The future is green with BPE
PUBLISHED: 12:07 03 March 2014 | UPDATED: 12:08 03 March 2014
Green technology is no longer a niche, high cost source of energy. With increasing pressure on the land and agricultural sectors, renewable energy projects are an attractive option.
The renewables team at BPE work with green energy technology specialists in natural resources including wind, solar, biomass and anaerobic digestion. With new technological breakthroughs emerging all the time, BPE is able to provide strategic advice and risk management, from advising on contract terms, negotiating with lawyers and de-risking a project as much as possible, to putting together financial drivers and bringing deals to the table. With emerging processes and updates to ‘next generation’ technology, it can be difficult to maintain contractual certainty. Not addressing certain factors early can cause expensive and time consuming disputes. The investment fundamentals of solar development are sound – with low technology risk and revenue streams underpinned by legislation. The established generation profile of solar installations coupled with the indexed linked tariffs (and power purchase prices), means that expected revenue is predictable over the lifetime of each project and hedged against inflation.
Generally, low risk technology equals low maintenance costs and trading risk. PV panels have an operating life in excess of 20 years, and once installed require limited maintenance. Once operating, the owner can sell the electricity generated.
The feasibility of any renewable energy project is determined by grid connection and capacity – with network capacity in short supply this needs to be considered at the outset. Roof mounted PV installations generally benefit from lower grid connection cost with agricultural/industrial sites usually benefiting from good on site capacity. Roof mounted installations can be fast tracked as planning permission is not generally required here. Ground mounted PV installations do require planning permission and typically upgrades to the existing grid connection. This can be counterbalanced by the economies resulting from increased scalability and panel “tilt” optimisation.
“Many clients are looking to sell on to an investment or pension fund. We understand what makes a deal investable,” says BPE’s Tim Williams. “In short we look to the end game right at the start.” n
To contact Jon Close or Tim Williams at BPE’s renewables team please call 01242 224433 or visit www.bpe.co.uk
What to look out for:
• Make sure that the procurement route is one that a funder understands. If the contractual structure looks overly complicated, it probably is.
• Ensure the contractual procurement route is fit for what is being achieved. For instance, a solar project in a field may be procured using a more engineering focussed contract than a roof-top installation.
• Have the right team of professionals around you so that you are fully appraised early on as to the project risks
Anaerobic digestion schemes
If you have a constant supply of livestock, you might want to consider an anaerobic digestion scheme where microorganisms break down biodegradable material to produce biogas and a nutrient rich fertiliser.
• What is the scope of the installation? Does it simply involve the installation of the digester or necessary civil engineering works
• Consider the timeline from initial feasibility to health and safety approvals. It will take longer than you think.
• Make sure contracts are rigorous as to what constitutes the digester’s performance and the testing and commissioning criteria before you take responsibility for it.
“Not many legal firms of our size have a dedicated and experienced renewables team,” says BPE’s Jon Close. “We’ve built a reputation for helping de-risk potentially difficult projects.”
This article is from the March 2014 issue of Business & Professional Life