Technical Due Diligence: “The renewable energy projects are real plants that have to be built”

AleaSoft, December 2, 2020. In addition to the aspects related to the financing of the renewable energies, the more technical issues related to the construction and operation of the plants are also crucial. The technical Due Diligence is an audit carried out by expert advisors who identify and propose tools to mitigate all the risks of a renewable energy project associated with the generation equipment, the location of the plant, the necessary permits and the contracts to be signed.
AleaSoft - wind energy farm
Last Thursday, November 26, the last webinar of the year 2020 organised at AleaSoft was held. In the event, where speakers from Vector Renewables also participated, the evolution of the energy markets, the new renewable energy auctions in Spain and the importance of the technical Due Diligence in the renewable energy projects were analysed.

The technical Due Diligence

Beyond the financing, the auctions and the PPAs, the renewable energy projects are electricity generation plants that have to be built and operated, and their construction and maintenance entail associated risks that must be identified, valued and tried to mitigate. This is where the technical Due Diligence and its importance in the planning and development of the projects of generation plants based on renewable energies come in.

During the webinar, the Vector Renewables experts detailed all aspects of the technical Due Diligence for the renewable energy projects, highlighting those that are not normally given the necessary attention and those that tend to be more controversial between consultants and owners.

Starting from a main risks matrix, a technical Due Diligence explores every conceivable aspect of a project, even those that could easily be overlooked when planning a new renewable energy facility. From the environmental and subsoil conditions of the place chosen for the construction of the plant, to the correct timing of the contracts with all the parties, through the guarantees and the after‑sales service of the manufacturer of the photovoltaic modules.

AleaSoft - Technical due dilligence key issues matrixSource: Vector Renewables.

Importance in the projects financing

The objective of technical Due Diligence is both to identify and understand the risks and to propose how to mitigate them. According to the experts: “every problem has to come with a solution”. Carrying out the audit before the construction is important, since it is a requirement by banks and financial institutions to size the debt and estimate the profitability of the project.

Next AleaSoft webinar, in 2021

The webinar of November 26 was the first part of a series of webinars, the second part of which is scheduled for January 14. On this next occasion, there will be the participation of speakers from the consulting firm PwC Spain, to analyse the vision of the PPA contracts market for large consumers, its impacts and requirements, and of the need for future electricity market prices estimates.

A fundamental function of AleaSoft is transforming the information of the energy markets into knowledge, intelligence, vision and opportunities, and for this it has a set of reports for the energy sector that can be contracted. These reports provide market intelligence resulting from processing the company’s historical databases of real and forecasting data.

Source: AleaSoft Energy Forecasting.

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