Risk Based Business Planning
Risk Based Business Plan Guideline
- Client
- International Energy Agency
- Country
- Italy
- Year
- 2009-2010
- Industry
- Renewables
- Service
- Risk Management
Renewable energy projects need to quantify and manage their risks to obtain financing at a reasonable cost. For the International Energy Agency, kwantis defined a transparent, reproducible way to assess their risk/return profile, with renewable-specific risk management guidelines.
The challenge
In renewable energy projects, a key challenge in obtaining financing at a reasonable cost is the ability to quantify and manage the different elements of risk: organizational, political, technical and commercial.
The project aimed to:
- Define a transparent and reproducible set of techniques to assess the risk/return profile of renewable energy investments.
- Develop guidelines specific to renewable energy for the classification, assessment and management of the risk elements involved in project evaluation.
Our approach
Conventional energy projects have been developing and refining risk assessment methodologies for many years. An initial benchmark of these methodologies gave the lessons learnt to transfer to renewable energy projects.
On that basis, a risk management methodology was built specifically for renewable energy projects, in six steps:
- Project definition and requirements
- Risk identification
- Risk evaluation
- Risk control
- Risk follow-up
- Risk feedback
The outcome
The guideline was applied to two real case studies:
- A 2930 MWp photovoltaic plant in Spain
- A 400 MWp offshore wind plant in the Netherlands
Both analyses involved all the stakeholders of a typical renewable energy project: financial institutions, project sponsors, technicians, regulators and NGOs.
