A Leading Renewable Energy Financing Bank Gains Important Insights on U.S.- based Opportunities

Power markets are dynamic, and the acceleration of the energy transition adds significant variability and uncertainty. Energy investors need unique and advanced forecasting capabilities to mitigate the risk of power price fluctuations in their power plant valuations.

About

This leading bank in renewable energy financing set a goal to grow its footprint in the U.S. market to capitalize on opportunities to fund the growing number of initiatives to develop and deliver clean, reliable, and affordable energy. The firm planned to make substantial investments and hire new employees to execute this growth strategy.

Challenge

U.S. short- and long-term power demand forecasting is becoming increasingly challenging as the power generation fuel mix shifts more toward weather-dependent renewables and energy storage resources. Additionally, extreme weather has become more common, causing power grid operators to adopt new load forecasting approaches.

Members of the strategic planning team at this bank did not have an adequate forecasting solution to assess U.S. energy operations during this challenging time. This left them unable to forecast energy prices, power curves, and future cashflows when assessing risk.

Solution

S&P Global identified two solutions that could help: Power Evaluator and the Power Forecasting Tool.

Power Evaluator is a cutting-edge valuation suite on S&P Capital IQ Pro, a robust desktop platform, which integrates best-in-class asset-level data, 40,000+ machine-learning-powered nodal forecasts and physical risk metrics to deliver reliable, fast power valuations. Built with multiple power forecasting scenarios and adjustable financial assumptions, this completely customizable valuation suite unlocks the true value of power plant investments from start to finish, enabling users to:

• Screen for power projects, portfolios, and companies.
• Build and analyze potential new power plants and portfolios.
• Simulate a project or portfolio sale.
• Track portfolio progress to net-zero goals.

The Power Forecasting Tool provides comprehensive forward curves projecting power, natural gas, and coal price forecasts, and supporting supply/demand data, drilled down to hourly, daily, monthly, and annual prices. This enables users to better understand key market changes and inform their decisions on potential revenue opportunities.

Outcome

Power Evaluator and Power Forecasting provided members of the strategic planning team with 50 zonal curves, 40K nodal curves and forward-looking cashflow metrics. They can now:

• Access a detailed overview of market conditions and identify new project opportunities.
• Understand the value of an asset over its lifecycle.
• Ensure commercial viability of potential projects to mitigate investment risk.