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Could they buy/sell options/futures that mature over the next 20 years to get some certainty about it?
by daurnimator 8y ago
Could they buy/sell options/futures that mature over the next 20 years to get some certainty about it?
- ajcodez 8y agoIt sounds like they already did some kind of 20yr swap - 'a long-term power-purchase agreement had helped the wind farm “offer an attractive price” to consumers'
- dav43 8y agoYes, that is essentially what a PPA sets out. There are several structures that can be deployed, but fundamentally its fixing the future revenue streams of the asset. The buyer of the PPA wins, as they get a fixed cost. The seller wins, their revenues are fixed and known, and they can get more leverage from debt finance because of this - thus, they get a better return on their equity investment.