Pricing the risk due to weather conditions in small variable renewable energy projects

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2023-02-19

Autores

Mosquera López, Stephania
Uribe, Jorge M.

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Universidad EAFIT

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Risk analysis based on weather variables allows estimating the premium even if the insurance company lacks information about past RE projects with similar characteristics. The proposed methodology could be used to price the risk of a given VRE project when only weather series and technology features are available and, therefore, is of interest as well for banks and investors in the energy sector. This study illustrates the proposed technique with solar panels, where the modeling of solar radiation (i.e., its natural input for electricity generation) allows them to find an optimal way to measure the risk of generation, particularly associated with weather factors’’

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