However, while market prices have adjusted, they do not yet appear to capture the full value of the step-ups. This suggests potential for further market correction and highlights the need for investors to factor in the nuances of SLB structures when assessing risk and return.
Axpo’s case shows how the ambition level of an SLB target can influence whether it’s achieved. The company set a goal to add 1,500 MW of renewable capacity by 2024 but fell short by around 34%. According to Axpo, a mix of obstacles — including slow approval processes and geopolitical instability — hindered progress toward the target.
