Managing Risk and Making Money in Renewable and Battery Storage: Innovations in Structuring and Finance

Competitive power markets offer a unique opportunity to utilize storage as a physical hedge to serve financial firm obligations of a power hedge. On both a stand-alone basis or in conjunction with renewable generation, storage secures the equivalent of a contracted revenue stream using over-the-counter hedges. This session will address key financing criteria such as operating margins and risk of renewable plus storage projects hedged with market forward contracts and compares the outcome relative to a long-term power purchase agreement. The session will examine innovative financial structures including: revenue puts, optimal hedge ratio, reduction in risk, and the added premium of firm financial and physical delivery commitments of renewables plus storage.