Scariest Renewable Risk: New Frontiers

The Scream, by Edvard Munch (1893)Renewable entrepreneurs are fearless and passionate about their projects but we have a “scary” register of risks that occasionally gets their knees knocking.

The concept is simple: find a spot where Mother Nature likes to get rough: strong winds, big waves or fast tides — the choice is yours. Then invent, design, conceive and build a device to harness the power – the bigger and more powerful the better without spending an amount similar to the euro zone bail out fund.

Once this stage is complete, wrap up the deal in multiple contract interfaces, find a heavy lift vessel and crew to install said kit, then pre-book a summer period of perfect installation weather: blue sky, calm seas and temperate wind. For the price of a couple of world class center forwards you can then dangle export cables and substations over the sides of vessels and repeat many times until your megawatts satisfaction is reached.

Add to that your 10 digits of capex in the P&L, some of it your equity and some debt, a dash of working capital to keep it maintained, a power guarantee, some warranties, some government incentives, a grid connection or two (I hope), a risk register and an insurance policy, then hang on tight and never let go!

This post was part of the special feature about Our Scariest Risks, published October 31, 2011. The feature also included these other risks:
Aerospace
Captive Insurance
China
D&O
Employee Benefits
Energy
Environmental Liability
ERM
Financial Services
FINEX
Global
Health Care
Middle East
Mining
Power
Real Estate
Reinsurance
Renewables
Supply Chain
Terrorism
Trade Credit

About Michael Buckle

Michael is an Executive Director of Global Markets and leads Willis' Renewable Energy practice. Based in London wit…
Categories: Energy

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