Efficient Profitability Calculation of Renewable Energy Projects

01/10/2021 | Oliver Stock, greenmatch AG

The fact that renewable energies are booming is no longer a secret. In a negative interest rate environment, the asset class of renewables represents an even more attractive investment opportunity. We explain what investors need to bear in mind, especially now, when competition is fierce.

Standardised profitability calculation as an advantage in efficiency

According to Bloomberg New Energy Finance, 303.5 billion dollars were spent on the development of new renewable energy plants in 20201. Particularly when so much capital is being spent, it is extremely important that projects are carefully examined in the course of a profitability calculation, and this despite high competitive pressure. Particularly when acting on a large project pipeline, investment managers can easily reach their limits with conventional calculation programmes. It therefore makes sense to rely on a standardised financial model in which a uniform basic structure and calculation logic makes time-consuming discussions about calculation details needless.

The common spreadsheet applications often have to be adapted, especially in the case of a diversified investment strategy, with a lot of time and money spent. However, the responsible actors are not spared the discussions regarding the applied calculation logics.

Based on greenmatch’s standardised financial model, projects can be efficiently modelled, structured and managed regardless of their country specifics, project status or technology. The web-based software was designed to make highly complex project structures comparable and to make realistic statements regarding the returns that can actually be achieved. "A careful profitability calculation also includes carrying out scenario analyses, as well as comprehensive liquidity planning," says greenmatch CEO Doreen Pimpl. Since this is an exceedingly inefficient matter via Excel, some liquidity gaps are simply overlooked. This can have fatal consequences for the long-term investor.

Financial performance tracking for operating assets

Projects should be financially managed throughout their operation as well, as this allows realistic return estimates. Liquidity gaps can only be detected and remedied at an early stage through continuous financial performance monitoring. greenmatch offers also an excellent basis for this case. Based on the initial transaction plan, continuously updated financial plans can be recorded through reconciliation with accounting data, deviations can be detected at an early stage and measures can be taken to secure returns.

Are you planning multiple investments in renewables or want to manage existing assets in a professional and efficient way? Contact us today for a personal phone call where we will explain you the way to professional financial management of renewable energy projects:

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Notes

1 Bloomberg: Spending on Global Energy Transition Hits Record $500 Billion


About greenmatch

greenmatch is the leading web-based investment application for renewable energies. The highly flexible application models the complete financial project lifecycle of your wind, photovoltaic, hydro and biomass projects and optimizes your workflow. Its collaborative and integrative approach allows projects to be analyzed and executed more efficiently, comprehensibly and reliably. Our solutions empower project developers, investors and banks in making reliable decisions and in increasing the success of their transactions. greenmatch is an innovative model to limited traditional spreadsheet applications.

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