Announcing LevelTen Energy’s Risk & Value 2.0, the Industry’s Most Advanced Suite of Analytics for Power Purchase Agreements
March 23, 2020 · By Andrew Bishop
LevelTen runs 15 million simulations daily to enable corporations to instantly compare the expected performance of nearly every PPA available, accelerating the PPA selection and approval process
The launch of the LevelTen Marketplace in 2018 reinvented renewable procurement, enabling the world’s leading corporations to instantly see, for the first time, all the power purchase agreement (PPA) options from nearly every developer in the market and—with help of our advanced analytics and expert advisors—choose the one that best meets their needs. Today we are taking this ground-breaking solution a huge step further with the launch of LevelTen’s Risk & Value 2.0, a dramatically expanded suite of advanced analytics within the LevelTen Marketplace. With this release, it’s even easier for procurement managers to confidently choose the best PPA for their organization, and successfully win internal stakeholder approval.
The update includes three new sections on wind and solar projects in the Marketplace:
- Overview: Instantly see the projected settlement value of the selected PPA, the projected number of RECs per year, and the estimated metric tons of emissions that will be avoided annually.
- Value: Easily compare the projected outcomes of all PPAs offered in the selected market to find one with the most overall value and least risk. View the projected net cashflow by year, and see how it changes based on which forward curve is used in the analysis.
- Risk: View the best, worst, and most-likely scenarios when it comes to how a PPA will perform in terms of net present value and yearly cashflow for any specific year or over the life of the contract.
A unique new feature of the release is LevelTen’s proprietary risk model, which calculates the best, worst and most-likely outcomes of the PPA. This requires data—massive amounts of data—to do properly. To provide this unprecedented level of automated analysis, LevelTen runs 20,000 independent Monte Carlo simulation trials on more than 750 PPA offers every day – that’s 15 million unique simulated results daily. In total, the LevelTen Marketplace processes over 1 billion data points daily to analyze the risk and value of nearly every wind and solar PPA available.
There are many factors that affect the value of a PPA, including future energy prices, the number of other renewable energy projects expected to produce energy at the same time (and in the same market) as the PPA project, weather predictions and more. Calculating the expected outcome of a PPA requires fresh input from project developers, access to forward energy price curves and other datasets, and a team of data scientists to sort through it all.
With this data on hand, LevelTen’s customers can clearly understand the expected outcome and downside risk of any PPA in the market, and they can compare one PPA to all others, which is key to selecting a PPA and getting it approved internally. As more companies enter the market, this speed is critical to signing the highest value PPAs before they’re taken by someone else. And by accelerating the selection and approval process, corporations can reach their renewable energy and emissions targets faster.
“With the launch of the LevelTen’s Risk & Value 2.0, our clients can find a PPA that meets their needs and level of risk tolerance within minutes, and with a much higher degree of certainty, because our analysis is based on fresh data that only LevelTen can provide,” said Zach Starsia, Senior Origination Manager at LevelTen Energy. “Other PPA brokers and internal energy procurement teams only evaluate a handful of projects after a request for proposals is completed; LevelTen evaluates them all from the start, delivering unparalleled transparency into the market.”
Here are just some of the actions energy buyers can take on the new pages:
See the most likely NPV
View the best, worst and most-likely outcomes for each PPA. The most likely outcome is the mean value returned by LevelTen’s automated risk simulations and our best projection of what will happen.
Compare PPA offers within a market
Visually assess the risk-adjusted value of a PPA and compare it to other projects in the same market. See a project that looks more valuable? Immediately navigate to that project and begin exploring the associated PPA offers.
See probable cashflow in any year of the contract
See the projected settlement (the delta between the PPA price and the market price), so you know how much you should expect to pay (or receive) in any given year of the contract.
Identify the range of probable outcomes for a PPA
Track the probable performance of a PPA according to your risk preference. Have an optimistic view of electricity prices? Assess probable contract performance at a P75 level. Hold a more pessimistic view? Follow the P25 performance. Or stick with the P50: the most likely scenario. The full range of probable outcomes are available for consideration.
Get expert advice
LevelTen has a team of advisors who can help corporate energy managers define their risk preferences and sort through all the data to find a PPA aligned with their goals.
Want to learn more? Contact us to get a free consultation and access to the LevelTen Marketplace.