Risk transformation of a zero-subsidy wind portfolio

Joaquin Narro analyses the hedging of a hypothetical zero-subsidy wind portfolio with base load products in the futures markets

After years of declining costs, wind power is now among the cheapest of the new power plant technologies. This is manifested in an increase in zero-subsidy bids for wind projects, as more and more companies rely on wholesale market prices rather than extra government support for wind projects (Reuters). 

In this environment, a strong track record in building and operating wind farms is important, but not enough, as the ability of wind operators to handle market risk and sell electricity on the