The problem is not price. 
It is what comes with it.

A gap between production and hedging

Traditional hedging approaches each serve a purpose.
Base load structures offer simplicity and a fixed price, but rely on a stable production profile. When output deviates, the hedge introduces volume risk rather than reducing it. Pay-as-produced structures, such as PPAs, remove volume risk, but typically require long-term commitments and often come at a discount to the baseload price. For portfolios characterised by variability, this creates a structural gap. Asset owners are often forced to choose between taking on volume risk or accepting a discount for flexibility.

This trade-off becomes clearer when comparing how risk is distributed across different structures.

A structure built around volume flexibility

VolFlex was developed as part of Norlys Energy Trading's FlexHedge framework to address that gap, in close dialogue with renewable asset owners. At its core, the structure replaces fixed volume commitments with agreed volume bands, letting the hedge follow actual production rather than a predetermined schedule. It can be applied at asset level - on a specific wind farm or solar park - or at portfolio level, where the hedge is linked to a broader production index such as DK1 wind generation. At portfolio level, this shifts the focus from asset-level performance to portfolio-level behaviour. Settlement is based on indexed production over predefined periods, reducing the need for continuous volume adjustments while still enabling asset owners to secure a fixed price level.

The result is operational simplicity without forcing portfolios into fixed volume commitments.

The relevance of this approach is already visible in the market. Cloudberry Clean Energy, a Nordic IPP investing across wind, solar and BESS, recently applied VolFlex at portfolio level to their Danish wind portfolio - hedging production against the DK1 wind index. For Cloudberry, the structure delivered long-term price certainty without the volume risk of a baseload hedge and without the discount typically attached to pay-as-produced structures.

Balancing price certainty and simplicity

Within the FlexHedge framework, VolFlex sits between traditional base load hedges and pay-as-produced structures. It combines price certainty with a simplified operational setup, adapting the hedge to how the underlying assets actually produce - whether applied to a single asset or across a portfolio.

From a risk perspective, the structure removes volume risk from the asset owner, while profile risk remains with the portfolio.

This is reflected in how revenue variability is distributed across different hedging approaches.

‍

‍

‍
A complement in a shifting market‍

Standard hedging products remain essential and will continue to serve a wide range of asset-specific use cases. VolFlex complements these structures with a portfolio-based solution that removes operational complexity from the hedging activity.

As renewable portfolios grow in scale and complexity, the interaction between price, volume and profile risk becomes more visible. Managing these risks in isolation is no longer sufficient. Hedging has traditionally been built on standardisation, which enables liquidity and scalability. But increasing variability in renewable generation is challenging some of the assumptions behind these structures. For certain portfolios, the question is no longer which product to choose, but how to structure hedging around portfolio-level performance.

VolFlex is one response to that development. Some asset owners will continue to rely on existing approaches. Others will look for solutions that simplify hedging while reflecting how their portfolios operate in practice.

That shift is already underway.