power assets and PPA’s
Basically, the KYOS renewable risk management system provides a complete picture of the electricity portfolio with renewable energy PPAs and related hedges. As an illustration, reporting includes volumetric position, mark-to-market value, value-at-risk and earnings-at-risk. All modules are part of the KYOS Analytical Platform, a cloud-based software platform.
KYOS puts a lot of effort to find the right balance between offering a robust deal capture system and a fully flexible spreadsheet solution. We include standard PPA pricing mechanisms for certain countries and technologies. Additionally we offer you the unique feature to add your own pricing structures to the system. For this purpose, we offer an easy-to-use Python programming interface.
The KYOS renewable risk management system allows the user to analyze the effect of applying different hedging strategies to lock-in value of your renewable project. Strategies range from basic static hedges to advanced stack and roll strategies. If your project is in a market with limited liquidity, our system will show you the effectiveness of proxy hedging the exposure in other markets, even using different commodities than electricity.
We have various options available in our KyPPA renewable power model:
Module A: Price data services
Forward, futures and spot prices at your fingertips, with our price data management system.
Automate price data imports. Of course, built-in interfaces to most popular European exchanges are standard.
Along with price data, you will have access to analysis tools, spread calculator, etc.
Module B: Price data plus market price forward curve builder
Includes forward curve builder KyCurve, to generate your own market-based hourly forward price curves.
Create accurate arbitrage-free hourly forward price curves. In addition, workflow can be fully automated. For example price data import, curve creation and export for use in external systems.
Module C: Price data plus fundamental power curve builder
Contains fundamental power market model KyPF, including quarterly updated power plant datasets.
This allows you for instance to run your own merit order analysis, forecast power prices and perform what-if scenario analysis.
It also provides forecast capture rates of individual renewable generation assets and technologies
Module D: all above plus Monte Carlo simulations for single project
Complete PPA valuation and risk software – Monte Carlo.
Define your own PPA parameters, run our capture rate calculator and obtain a forecast of the future PPA cash-flows.
Generate Monte Carlo scenarios of future power prices and renewable generation volumes.
To begin with, you define future expected capture rates, then the model ensures the volume and price scenarios are in line with those rates, incorporating the cannibalization effect.
Compare the cash-flows of the PPA with sourcing power directly from the market to assess profits or losses. Also assess different dynamic hedging strategies, such as stack-and-roll and proxy hedging.
Break down of results helps to understand value drivers and risks, such as capture rate, market price, generation volume and balancing costs.
Module E: all above plus Monte Carlo simulations for portfolio
Full portfolio and risk management system for all your power trades and PPA contracts.
Our most comprehensive module – in short, KYOS offers a uniquely complete and proven system to manage your portfolio.
Whether you have just futures and forwards, or also complex PPA structures with price indexation, market-price clicks, caps and floors: the KYOS system manages your positions.
Also assess the effect of different dynamic hedging strategies, such as stack-and-roll and proxy hedging
Example of Stack and Roll strategy
For more information or a free demonstration of our KyPPA renewable power model, please do not hesitate to contact us: email@example.com.
Sources of renewable power or green energy are the future. KYOS helps you with valuing your solar, wind, battery or pumped-hydro energy assets, as well as your (renewable) power purchase agreements (PPAs).
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