Strategic investments are shifting to equity stakes in companies, rather than assets. This brings a different risk profile, and a move from structured deals around projects towards portfolio thinking and building robust project investment pipelines.
During the last two years multiple platform transactions and direct investments in developers have closed. With the expected growth in renewable power generation combined with the high-power prices, DNV expects many more to come. Investors are actively taking a portfolio approach, combining different asset classes, offtake agreements and geographies in one platform to balance risk, cashflows and the needed returns.
As predicted in our Energy Transition Outlook from today to 2050 DNV foresees a 16-fold increase in global renewable energy generation capacity, and subsequently a two- and four-fold increase in the need for flexibility, which will drive the need for energy storage capacity. Not to mention the enormous build-out foreseen in the North Sea of offshore wind coming years, further accelerated by the renewed focus on energy security.
With this as a backdrop, how do you value a pipeline? How do you deal with the uncertainties inevitably correlated to the development phase? How likely is it to expand successfully to other markets and/ or technologies with different characteristics? What additional value, and risks, do investors see with this change of investment strategy?
In this one-hour panel debate we will discuss the financing challenges and opportunities in development platforms, focusing on how to value a pipeline of projects, and how risks can be mitigated by combining different assets into one company.