{"id":6195,"date":"2025-07-03T12:32:11","date_gmt":"2025-07-03T12:32:11","guid":{"rendered":"https:\/\/www.rgreeninvest.com\/?p=6195"},"modified":"2025-07-03T12:32:15","modified_gmt":"2025-07-03T12:32:15","slug":"navigating-merchant-risk","status":"publish","type":"post","link":"https:\/\/www.rgreeninvest.com\/en\/2025\/07\/03\/navigating-merchant-risk\/","title":{"rendered":"Navigating Merchant Risk: How we do it at RGREEN INVEST"},"content":{"rendered":"

[et_pb_section fb_built=”1″ admin_label=”section” _builder_version=”4.16″ da_disable_devices=”off|off|off” global_colors_info=”{}” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row admin_label=”row” _builder_version=”4.21.0″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.21.0″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text _builder_version=”4.21.0″ _module_preset=”default” global_colors_info=”{}”]<\/p>\n

Merchant risk refers to the exposure to fluctuating market prices without guaranteed revenues, a key issue in renewable energy projects. Because electricity prices can vary significantly over time, projects operating without long-term contracts may face lower-than-expected returns. Periods of low demand or oversupply can intensify this exposure and lead to financial underperformance.<\/p>\n

While merchant risk does imply a degree of revenue uncertainty, it remains manageable\u2014and, when addressed properly, can offer attractive returns.<\/p>\n

At RGREEN INVEST, we apply a five-part strategy to manage merchant risk across our portfolio:<\/p>\n

    \n
  1. We work exclusively with counterparties and sponsors who demonstrate strong market insight and the technical capabilities to manage merchant exposure effectively.<\/li>\n<\/ol>\n
      \n
    1. We maintain a balanced portfolio in which assets exposed to merchant risk represent a minority share.<\/li>\n<\/ol>\n
        \n
      1. Our merchant-exposed assets are diversified across technologies and geographies, recognizing that each market presents unique volatility profiles.<\/li>\n<\/ol>\n
          \n
        1. We adopt conservative acquisition scenarios, targeting assets that deliver a minimum Levelized Cost Of Energy (LCOE) between \u20ac25 and \u20ac60 per MWh. This provides significant upside potential when electricity prices exceed expectations.<\/li>\n<\/ol>\n
            \n
          1. We structure our investments using preferred shares or convertible bonds, helping us preserve returns even in downside scenarios.<\/li>\n<\/ol>\n

            Battery storage plays a key role in mitigating merchant risk, and we\u2019ve applied this approach successfully across several of our portfolio companies. Renalfa IPP, NW Storm, and Bnewable are all strong examples of managing merchant risk.<\/p>\n

            Renalfa IPP uses time shifting, storing electricity and reselling it when prices peak\u2014thus generating additional revenue. NW Storm has developed a distributed storage model that improves reliability and supports ancillary services essential for grid stability. Bnewable enables both commercial and residential consumers to reduce their electricity costs through peak shaving and to optimize their energy mix via increased self-consumption.<\/p>\n

            All our battery storage assets are underpinned by price arbitrage mechanisms, enabling us to maintain profitability across the portfolio while enhancing energy system resilience.<\/p>\n

             <\/p>\n

            \n

            Want to explore our full approach? to access our technical note on merchant risk management write an e-mail at communication@rgreeninvest.com<\/u><\/p>\n<\/blockquote>\n

             <\/p>\n

             <\/p>\n

             <\/p>\n

            [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":"

            Merchant risk refers to the exposure to fluctuating market prices without guaranteed revenues, a key issue in renewable energy projects. Because electricity prices can vary significantly over time, projects operating without long-term contracts may face lower-than-expected returns. Periods of low demand or oversupply can intensify this exposure and lead to financial underperformance. While merchant risk […]<\/p>\n","protected":false},"author":8,"featured_media":1759,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","inline_featured_image":false,"footnotes":""},"categories":[45],"tags":[],"annees":[52],"sp_smart_badges":[],"class_list":["post-6195","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-press-releases","annees-2023-en"],"yoast_head":"\nNavigating Merchant Risk<\/title>\n<meta name=\"description\" content=\"Navigating Merchant Risk: How we do it ?\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.rgreeninvest.com\/en\/2025\/07\/03\/navigating-merchant-risk\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Navigating Merchant Risk\" \/>\n<meta property=\"og:description\" content=\"Navigating Merchant Risk: How we do it ?\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.rgreeninvest.com\/en\/2025\/07\/03\/navigating-merchant-risk\/\" \/>\n<meta property=\"og:site_name\" content=\"RGREEN INVEST\" \/>\n<meta property=\"article:published_time\" content=\"2025-07-03T12:32:11+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-07-03T12:32:15+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.rgreeninvest.com\/wp-content\/uploads\/2023\/01\/R-pour-video-desktop-def-with-DH.png\" \/>\n\t<meta property=\"og:image:width\" content=\"7680\" \/>\n\t<meta property=\"og:image:height\" content=\"4320\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Milena FEDIDA\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" 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