EnSurance delivers an executable revenue risk transfer offering, optimized for the project specifications and the owner's risk appetite. Ascend provides ongoing management of operational risk with energy bid optimization via SmartBidder.

Case Study: 1 GWh Energy Storage Portfolio

Ascend Analytics' client sought to derisk the recovery of the portfolio's $500M installed cost using an EnSurance revenue floor. Working with lenders and outside equity investors, EnSurance identified a five-year floor at the 10th percentile of the revenue distribution to be optimal given the client's risk appetite and capital allocation preferences.

In the above example, EnSurance provides 10th percentile revenue strike price for a 5-year term, which, combined with the monetization of ITCs, guarantees 70% of the sponsor equity's capital to be recovered.

The client compared debt terms structured upon the EnSurance floor with terms based upon (1) fully merchant cash flows, and (2) a five-year toll, per competitively solicited terms. The probabilistic underwriting of th EnSurance floor secured higher earnings than the tolling rate, enabling the project to secure greater leverage. Since the debt was structured upon cash flow insured by investment-grade insurers, lenders' rights to accelerate amortization through an upside sweep were removed by the insured floor.

The client's retention of upside permits additional financing via a preferred equity investment that is recovered through a share of earnings excess of the EnSurance floor. This preferred equity investment enables a step-up in the Investment Tax Credit (ITC) cost basis for the facility, decreasing the net contribution of project owner equity.

Ascend's PowerSIMM calculated the client's realized value from each financing framework across hundreds of simulated timeseries market conditions. The resulting distributions emphasized the value of the EnSurance floor in protecting against downside outcomes while preserving the client's exposure to upside profitability.

Insured minimum earnings enable the project sponsor to write a smaller equity check, while preserved upside exposure enables the sponsor, instead of the risk-taker or lender, to realize a supernormal return on investment.

The increased leverage permitted by the EnSurance floor enables the retained upside to yield 20yr IRRs of 40%in the p50 outcome, with Ascend ITC step-up.

Effective Risk Transfer for Clean Energy Transitions

EnSurance creates efficient risk transfer through forecasting merchant revenue exposure and distributing risk across broad pools of capital, harnessing the combined capability of Ascend Analytics' ecosystem of software and services.

Backed by Ascend Analytics' 20+ years of tested forecasting and operational efficacy, insurance carriers and institutional investors trust EnSurance to efficiently reduce market risk, thereby enabling faster renewable energy growth.