Allianz Risk Transfer (ART) and partners have developed a risk management solution for hedging wind volume risks for wind farms. ART has executed a 10-year Proxy Revenue Swap with Capital Power’s Bloom Wind Farm, to be constructed near Dodge City, Kansas. This new risk management tool for the wind power industry was created and commercialised through a partnership amongst ART, Nephila Capital Limited, REsurety and Altenex.
The 10-year agreement will secure long-term predictable revenues and mitigate power generation volume uncertainty related to wind resources for the 178MW Bloom Wind Farm. This structure swaps the floating revenues of a wind farm, those driven by the hourly wind resource and power prices, for a fixed annual payment. ART and Nephila leveraged their collective weather risk transfer expertise, risk capacity, underwriting sophistication and credit strength. REsurety has provided the specialised risk analyses relied upon for the structuring of the Proxy Revenue Swap and delivers ongoing services as the calculation agent for the transaction. Altenex supports the management of power price-linked risk as part of the Proxy Revenue Swap structure.
