Renewable Energy Indices

Designed for risk transfer

Wind Power Production Indices

The transition of the global energy markets towards renewable energy has created a new set of risk management challenges. In the past, markets focused on the price of crude oil or the availability of coal; now markets are concerned with cloudy days and calm conditions. Speedwell has developed a range of renewable energy indices that are designed for parametric risk transfer (financial contracts where payout is based upon the level of an objective index). These indices are available for solar and wind renewables and cover national (grid level) power production. We can also produce these on request for specific portfolios of renewable assets.

These indices represent theoretical wind power production across a region based upon the installed capacity on a given date. We calculate MWh production using gridded wind observations as an input to our model.

Speedwell's renewable energy indices are used by market participants in different capacities. Non-renewable generators have used these indices to protect themselves against more energy than normal being delivered to the grid. Renewable energy producers seek structures that hedge against too little wind or not enough solar radiation. Other participants have used these indices to better manage day-ahead prices.

 

 

Solar Power Production Indices

The transition of the global energy markets towards renewable energy has created a new set of risk management challenges. In the past, markets focused on the price of crude oil or the availability of coal; now markets are concerned with cloudy days and calm conditions. Speedwell has developed a range of renewable energy indices that are designed for parametric risk transfer (financial contracts where payout is based upon the level of an objective index). These indices are available for solar and wind renewables and cover national (grid level) power production. We can also produce these on request for specific portfolios of renewable assets.

These indices represent theoretical solar power production across a region based upon the installed capacity on a given date. We calculate MWh production using gridded wind observations as an input to our model.

Speedwell's renewable energy indices are used by market participants in different capacities. Non-renewable generators have used these indices to protect themselves against more energy than normal being delivered to the grid. Renewable energy producers seek structures that hedge against too little wind or not enough solar radiation. Other participants have used these indices to better manage day-ahead prices.

 

Hydropower Indices

Speedwell hydropower indices have been specifically designed for managing hydropower production risk. These indices are available for geographical regions, portfolios, and individual hydro assets. Such indices can be used by the producer for risk transfer purposes.

Each index relates to the amount of precipitation falling over a given catchment or region. The technology deployed depends upon the intended use of the index and the availability of data.

Gridded Data - Using spatial analysis (geoprocessing) catchments are defined for each hydropower asset. These catchment polygons are then used to extract grid points falling within the region. Total precipitation is calculated for each catchment (sum of the grid points), catchments are then weighted based upon their installed hydropower capacity.

Surface Observations - Using our extensive catalogue of high quality surface observations (observed at weather stations) we select the best weather stations to represent a catchment. Data points are weighted based upon the size of the relevant asset or importance of the region.

Each index has a long history for pricing and structuring as well as reliable and transparent updates for transaction settlement.