Renewable Asset Management: Solutions for Growth

Renewable energy is revolutionizing the global energy markets; in fact, in some regions, renewables are growing so quickly that they are the leading source of new generating capacity. As a larger and broader group of investors embrace renewables and incorporate them into their portfolios, they expect these assets to be well-managed, generating a steady financial return. Many of these new investors are not investing because they are “green”; they are doing so because of the attractive yields offered by these assets. As a result, developers and project managers should expect an increasing level of scrutiny from these new investors, requiring them to take a closer look at how they manage O&M (operations and maintenance) in the field as well as how they deal with asset management in the office.

With an expanding network of potentially diverse assets, keeping track of all the activities needed to manage a growing and diverse renewable portfolio is no small task. While some companies have well-honed in-house asset management capabilities, that seems to be the exception. In response, the asset management industry is steadily evolving to support the industry and address the main challenges it is facing.

At PwC, we firmly believe that having a structured approach to identifying problems and resolving issues is important at the onset, as operational issues almost always become exacerbated as the business grows. Companies are often hindered by increasing operations and maintenance costs, multiple systems for data and asset monitoring and settlement, and billing and reporting processes that are not integrated across the portfolio. All of this can lead to crunches at financial close and a risk of restatements, not to mention potential cyber threats.

A few months ago, we published YieldCo – moving beyond the IPO: Solutions to get serious about asset management. While that paper was written for the YieldCo industry, the same lessons apply to the broader renewable energy industry. As the industry continues to scale, effective tools and strategies to manage the aforementioned challenges are critical. In addition to improving performance and competitive positioning, controlling costs and improving portfolio efficiency will likely be rewarded in other ways, such as having access to a lower cost of capital or a broader group of investors.

ACORE’s upcoming webinar, Strategies and Insights on Effective Renewable Energy Asset Management – Tools to Manage Accelerating Growth, will focus on concrete solutions for managing these real-world asset management challenges. I will be moderating a discussion of leaders from some of the largest renewable energy generation portfolio companies as well as service providers with gigawatts of assets under management. We are hoping that portfolio operators, large and small, as well as investors will join us on Wednesday February 24th at 9am PT / 12pm ET. More information on the webinar as well as registration can be found here.

EDITOR’S NOTE: This guest blog was written by ACORE Member PricewatehouseCoopers.