Technical Due Diligence for Renewable Energy Projects
Investing in a commercial MWp renewable energy project is often a complex undertaking that requires a high level of evaluation.
Understanding and mitigating or eliminating the risks associated with renewable energy projects is essential for developers, lenders and investors alike.
Commercial renewable energy projects are relatively new for financiers and developers and come with many new challenges. Thus, deciding to finance or develop a project based on “experience” alone is difficult, but a specific assessment is needed.
What is Technical Due Diligence?
Technical Due Diligence, or TDD, is an independent, unique and impartial evaluation method that technically justifies and substantiates an investment, whether it is the development, financing or acquisition of an existing project.
TDD is a complementary assessment to legal and financial appraisals of an investment that helps you understand the technical feasibility of your project with a complete analysis of the technical risks and opportunities.
Such an analysis directly influences the financial evaluation of an investment, i.e. its profitability, depreciation, medium and long-term returns, the need for periodic capital injection, maintenance costs and more.
How can we help you reduce the uncertainty of an investment?
Servelect’s Technical Due Diligence analysis is based on five fundamental pillars:
- Analysis of the main components used in the project.
- The project design (compatibility of components, risks or opportunities for design improvement vs costs, technical compatibility of the developed solution with the site, integration into the site);
- Evaluation of the approvals obtained and the implications for the project (costs, risks, limitations, development times);
- Engineering, procurement and construction contracts (individual or cumulative);
- Operation and maintenance contracts (including site management contracts and ancillary services).
In addition to these five aspects, our TDD analysis includes an independent assessment of estimated energy production.
What are the benefits of a Technical Due Diligence analysis?
Make informed decisions about providing financing, knowing the technical risks and mitigation strategies;
Offer customised financing solutions (individual or in combination with insurance policies);
You have independent and impartial technical expertise at your disposal.
Increase the confidence of third parties in the developed solution (shareholders, funding institutions, crowdfunding, local community investment);
Identify project risks in advance (before taking steps to obtain funding);
Identify limitations imposed by external factors (e.g. proximity of the chosen site to buffer zones, national interest objectives);
Identify the risks associated with the chosen technology (e.g. known serial defects, degradation mechanisms specific to the product or use of the product in the given environment);
External technical support, independent project evaluation and transparency;
Knowledge of the feasibility of the technical solution to local geo-socio-technical parameters.
Identify and avoid the risks of investing in a commercial renewable energy project.
Why use technical due diligence for renewable energy projects from Servelect?
A TDD assessment achieves its objectives when it is carried out by third parties utterly independent of the funder and the developer.
Due to the novelty of commercial PV park development, there is currently no “standard” method to perform a TDD analysis.
This offers flexibility in the approach to evaluation and allows for “tailor-made” project evaluations. The disadvantage of a “non-standard” solution is the direct link between the quality of the TDD analysis and the experience with such analyses of the evaluators.
Involvement in TDD analysis in international photovoltaic projects with a cumulative installed capacity of over 1000 MWh and a total investment value of over 800 million euros in countries such as Italy, Spain, France, Japan, Chile, Romania, and Portugal.
More than 18 years of experience implementing energy efficiency and local energy production projects in the industrial, commercial and public sectors.
Active involvement in training and education sessions in the field of renewable energies and evaluation of technologies needed in the development of photovoltaic parks.
Knowledge of the initial investments required in developing a renewable energy project and the investments required for the successful operation of such a project.