Uncertain times for small windfarm owners

This BVP Investments article is written by Ray O’Neill.

Nothing changes. Everything changes. This seems to the moto for wind farms, especially when it comes to their valuations. Wind farms as an asset class are supposed to be “set and forget”, as in you do your homework upfront on the wind resource, capital costs, finance and offtake and, with the rules of the game known for the 25 years, forget about the project to a large degree. But over time we have come to expect this NOT to be the case.

Valuations of windfarms in today’s market are impacted by several new, and sometimes complex, market, regulatory and other unforeseen changes. We’ve a laundry list not of known and future costs to small wind farms including rate increases, REFIT changes, a new market in i-SEM with new costs coming with balancing risks and trading strategies, and that’s on top of suppressed whole sale prices, limited historical inflation and changes coming down stream for de minimis projects. Read more by download the PDF