Statkraft's 150 GWh offtake arrives without a price

Statkraft will buy 150 GWh from a hybrid project in Germany, according to a Renewables Now item published September 23, but the coverage does not identify the developer, state a price, fix a contract length, or specify which technologies the hybrid pairs. A buyer, a volume, a country: that is the whole of the disclosure.

Begin with the unit, which is carrying more weight than a unit should. A gigawatt-hour measures energy, not capacity or a rate, so 150 GWh cannot be turned into megawatts, a capital cost, or a price per megawatt-hour without a tenor attached to it. The coverage does not say whether the figure is an annual delivery or a sum across the life of the contract, and those two readings describe different assets — a reader cannot tell which one is on the table.

The blank price column has been this publication's running complaint about project announcements, and we have argued it has since migrated to the cap table, where merchant risk pools at the ownership level. The Statkraft item suggests the pattern has moved one stage further downstream, into the contract that is supposed to be the cure. An offtake exists to shift price risk off a project and onto a creditworthy buyer; announced as a volume with no terms attached, it shifts the headline and leaves the risk where it was. A lender sizing debt against the German hybrid on the strength of that line would be underwriting a number it cannot model.

Volume is the likely reason the headline reads the way it does: a delivery figure can be published without disclosing either side's commercial position, while a price tells the market what a German hybrid is worth per megawatt-hour, the number a developer with a second project to finance has an interest in keeping private until the next negotiation closes. The commercial logic is unremarkable, but the effect for anyone reading the announcement as a market signal is that the one figure published is the one that cannot be underwritten.

A named buyer committing to 150 GWh is evidence that a German hybrid project can still find a counterparty, which is not a small thing in a market where securing the offtake is what unlocks construction. Demand and price, though, are separate facts, and only one of them made it into the announcement.

The developer's name is the first thing to watch for and the tenor the second.