All of Pexapark’s PaP (pay-as-produced) prices take into account cannibalization. Cannibalization is the adverse impact of hourly price-volume correlations in delivery.
Where realized price cannibalization is straightforwardly calculated via the ratio of realized historical production prices and baseload prices, PaP prices need to account for future cannibalization. There are two ways Pexapark calibrates its cannibalization estimates:
where PPA price observations are available, all models are calibrated to cannibalization as implicit in market-observed prices
where no prices are observable, Pexapark uses a proprietary methodology based on historic capacity data and cannibalization to extrapolate cannibalization
In both cases, we transparently disclose our assumptions to you by showing not only our price forward curve but also the cannibalized price forward curve, the capture curve. This allows you to compare our assumptions to your own, or to use our assumptions to do your own calculations.