Post: Routes to market for green power in a post-subsidy renewables market

Routes to market for green power in a post-subsidy renewables market

The renewable energy sector has created the conditions to enable deployment at a scale and pace few thought possible. Costs are falling rapidly, enabling these new sources of energy to compete directly with conventional sources. But with this success come new challenges.

The mainstreaming and maturing of renewable technologies has prompted governments around the world to review publicly funded support schemes introduced to stimulate the market. In addition, there are a number of projects whose government-backed funding is or shortly will tail off. This low- or no-subsidy world requires developers to find alternative sources of revenue to anchor the low-cost, long-term financing needed for projects to be economically viable.

As a result, developers, are looking to other routes to market for their green power. Many are looking to the growing number of corporations that are seeking to access green power through power purchase agreements (either traditional PPAs with a utility or CPPAs with a corporate buyer) to provide that alternative revenue certainty. Traditional fixed-price contracts with utility suppliers are often the easiest, but they often lead to discounted revenues that fail to reflect real-time market dynamics. Equally finding the right corporate off-taker for a project can be a significant challenge.

GridBeyond’s Head of Origination Neil Garland said: “Our AI-powered platform is able to run complex market simulations, producing long-term capture prices for specific generation technologies. We then work to partner our generators with a credit-worthy counter-party who are looking to invest in renewable power, either with one of the existing corporates we work with by finding a suitable off-taker out in the market. With various reporting and risk management tools, the platform also contains functions to analyse price spreads and calculate volatilities and correlations.

“But further to this GridBeyond is able to aggregate volumes – pooling smaller companies together to buy energy from a larger project – not only does this give corporates access to a broader set of projects, but it also provides projects with the ability to match their production volumes with an appropriate group of customers.” 

Admittedly, PPAs are not the only avenue for generators and revenue can also be earned (either in part or entirely) from merchant trading. Access to intraday and day-ahead energy markets allows you to bid competitively, ensuring your output is sold at market rates. A growing number of projects have been financed on an almost-merchant basis, while some existing projects that have come to the end of their guaranteed tariff period are being refinanced on that basis.

Garland said: “Once the subsidies are gone, the value of AI integration in renewable energy asset management can be fully seen. Not only can AI improve the reliability of renewable energy streams, it can also create smart systems that produce quantifiable and qualifiable results to secure investment. Data is reliable; government subsidies aren’t. The actionable and clear takeaways that AI provides on asset performance is how investors can mitigate their risk.

“By leveraging advanced forecasting tools, predictive analytics, and flexible control systems, GridBeyond supports renewables operators to minimise waste and seize opportunities for premium returns. GridBeyond’s platform provides access to energy exchanges and flexible trading strategies tailored to individual production profiles. With intelligent scheduling and centralised control, operators can benefit from dynamic price variations, capturing value that fixed-price arrangements cannot deliver.

GridBeyond’s solutions deliver:

• Higher revenue potential: by selling directly into the wholesale market, you can achieve prices that reflect true market demand, avoiding the discounts imposed by intermediaries
• Dynamic price optimisation: leverage our advanced trading platform to secure the best prices, adjusting offers based on real-time data
• Flexibility: retain control over your energy pricing strategy, tailoring it to market conditions and operational capabilities
• Risk management: use our sophisticated risk management solutions to hedge against price volatility, ensuring predictable income while capitalising on market highs

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