Greensolver, the independent wind and solar farm asset manager, and Newgreen, the industrial risk finance provider, have today launched GreenBoost – which is claimed to be the first product to protect wind farm owners against unstable returns by offering guarantees on both wind and turbine availability.
For infrastructure investors, wind energy projects are an attractive prospect, with proven technology, low and predictable costs and, in most countries, long-term power purchase agreements, supported by robust government incentive frameworks.
However, the financial risk involved in any wind energy investment is also evident. Wind is a highly volatile resource, with a direct and definitive impact on revenues. From one year to another, variation of wind can be as high as 30% and investors in many established markets have recently suffered the impact of low wind conditions.
Likewise, the reliable performance of a wind farm is highly dependent on the availability of wind turbines – complex electro-mechanical machinery requiring ongoing maintenance and constant monitoring. As the asset base expands and matures across Europe and the US, managing the availability of turbines is a growing task.
Combined, these challenges threaten the stability of long-term returns and can cause revenues to fluctuate significantly from business plan estimates.
GreenBoost® has been designed specifically to mitigate this financial impact. The service guarantees both wind and availability for a project for a period of 10 years.
In the eventuality of below-par turbine availability, GreenBoost® will pay the customer compensation equivalent to the shortfall. However, should availability exceed expectations, the customer will keep 100% of the upside.
Set up in 2008 by Guy Auger, Greensolver is an independent asset manager, providing technical and business services that enable developers and investors to maximise the value of their wind and solar farms
Auger, Chief Executive, Greensolver, said: “From an investor’s perspective, volatile and uncertain cash flows are far from ideal – particularly when wind projects form part of a low risk asset portfolio, where steady returns are critical”
“That’s why, faced with changing weather patterns and the challenge of maintaining complex equipment – and with a changing appetite for risk amongst investors – industry demand is growing for ways to safeguard and guarantee profitability in the long-term.”