A consistent valuation framework for renewables investment

AFRY Management Consulting and Pexapark recently launched the Daily Valuation Curve to provide renewables investors, developers and project owners with a consistent valuation framework for renewable energy investments across all tenors, helping to navigate market volatility and drive forward the energy transition.

Solar Project Investment

AFRY is a leader in engineering, design and advisory services with experience in a wide range of global electricity markets, possing a deep insight into the merits of alternative electricity market designs. Pexapark is a software and advisory company specializing in renewable energy sales, power purchase agreements (PPAs) and renewables market risks management.

The Daily Valuation Curve is regarded as the market's first single go-to point for consistent valuations from years to decades and from pre-deal to post-deal. The product blends the trusted methodologies from both companies, gets standardized, and is overseen by an expert committee.

Findings from a market survey show that future prices and fundamental price curves are the two foremost new data services procured by renewables investors in 2023, indicating a booming demand for reliable pricing data services, especially by PPA markets. The Daily Valuation Curve is a much-needed and consistent valuation framework that provides greater certainty to renewable energy investors.

"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 and Co-Founder of Pexapark.

The recent survey reveals the importance of combining both short-term future prices and long-term fundamental price curves for a scientific investment decision. Dr. Jan Wierzba, Senior Principal of AFRY Management Consulting, described these two types of price information as "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," said Dr. Jan Wierzba.

The Daily Valuation Curve is available through the AFRY Analytics platform and through Pexapark's Price Reference Platform, PexaQuote. Click here to find out more information.

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