The Custom PPA Calculator allows to obtain site & technology - specific PPA prices. In contrast to Pexaquote benchmark prices which match the specification of an average asset, the LBP tool uses advanced meteorological analytics to calibrate PPA models to production and cannibalization as relevant to a user-defined project. In certain locations and for certain technologies, Custom PPA pricing supports the addition of a battery energy storage system (BESS) for co-location support.
Specification of Asset Details
The asset detail menu of the Custom PPA Calculator allows for defining siting and technology of a project. After choosing a price zone for the asset (in most cases, countries have a single price zone, Italy and some Nordic countries break down into several price zones), the project site can either be defined by entering latitude and longitude into the fields on the left-hand side of the screen or by navigating to the site on the map. For wind assets (technology types onshore and offshore), a turbine can be selected by first selecting a manufacturer and then choosing from a set of turbine models. When selecting “Solar” as technology, the inclination of panels (“slope”) and their orientation (“facing,” 180=south-facing) must be defined. Assets can be non-tracking (fixed panels), single-axis or dual-axis tracking. Clicking “Next” brings up the contract specification menu.
If your combination of market and technology supports co-location, you will be asked if you want to include a battery in the PPA calculation, and can specify details of the battery in the next step.
Specification of PPA Contract
After specifying site and technology of the asset (and optionally storage), the contract menu allows to specify the contract that should be priced. Contracts can be of as-produced (PAP) type, or monthly baseload contracts (BL M). After defining the first and last month of the delivery period, users can proceed to the volume specification menu by clicking “Next.”
Specifying Production Volumes
After retrieving hourly production reanalysis data for the last 5 years (this step typically takes ca 30sec), the screen shows monthly production volumes as applicable to the selected site.
We use location-specific volume data from ConWX for these volumes. These volumes will differ from the market-average data from ENTSO-E we use in standard PPA Prices.
Where users wish to override the retrieved values, alternative assumptions can be entered into the fields containing monthly values. Should the user wish to revert to the initially proposed specification, “use calculated volumes” restores these values. Amending any previous selections is possible by using the “Previous” button to navigate to the contract or asset specification screens. If all selections are as intended, “Analyse” launches the price calculation.
Result Section
The result section summarizes all user-defined input parameters as well as the calculation results (validity date, PPA Price and Market Price of Risk).
Market Price of Risk Breakdown Chart
Liquidity Cost - expected cost of entering and closing the deals at the market, implied from observed bid-ask spreads at the given market and PPA duration.
Price Risk - is attributable directly to the uncertainty of future baseload prices. It is determined as risk adjustment for a PPA contract if volume and cannibalisation risks were (hypothetically) absent. It is down to: 1) the volatility of baseload prices and 2) the correlation between stack-and- roll hedges and the prices on the far end of the price forward curve.
Volume Risk - is attributable to the uncertainty of the asset production realisation. It is defined as a risk adjustment to the PPA price if price and capture risks were (hypothetically) absent.
Capture Risk - is attributable directly to the uncertainty of capture factor realisations. It is defined as a risk adjustment to the PPA price if price and volume risks were (hypothetically) absent.
Diversification - is a correction term which accounts for the fact that the above mentioned individual risk components are not perfectly additive, i.e., the individual gains and losses attributable to price/volume/capture risk do not fluctuate in a perfectly correlated way.
Calculation Methodology
The Custom PPA Calculator builds on Pexapark’s proven PPA models, applying two site-specific calibrations:
Capture factor spread: Based on the asset’s site and technology, its price capture factor will be slightly better or worse than that of the average wind/PV asset in the market. By comparing the site-specific price capture to the average level of price capture in the market, a capture factor spread is determined, which is applied to the benchmark model
Site specific production seasonality: Production seasonality at a specific site will differ from the country average. The exact seasonal shape is derived from reanalysis data and used for PPA price calculation
The Custom PPA Calculator applies these site-specific parameters to the existing range of PPA models, thus adjusting them to match the properties of the user-defined project. Site specific parameters are determined from 5yrs of hourly production reanalysis data. For solar assets, Meteoblue data is used, whereas wind asset calibration relies on Conwx’s portfolio analyzer service.