AleaGreen: Long‑term forecasting for PPA and renewable energy projects financing

AleaSoft Energy Forecasting, May 13, 2022. The limitation of gas prices in the Iberian electricity market is the most topical issue in the energy sector in Spain and the one that raised the most questions and debate in the analysis table of the last AleaSoft Energy Forecasting webinar. The webinar also included the presentation of AleaGreen, the division in charge of long‑term reports, highlighting the importance and need to have 30‑year hourly price forecasting for PPA and portfolio valuation.

On Thursday, May 12, the 22nd edition of the monthly webinars organised at AleaSoft Energy Forecasting took place. On this occasion, the central theme was energy forecasting, its uses and the needs it covered. Experts of the energy sector participated in the analysis table after the Spanish version of the webinar, who have collaborated with AleaSoft Energy Forecasting throughout the company’s more than twenty years of history, and current issues of the energy sector in Spain were analysed in depth. The participants were Alberto Ceña Lázaro, CEO of BEPTE, S.L., Antonio Canoyra Trabado, associate professor at the Department of Electric Power at the Comillas Pontifical University (ICAI), and Francisco Del Río, energy management expert, accompanied by Antonio Delgado Rigal, CEO of AleaSoft and Oriol Saltó i Bauzà, Associate Partner at AleaGreen. Interested people can request the recording of the webinar.

Among the most recurring topics at the analysis table due to questions from the audience, was the limitation of gas prices in the Iberian electricity market, which was not yet approved on Thursday, and its possible consequences. Consequences that go beyond reducing the market price, since it was anticipated that exports and the electricity generation with gas would increase, and there were many doubts about the final repercussion of this limitation on prices for final consumers.

The experts also expressed concern about the message and feeling of legal insecurity that is being sent to investors and that can stop the signing of new PPA, planned investments and worsen the renewable energy projects financing conditions. In short, we will have to see how it will affect the energy transition towards a 100% renewable economy.

Evolution of energy markets in Europe

In the webinar it was analysed, as usual, the behaviour of the energy markets in Europe in recent weeks. In this aspect, it was highlighted how Brent oil and TTF gas prices are in a relatively stable situation but within a very volatile and highly unstable context. Brent oil prices were oscillating in the $100‑$110 per barrel range for several weeks, while TTF gas prices are showing a slight downward trend.

For their part, CO2 emission rights prices seem to show signs that their historical upward trend may have been resumed after several weeks with very stable prices around €80 per ton.

AleaSoft - Brent oil TTF gas pricesSource: Prepared by AleaSoft Energy Forecasting using data from EIA and EEX.

Presentation of AleaGreen

The webinar also involved the formal presentation of AleaGreen, the new division of the Alea group specialised in long‑term forecasting. Antonio Delgado Rigal highlighted the 30‑year hourly price forecasts that are offered in its long‑term reports and that are necessary for estimating the captured prices of each renewable energy project and that both financial entities that provide the financing for the project and auditing companies that carry out audits and due diligences value very positively.

The need for hourly price forecasts for projects of hybrid plants with batteries and energy storage systems for optimising the sale of energy in the wholesale and adjustment markets was also highlighted.

AleaSoft - Long Term price forecastingSource: AleaGreen.

AleaSoft Energy Forecasting’s analysis on the prospects for energy markets in Europe and the renewable energy projects financing

The next edition of the AleaSoft Energy Forecasting’s monthly webinars will be held on June 9 and it will have speakers from Engie as guests. This will be the fifth time that Engie has participated in the AleaSoft Energy Forecasting’s webinars, and has always provided a very clear and interesting first‑hand view of the state of PPA and the renewable energy projects financing. The current regulatory issues of the Spanish electricity sector and the prospects for the energy markets in Europe for the second half of the year will also be analysed.

Source: AleaSoft Energy Forecasting.

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