In June 2022, Resonance Asset Management used the Renewable Exchange platform to easily execute PPAs for 21 wind sites across two portfolio tenders.
Before discovering Renewable Exchange, Resonance used to run all their PPA management in-house. From getting the tender documentation out to various offtakers, through analysing results to reviewing the different contract terms for all the bids – it was a laborious and lengthy process with many challenges along the way.
The Renewable Exchange platform offered Resonance a simple and efficient PPA tendering system and the ability to reach all offtakers with just a few clicks. This was the perfect solution for Resonance.
“You set it all up on the platform with minimum input and once you’ve ran the tender, it’s really easy to see and compare the results,” comments Orlando Hilton, Investment Director at Resonance. “The breadth of off-takers covered also gives you confidence that you are not missing out on any potential buyers.”
Resonance first tendered a portfolio of sites through the Renewable Exchange platform in 2021, when power prices in the UK started to rise. They then continued to follow the developments in PPA prices closely and decided to tender again in June 2022; this time looking at PPAs for 21 wind sites under their management, split into 2 portfolio tenders.
The 2 tenders were launched and completed in June 2022. The first one included 7 sites with 5 different contract renewal dates.
The suite of tools available through the Renewable Exchange platform allowed for a simple and quick process of executing PPAs, even where the contract start dates differed for each site. All 7 PPAs were executed within minutes using the Lightning PPA – instantaneously locking in the prices online.
“Renewable Exchange provides us with an efficient and thorough way to tender multiple sites across various portfolios simultaneously. It also allows us to easily choose when to tender, which in increasingly volatile markets adds real value,” adds Hilton.
14 PPAs were tendered in the second portfolio. 6 different offtakers submitted bids for 2 contract periods – 1 and 2 years. In this portfolio, Resonance decided to contract with a single reliable offtaker and was able to close the tender and execute the new PPAs for 14 sites in just a few clicks.
A price increase of circa £100/MWh was achieved on each of the PPAs in the 2 tenders, resulting in a significant boost to the fund.
The spread of bids between the top and the bottom bidders on the 2 tenders was a staggering £40/MWh – making a substantial difference in the total revenue for the sites across a year’s generation! Surprisingly, the two top bidders on the second tender didn’t provide prices on the previous one. This example reiterates the importance of always going out to the whole of the market, as offtakers’ positions can change even within days.
Resonance Asset Management is an asset management firm focusing on real asset investments with attractive risk/return characteristics. In the renewable energy space, Resonance manages funds consisting of small and medium-sized wind farms across England, Scotland and Wales.
Download the Resonance Asset Management case study in pdf format.
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