Canadian Solar transitions to a new modelling approach with Lacima Trader.
Canadian Solar successfully implemented Lacima Trader>Sim to undertake the valuation of renewable assets on their portfolio of solar contracts in Australia.
As a renewable energy producer, Canadian Solar are exposed to both volume and price risks. They identified that their existing modelling framework, which employed a fundamental (intrinsic value) approach, was not accurately capturing the volatile nature of electricity prices associated with bidding behaviour when looking at granularities within intra-day and sub-hourly levels.
To value their assets more accurately, Canadian Solar required a new modelling framework to better simulate volatility and bidding behaviour in the market and therefore capture extrinsic value.
Lacima was selected for its best-in-class analytics which capture the true dynamics of the energy markets with an easy to use product that can be rapidly deployed.
Canadian Solar (NASDAQ: CSIQ) operates as a global energy provider with successful business subsidiaries in nineteen countries on six continents. Canadian Solar is both a global leading manufacturer of solar PV modules and a provider of solar energy solutions, with over 13,000 employees globally.
To date, Canadian Solar has 4.7 GW solar power plants built and connected globally and maintains a portfolio of solar power plants in operation at 795.8 MW. In addition, Canadian Solar has a geographically diversified utility-scale solar power project pipeline around 13 GW in total.
Lacima Trader>Sim, with single factor modelling, has been implemented to accurately model power prices across multiple granularities (to five minute intervals) whilst capturing extreme price movements from negative to high spikes.
With this solution, Canadian Solar was able to produce generation weighted energy and ancillary service curves with sub-hourly granularity up to 35 years ahead. The Excel plug-in solution was rapidly deployed and quickly configured with minimal training or integration needs.
Implementing Lacima Trader>Sim, has delivered more accurate asset valuations and is providing Canadian Solar deeper insights into the intrinsic and extrinsic values of its assets and potential investments as well as creating high granularity ancillary service pricing curves to underpin storage valuations, ultimately, resulting in improved confidence and strength at the negotiating table.