20 Year Hedges Between Energy Users and Renewable Power Developers

We specialize in negotiating long term financial hedge agreements between energy users and developers. These are win-win financial hedge agreements between users and renewable developers.

• Renewable developers get an assured stream of income at a fair price that supports low-cost, long-term financing.
• Energy users get long-term price stability at a fair price that avoids the risk and escalating costs of fossil fuel based energy.
• The Contract for Differences (CFD) is a financial contract that is not subject to utility regulation. Users can choose to remain as default or standard offer customers with their local utility. The hedge acts to control long-term costs.

Under a CFD, developers and users agree on a strike price and how that may change over time. If the market price for the power generated by the renewable facility exceeds the strike price, the generator pays the user. If the market price received by the generator is below the strike price, the user pays the generator.

Since it is a financial contract, the renewable generation facility and the user do not have to be in the same geographical region. We carefully analyze the different markets to avoid basis risk. As long as the markets move in the same manner, for example, in response to changes in the price of natural gas, both the generator and the user are protected by the hedge.

The CFD allows energy users and renewable energy developers to avoid risk, control costs, and build a renewable resource energy future.

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