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.
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.