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Value in Energy Profile Shapes
Renewable energy sources can offer a shaped profile that commands a price premium based on their ability to deliver energy during specific time periods. This shaped energy profile involves volume requirements, and when taken to its extreme, can lead to base load contracts, which have become prominent in trading. These base load contracts carry a premium over renewable Power Purchase Agreements (PPAs) due to the additional risks—shape, volume, and price—that producers assume in delivering a consistent energy volume across every hour. Energy storage plays a crucial role in hedging against these risks, enhancing the reliability of energy production.