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Reducing Risk in Merchant Wind and Solar Projects through Financial Hedges

Wind and, increasingly, solar projects are expanding beyond long-term power contracts to sell directly into wholesale markets. These “merchant” projects use financial hedges to reduce the risk of lower-than-expected prices in order to secure financing, but hedges entail costs and additional risks.

Working Paper (19-06) by Jay Bartlett — 1 minute read — Feb. 22, 2019