RenewaFi market participants are finding deals - even in this difficult environment
Head of Strategy & Marketing
In recent months, ERCOT market conditions have been less than ideal. On top of the supply chain issues that have beleaguered the industry for some time, the Texas Legislature considered measures that would have severely thwarted the continued penetration of renewables in ERCOT. While the worst of those proposals was averted, the threat alone made dealmaking in ERCOT more difficult.
In April, amid these difficult market dynamics, RenewaFi introduced its marketplace for wholesale renewable energy in ERCOT. While one might expect a tepid response given the market conditions, the opposite occurred. Over the past three months, about 150 originators and traders from nearly 50 companies joined.
These market participants posted nearly 300 bids and offers, representing over 8 GW of renewables. There are posts for deals as short as three years and as long as 15. The vast majority (about 90%) are for unit contingent deals, but a few (about 10%) are for fixed shape.
Below is the distribution of these bids and offers:
The lack of pricing consensus shown above reflects the uncertainty in the broader market. Despite this, though, RenewaFi market participants have “matched” (i.e., agreed to enter bilateral negotiations) four times since April (the yellow dots in the chart).
Even in this difficult environment with low liquidity, competitively priced bids and offers are resonating on RenewaFi - and leading to substantive negotiations.
Interested in joining the marketplace? We’d be delighted to set you up.
RenewaFi LLC (“RenewaFi”) offers a renewable energy marketplace. Users are cautioned that the RenewaFi marketplace is not a “swap execution facility” or registered as such with the Commodity Futures Trading Commission (CFTC). Unlike an exchange or a swap execution facility, the RenewaFi marketplace is not designed for RenewaFi market participants to place orders for standardized and tradable financially settled contracts, or to execute such contracts on the RenewaFi marketplace. The RenewaFi marketplace is a tool primarily used to help RenewaFi market participants source and interpret information. Further, users and other RenewaFi market participants will not be permitted to initiate auctions, nor should they submit proposals, to enter into a renewable energy transaction, unless the transaction is intended to be physically settled. Auctions for financially settled renewable energy transactions cannot and should not be conducted on the RenewaFi marketplace. Information provided on this website is not to be considered advice, and the use of this website does not establish a customer relationship with RenewaFi. Commodity trading can be complex and involves substantial risk of loss. The use of RenewaFi software or services does not guarantee performance. RenewaFi does not provide legal services or advice. Renewable energy participants should hire and retain professional legal counsel prior to using RenewaFi software and evaluating or executing any commodity transactions.