New breed of renewable players emerging

- A new class of investors in the renewable energy sector is emerging, who could bring increased competition in the race to secure project finance, the renewable services director at consultancy WSP Environment and Energy said.

"Real estate players, logistics companies and infrastructure owners are a new class of market players — entities that have suffered from the recession massively," Isabel Boira-Segarra told Reuters at a conference on renewable energy funding.

Such players see entering the renewable energy sector as a way of maximizing their assets after the financial crisis hit their core businesses. However, to do so effectively, they will need a change in culture, Boira-Segarra said.

"To really grasp this opportunity they need to realize this is not quite the same as what they already do and put the right schemes in place. Otherwise we run the risk of ending up with a lot of small-scale renewables that don't work."

In particular, these companies are targeting photovoltaic solar, anaerobic digestion and small-scale wind projects, which they are able to integrate easily into their core business.

"Before, if you had land you would develop it for property. Now, if you have land you are holding it for 10 to 15 years and wondering what to do with it in between," she said.

These smaller players could represent less risk for some investors and bring more competition in the race to secure sparse project finance.

Lenders became risk averse following the global financial crisis and a lot of available capital dried up. Finance is gradually becoming more available on the market, but investors want secure returns.

"If done properly, the nature of these projects should be really attractive to some investors because you get decent returns and some of the off-take risk disappears," Boira-Segarra said.

Partnerships between small players and more established ones like utilities could also emerge. "You reduce the risk and share the assets the projects produce, she added.

The consultant said it was difficult to say how big a share of the market such players could achieve but the British government expected the medium to small-scale market to contribute 2 percent to its renewables target.

The UK has a target to source 15 percent of electricity from renewable energy by 2020.

Related News

Can COVID-19 accelerate funding for access to electricity?

UGANDA - The time frame from final funding approval to disbursement can be the most painful part of any financing process, and the access-to-electricity sector is not spared.

Amid the global spread of the coronavirus over the last few weeks, there have been several funding pledges to promote access to electricity in Africa. In March, the African Development Bank and other partners committed $160 million for the Facility for Energy Inclusion to boost electricity connectivity in Africa through small-scale solar systems and minigrids. Similarly, the Export-Import Bank of the United States allocated $91.5 million for rural electrification in Senegal.

Rockefeller chief wants…

READ MORE
Manitoba Hydro applying for 5 per cent interim rate increase

Consumers Coalition wants Manitoba Hydro?s proposed rate increase rejected

READ MORE

Why rolling back European electricity prices is tougher than appears

READ MORE

Georgia Power warns customers of scams during pandemic

READ MORE

iran electricity protests

Electricity blackouts spark protests in Iranian cities

READ MORE