Note: This client has asked to remain anonymous.

A renewables developer evaluating a power purchase agreement (PPA) for a 150 MW wind project needed to understand the basis risk over the long term. To assess the basis risk, they looked at historical price data on a nearby node. Historically, this evaluation had been sufficient to proceed with the contract without any further protections.

However, leveraging Orennia’s power price forecasts at the nodal level, the developer was able to see that 600 MW of new solar projects were planned nearby, dramatically impacting the basis risk for their project.

In response to this intel, the developer was able to negotiate protections in the contract to better manage the basis risk. The additional protections allowed them to manage extreme basis events, saving an estimated $17 million over the next seven years.