Can offshore wind bidders increase chances of success and profitability in the upcoming UK CfD Allocation Round 7?
Offshore wind projects often entail a high upfront cost, a complex operational environment, and ever-evolving markets and regulatory conditions. To navigate this uncertain landscape, probabilistic business case simulation can help project owners make more informed bids and manage portfolio risk.
Monte Carlo simulation is an advanced probabilistic method in Aegir Quant which can simulate thousands of commercial scenarios. This provides a clear, quantitative view of how both technical and financial factors impact project performance. It replaces traditional deterministic ‘scenario’ approaches which are often subject to substantial bias, making for better informed bid and portfolio decisions.
This gives a competitive edge ahead of auctions, like the upcoming UK CfD AR7, which require not only an understanding of one’s own business case, but also all of the competitions'.
To correctly predict auction outcomes, developers must consider their own and competitors’:
🔹Portfolio synergies
🔹Procurement purchasing power
🔹Willingness to bid
🔹Long-range wake effects
🔹Project site and design characteristics
With Aegir Quant, Aegir Insights’ clients have access to the sector’s most powerful solution for bid and competitor simulation, backed by a team with industry experience across more than 18 global offshore wind auctions. Aegir’s clients additionally have access to a new white paper, giving an introduction to Monte Carlo simulation applications.
Reach out to us to learn more about how Aegir Insights' advanced commercial tool kit can help you succeed in the evolving renewables energy landscape.
Monte Carlo simulation in Aegir Quant
Monte Carlo simulation is a widely used analytical method, leveraging computational power to simulate and assess future performance. The simulation output is often presented as histograms that illustrate the frequency of various outcomes. This provides both a visual and quantitative understanding of multiple interacting factors. Cross-industry examples include estimating future energy generation under variable weather conditions, predicting oil and gas reservoir performance, or evaluating portfolio risk and option pricing in finance.
Monte Carlo simulations can be essential when managing uncertainty, identifying risks, and optimizing strategies.
Aegir Quant features full Monte Carlo simulation. Clients with access to Aegir Quant can leverage pre-modeled cases for all offshore wind projects globally and on-call sparring with industry experts. Reach out to get a demo of the Monte Carlo simulation center in Aegir Quant.
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