The Greatest Challenges of an Asset Manager in Renewable Energies

24/03/2020 | greenmatch AG

Today's asset manager faces many challenges; a fact which was already made clear in the "Tasks of an Asset Manager for Renewables". There are various reasons for these challenges, which we would like to discuss in more detail in the following blog post.

Keeping Track of Enormous Amounts of Data is Becoming Increasingly Difficult

Overcoming obstacles in asset management

Professionalisation in the asset management of renewable energies goes hand in hand with the intention to continually optimise the assets. For this purpose, ever newer analysis options are available, which in turn draw data from a wide variety of information sources.

The challenge for the asset manager is to identify these new information sources and to make sense of the acquired data. It is important for him or her to have an over-all view and to analyse the interaction of individual factors in order to draw concrete conclusions and thus make decisions.

For a single wind turbine, the amount of data may still be manageable. However, for an entire portfolio, both aggregating the information and analysing the assets in the portfolio become challenging.

More Assets Under Management

At the latest since the energy turnaround initiated in the 2010s, more renewable energies have been put into operation worldwide. According to the "Renewable Energy Policy Network for the 21st Century (REN21)", 181 GW of installed capacity was added between 2017 and 2018. This is equivalent to around 72,400 wind turbines with a capacity of 2.5 MW each.

What is a huge step forward for the energy market, is a real challenge for asset managers. Because without additional specialists, growth is also a test of strength of efficient working methods. Ultimately, this would slow down the upward trend - unless the affected processes can be made more efficient.

However, it is not only the scope of the renewable energy projects that adds to the complexity of the asset manager’s work, but also the internationalisation of the portfolios. Investors are increasingly trying to diversify their portfolios and associated risks by investing in projects in different countries.

For the asset manager, this involves taking country-specific factors (such as taxes) into account and managing additional data. Unfortunately, the more work is to be done, the higher the risk of errors. Such errors can quickly cause horrendous additional costs and thus put pressure on the profitability of the assets.

There are two ways to address this:

  1. Extending the team in proportion to the number of assets to be managed
  2. Investing in more efficient tools, software and automation

Today, it is software and automation in particular that can significantly simplify and optimise asset management. A topic upon which we have provided specific tips in a different blog post.

Guaranteed Returns Above the Market Average

The market for renewable energies is experiencing increasing pressure. Examples include the decreasing feed-in tariffs or the liberalisation of the energy market. With declining and generally unstable revenues, in turn, returns are being put at risk. This is a challenge for the asset manager, as revenues must nevertheless flow continuously and as planned - both to cover operating costs and to satisfy investors.

Therefore, on-going tracking of revenues is just as essential as the comparison of actual and target figures. Hence, having efficient working methods, is of clear advantage. Minimising unnecessary time losses, avoiding errors and being able to spend more time on analysis and optimisation should be the goal of the asset manager. Implementing these goals may vary in difficulty from company to company. However, if there is more time for optimisation and thus higher returns can be achieved, then the asset manager can stand out from the rest.

What challenges do you face in your everyday asset management? Share your experiences:


Related articles:

The financing landscape for solar projects in Brazil

Tasks of an Asset Manager

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