AFRY and software and advisory company Pexapark have developed the ‘Daily Valuation Curve’, providing renewables investors, developers and portfolio owners with a consistent valuation framework for renewable energy investments.
The new offering, combining Pexapark’s short-term renewable energy Power Purchase Agreement (PPA) valuations and AFRY Management Consulting’s fundamental price curves, is designed to give renewable energy investors and their lenders a consistent valuation across all investment tenors.
Overseen by an expert committee of the two organisations, this standardised ‘blended’ product capitalises on the strengths of both trusted methodologies. It provides a much-needed, consistent valuation framework, providing greater certainty to renewable energy investors navigating market volatility and driving forward the energy transition, said the companies.
Early findings from a market survey polling over 1,255 energy market participants reveal that future prices within the liquid time horizon and fundamental price curves, combined with independent market reports, represent the top three sources of data currently used by renewables investors.
Furthermore, both future prices and fundamental price curves are expected to top the list of new data services procured by renewables investors in 2023 – followed by generation forecasts, real-time data from exchanges and power networks, as well as independent market reports.
“PPA markets have evolved dramatically over the last year. Faced with market volatility and regulatory change, renewables stakeholders are rapidly arming themselves with data, tools and systems they need to evaluate risks, close PPAs, and make confident investment and portfolio management choices.” said Luca Pedretti, COO & Co-Founder of Pexapark.
“These recent survey findings highlight the importance to investors of combining short-term future prices accounting for current market volatility, with long-term fundamental price curves that track changes in technologies and commodities,” added Dr. Jan Wierzba, Senior Principal, AFRY Management Consulting. “But these two pieces of price information are a bit like water and oil – they do not easily mix. This is where the unique ‘blending’ methodology developed for the Daily Valuation Curve will bring great benefits for new and existing assets alike.
“Innovative products such as the Daily Valuation Curve, we believe, will become a standard data set required for investment decisions that drive forward the energy transition.”
The Daily Valuation Curve will be available through the AFRY Analytics platform and through Pexapark’s Price Reference Platform, PexaQuote.