Endurance Global Weather, a subsidiary of Bermuda-based Endurance Specialty, has completed an innovative, multi-year wind hedging transaction that protects Meridian Energy Australia, an Australian electricity supplier, against fluctuations in its earnings due to the weather.
Endurance Global Weather’s WindLock product provides financial risk protection for companies seeking to manage the wind variability of operating assets as well as assets in development.
The transaction will provide Meridian financial protection against the risk of low annual earnings from price and volume variability at Meridian’s Mt Millar wind farm in South Australia.
Vaisala, a global weather measurement and renewable energy consulting firm, will report and quality-control the wind data used for settlement of the WindLock transaction.
“This transaction is noteworthy given the site-specific settlement data provided by Vaisala and the relatively long contract duration,” said Martin Malinow, president, Endurance Global Weather.
“Endurance Global Weather has a successful track record of pioneering tailored solutions for its global client base and was delighted to work with Meridian to execute this WindLock transaction.
“We know from working with our wind clients that effective risk management can facilitate project finance by securing advantageous terms for debt and equity while potentially allowing developers to allocate their equity across a greater diversity of projects. There is also a benefit to the counterparties to power purchase agreements in passing the financial risk of volumetric uncertainty to weather-diverse third parties like Endurance Global Weather.”
James Waldren, general manager, energy trading, Meridian Energy Australia, added: “As a merchant renewable energy company, we see this transaction as an innovative way of complementing our existing portfolio of risk management solutions to provide greater earnings certainty for Meridian.”
Endurance Global Weather, Endurance Specialty, Meridian Energy Australia, Vaisala, James Waldren, Bermuda, Asia-Pacific