Azraq Energy Pricing Module · Ornstein-Uhlenbeck

Energy Pricing Model

A mean-reverting simulation of the delivered retail power tariff, calibrated on National Grid MA's G-3 rate class: what power would cost without a broker deal. The model itself runs on the brokered base case of $45.38/MWh (4.538¢/kWh), escalated 4% a year, with the same mean-reverting volatility applied around it (Assumptions §10). Under the true NNN leases the operator pays for its own power, so the tariff moves the landlord's result only through the ~2% of cost it retains.

N = 20,000 paths seed 42 T0 = Aug 2026 Exit = Dec 2036 Calibration window: 5yr

Power tariff simulation

Ornstein-Uhlenbeck percentile band (unshaped), ¢/kWh. The dashed line is the same median path with the seasonal index applied month by month.

P25–P75
P5–P95
OU median (unshaped)
Seasonally shaped median
Model tariff, brokered (4.5¢)

Seasonal index

Multiplicative, normalised to 1.0 annual mean, derived from history excluding the Nov 2022–Apr 2023 gas-crisis months.

Stress comparison

Standard GBM (no mean reversion), used only as a ceiling stress test, not the DCF central case.