SERVICE

Common Needs and Concerns

• Market price analysis

  • Recently, spot market prices have surged, and we would like to analyze whether this is due to fundamentals (supply and demand structure/fuel prices) or sentiment (market psychology, etc.).
  • Based on the above analysis, we would like to make an assessment of the future outlook for spot market prices.

• Corporate planning

  • When formulating the business plan for the next fiscal year for our power business, we are unsure what values to use for forecasting spot market prices.

• Price assessment for electricity trading

  • We are considering bilateral transactions as one of our means of procuring electricity, but we cannot determine if the price level is reasonable.
  • We’re trading electricity futures, but we are unsure if the price is reasonable in relation to the fundamentals.

• Bidding in the power supply auction

  • We want to calculate revenue from other markets when bidding on the capacity market, but I don't know what values to use to forecast the spot market price.

Common Needs and Concerns

• Investment decision-making for renewable energy and battery-related assets

  • When investing in or financing solar/wind power generation and grid-mounted battery storage, we want to evaluate the projected returns, but we are unsure how to incorporate the uncertainties in "volume" and "price."

Solutions

• Risk management

  • As our company's portfolio expands and becomes more complex, we are concerned that we could fall into a serious negative margin depending on electricity market prices and fuel prices.
  • We were asked internally, "Would it be a problem for our business if we experienced a similar surge in spot prices as in 2020?" but we don't know how to evaluate it.
  • We conduct electricity trading across different areas, but we are concerned because we cannot visualize to what extent the widening price difference between areas may affect our profits.

Solutions

• Calculation of price forecasts based on different scenarios

  • Given the uncertainties surrounding the future electricity market, we would like to evaluate the electricity price outlook by considering multiple scenarios for parameters such as demand, supply capacity, fuel prices, and carbon prices.
  • We are considering developing our fundamental models in-house, but we are having trouble because it seems difficult to prepare all the input data ourselves.

Common Needs and Concerns

• Economic evaluation of electricity retail contracts

  • When concluding electricity retail contracts for the next fiscal year, we are considering several types of contracts, including fuel adjustment contracts and market-linked contracts, but we are unsure how to compare the economics of each type of contract.

Common Needs and Concerns

• Price assessment of renewable energy PPAs

  • We are considering signing a long-term renewable energy PPA, but we are unsure how to evaluate the reasonableness of its price.

• Market value evaluation of Virtual PPAs

  • We are working with an audit firm to determine the fair value of our non-fossil fuel assets, but we don't know how to calculate it.

Common Needs and Concerns

• Investment and financing decision-making for renewable energy and battery-related assets

  • When investing in or financing solar/wind power generation and grid-mounted battery storage, we want to evaluate the projected returns, but we are unsure how to incorporate the uncertainties in "volume" and "price."

Common Needs and Concerns

• Market value evaluation of Virtual PPAs

  • We are considering the market value assessment of the non-fossil fuel assets held by our client, but we are unsure how to quantify this value specifically.