Allianz Risk Transfer and partners have developed a risk management instrument to hedge wind volume risks at Capital Power’s 178MW Bloom wind farm in Kansas.
Allianz worked with Nephila Capital, REsurety and Altenex on a 10-year proxy revenue swap for the wind farm, which is to be constructed near Dodge City.
The agreement aims to secure long-term predictable revenues and mitigate power generation volume uncertainty related to wind resources.
Allianz said the deal swaps the floating revenues of a wind farm – those driven by the hourly wind resource and power prices – for a fixed annual payment.
Allianz Risk Transfer managing director Karsten Berlage said: “Recent advances in data availability for the US wind market as well as in risk assessment and modeling allowed this unprecedented scope of risk transfer within a single product, which is available for up to 10 years.
“In contrast to more short-term and price-focused hedging approaches, for the first time price and wind volume risks of a wind farm have been managed at the tenor needed to support a project’s capital structure and balance sheet.”
Image: the Bloom wind farm will feature Vestas turbines (Vestas)
Allianz swaps blooms in Kansas
Partners develop risk management tool for Capital Power's178MW project
By EBS