Industry Analysis
Published
•  Published
June 26, 2023

RenewaFi market participants are finding deals - even in this difficult environment

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.