How Does Your Portfolio’s Mix of CfD, Merchant, and PPA Revenue Impact Your Risk-Return Profile?

Synopsis

• Evaluate optimal revenue stack combinations of CfD, merchant, and PPA exposure to maximize returns while maintaining bankability
• Implement geographical diversification strategies that effectively mitigate market-specific risks
• Apply quantitative methods to assess correlation risks across multiple assets within a portfolio
• Design portfolio-level hedging strategies that provide more efficient risk management than project-level approaches
• Develop robust stress-testing frameworks to evaluate portfolio resilience against various market disruption scenario
• Challenging the assumption of CfDs as iron-clad ‘safe’ revenue streams, considering UK bidding eligibility changes and historical retroactive reforms in markets like Spain