According to Bloomberg NEF, USD 366 billion was invested in renewable energy in 2021, 6.5% more than in 20201. The growing global demand for energy, combined with the drive for climate-neutral energy production, makes a slowdown in the rapid expansion of renewable energy plants a distant prospect.
Countering complexity with uniform processes
The competition for the most lucrative project rights will continue to increase in such a market constellation and once again put pressure on returns for long-term investors. The currently very high energy prices can have a positive effect on the returns of some projects, provided that the inflation of current operating costs does not completely eat up the increase in revenues. For this very reason, it is becoming increasingly important to keep track of the actual financial performance of renewable energy plants, especially in particularly volatile times. The larger the portfolio, the more complex it becomes to make a structured and reliable statement about the financial situation of the acquired plants.
The basis for this are uniform data structures and established processes, which should be an integral part of asset management from the very beginning. The more assets there are to manage, the greater the challenge of growing data in a structured manner and carrying out targeted analyses. In such a constellation, how can realistic statements be made about the return that can be expected from the investments in the long term?
Accounting data as a source of information with reliability guarantee
The most realistic statement can be made after supplementing the original financial plan with the real figures from accounting and using these to create an updated financial model for the remaining project duration. We therefore recommend that already when creating transaction plans, care is taken to assign each cost item to a category corresponding to the chart of accounts. This enables valuable analyses during operation.
Comparison of planned and actual figures as a basis for corrective measures
This allows you to clearly track the categories in which there are deviations. In addition to the pure recalculation of the medium-term yield, the comparison of planned and actual figures offers the possibility to systematically analyse deviations and take corrective measures. These could be, for example, the renegotiation of relevant contracts or the adjustment of the financing structure. In addition, the updated financial model is ideally suited to fulfill the numerous reporting obligations, such as compliance with the DSCR or verification of liquidity. With greenmatch, you can meet this obligation by inviting selected partners directly to your project.
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Sources:
1 Bloomberg New Energy Finance: [ https://about.bnef.com/blog/global-investment-in-low-carbon-energy-transition-hit-755-billion-in-2021/)
