If some information is missing, you can have assumptions. Just make sure that your assumptions will be mentioned on the answer

Company A is evaluating an offshore investment in renewable energy to pay for its CO2-e emissions and sell the remainder (RECs) to the Australian market. The questions in this exam will present the theories and characteristics for this investment in RECs.

Assuming that Company A will generate 3M RECs in the offshore operation. Considering that the company's own consumption is 300,000 RECs/a will be used for the operation in Australia, 2,7MRECs/a will remain to be sold in the Australian market.

Question 4 - Pricing

b- Assuming this company participates in a duopolio in the generation and sale of RECs, would you advise it to sign energy hedge agreements, or not? Use Nash's theory to explain your answer and highlight the advantages and disadvantages of having an energy hedge agreement.