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Members' interviews

Interview with Luca Pedretti, COO and Co-founder of Pexapark

Ditlev Engel, CEO of DNV GL – Energy

Can you tell our readers a little about Pexapark?

Pexapark was founded in 2017 as a solution to the market transformation we are currently seeing in renewable energy. The management of renewable energy revenues has become more volatile, technical and dynamic as the industry has transitioned from a heavily subsidised system (FITs) to an increasingly open market,. With investors struggling to oversee their assets in an effective manner, we decided to address this problem by building a "Bloomberg for Renewables". An all-in-one solution that helps investors monitor, manage and optimise their power sales, revenues and risks.

Within our first year, we advised on over 2.2 GW in Power Purchase Agreement (PPA) transactions across Europe and have worked with a wide range of institutional customers, including E.On, Encavis and one of the world’s top investment banks.

PPAs are big news these days, and Pexapark has positioned itself as an authority in PPA advice and education. Can you tell our readers a bit about how Pexapark sees PPAs in the current wind energy environment?

Mastering the PPA will determine the success or failure of renewable energy investments in the foreseeable future. In many countries, the PPA market in renewable energy is currently still in its infancy. Until recently renewable power sales were guaranteed through tariffs from the government, whereas today they are transacted in the open market via a PPA. This means that the market has moved from a bond-like investment with guaranteed cash-flows to a quasi-equity investment. On the one hand, this offers higher upside but, on other hand, this comes at the cost of counterparty risk, price fluctuations and volatility. As I said: mastering the PPA will determine the success or failure of renewable energy investments in the foreseeable future. Our role at Pexapark is to guide our clients through this transition and offer them a first mover advantage in this newly emerging market. 

This month you will be participating in the RE-Source 2018 event. Why is an event like this important?

As a platform it is very important to us to continually grow our relationships with the major market participants in the renewables industry. RE-Source 2018 is one of the few events that allows us to meet a great deal of buyers, sellers and market participants with whom we look forward to exchanging opinions on the trends and opportunities in the market.

What would you say to people who are sceptical about corporate-renewable energy sourcing?

To some degree we can understand their caution – the entry of many new potential buyers did increase transaction costs. Also, corporate buyers typically have a different approach to the market than utilities, which is a learning curve for many sellers. In some cases a long-term PPA is not a good solution for many corporates. But this is all the more reason for corporates to learn more about PPAs now, so they can make the best decisions for themselves.

What changes would you like to see in the wind industry?

The biggest change we would like to see is the internationalisation of PPA markets through the entry of additional off-takers. As we are still at a very early stage within the industry, we see various market participants willing to test new strategies such as building their own trading desks or developing new investment products for corporates. The internationalisation of PPAs could accelerate this process, by making the markets more liberalised, transparent and fluid.

What role do you see Pexapark playing in the future development of wind energy?

Our role is to bring fluidity and transparency to the market by helping investors close the best possible PPAs and then offer them a set of tools to help them manage their revenue streams and risks on an ongoing basis. Our long-term goal (which we realise is very ambitious) is to reach a 10% share of the global renewables market and, in doing so, to help the industry evolve.

How has WindEurope membership benefited your organisation?

WindEurope has been a wonderful partner to have, in addition to helping us with introductions to market participants and showcasing our company in such a personalised manner, we are most grateful for the relationship we have built with WindEurope and look forward to a very successful RE-Source 2018.

If we look ten years ahead, what do you hope to have achieved?

That Pexapark is not only the market reference for PPA transactions but that we have helped hundreds of clients through an exciting but challenging market shift into a new era of renewable energy investments.

 


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