Home Markets Electricity derivatives will offer power offtake certainty for renewable investors – pv...

Electricity derivatives will offer power offtake certainty for renewable investors – pv magazine India

5

An Institute for Energy Economics and Financial Analysis (IEEFA) report says the sale of power in the futures market will benefit renewable energy developers and distribution companies alike.

The introduction of derivatives to India’s short-term power market will make it easier for renewable project developers to enter into offtake arrangements with the state-owned distribution companies (discoms), according to a new briefing note from the Institute for Energy Economics and Financial Analysis (IEEFA).

“The launch of new financial instruments will enable developers to hedge their offtaker risk without requiring the signing of long-term contracts with discoms for the financial closure of projects,” said author Vibhuti Garg, Energy Economist, Lead India at IEEFA.

Long-term (usually 25-year) power purchase agreements (PPAs) between power producers and discoms comprise 88% of electricity transactions in India. PPAs provide…

Click here for full article…www.pv-magazine-india.com