Low Carbon, a leading renewable energy developer, has recently signed an agreement with Pexapark, a Swiss-based renewable energy risk management firm. This agreement will enable Low Carbon to expand its business and pursue growth opportunities beyond subsidies with low carbon initiatives.
The renewable energy sector has been heavily reliant on government subsidies to support the development of new projects. However, as these subsidies are gradually phased out, renewable energy developers are looking for new ways to finance their projects and ensure their long-term viability.
This is where Pexapark comes in. The company provides risk management solutions for renewable energy projects, helping developers to manage their exposure to market risks such as electricity price fluctuations and weather-related risks. By partnering with Pexapark, Low Carbon will be able to access a range of risk management tools and services that will enable it to pursue growth opportunities beyond subsidies.
One of the key benefits of this partnership is that it will enable Low Carbon to enter into power purchase agreements (PPAs) with corporate buyers. PPAs are long-term contracts between renewable energy developers and corporate buyers, under which the buyer agrees to purchase a certain amount of renewable energy from the developer at a fixed price over a specified period of time. This provides a stable source of revenue for the developer, enabling them to finance new projects and expand their business.
By partnering with Pexapark, Low Carbon will be able to offer corporate buyers a range of risk management solutions that will help them to manage their exposure to market risks associated with PPAs. This will make Low Carbon a more attractive partner for corporate buyers, enabling it to secure more PPAs and expand its business.
Another benefit of this partnership is that it will enable Low Carbon to access new sources of financing. Pexapark has developed a range of innovative financing solutions for renewable energy projects, including revenue put options and weather derivatives. These solutions enable developers to hedge against market risks and secure financing for their projects, even in the absence of government subsidies.
Overall, the partnership between Low Carbon and Pexapark represents an exciting development for the renewable energy sector. By enabling developers to pursue growth opportunities beyond subsidies, it will help to ensure the long-term viability of the sector and accelerate the transition to a low-carbon economy.
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