The renewable generation sector covers a wide range of technologies in varying states of maturity from more established technologies such as hydro and onshore wind to emerging technologies such as marine renewables and new forms of biomass generation. The levels of penetration of renewables in European countries vary widely reflecting resource availability and historical government policies, but all EU Member States are now committed to rapid expansion of renewable generation governed by the 2020 Renewables Directive. Few renewable technologies are yet cost competitive with conventional fossil-fuel alternatives requiring governments to offer financial support in the form of a premium to the wholesale electricity price or a set price for renewable generation. In doing so, governments must balance the need to promote innovation and learning by supporting more expensive, less mature technologies with the need to keep costs down for consumers.
Developers and investors in renewable generation projects have a range of factors to consider – the availability, form and level of financial support available (which vary widely between Member States), the associated policy and regulatory stability, how to secure consents, the cost and availability of grid connections, financing options, balancing risks and the route-to-market for their power.
Baringa advises on all of these issues for a wide range of clients. For example, we have assessed contracts for difference allocation risk for developers of biomass projects in Great Britain, undertaken due diligence for investors in offshore wind farms in Denmark, conducted a valuation of a renewable portfolios in France in support of marketing an investment fund, and advised on power purchase agreements for developers of onshore wind projects in Poland and Romania. We also advise governments in the area of renewables policy, for example recently advising the UK Government on options to promote liquidity in the renewable power purchase agreement market.