Energy infrastructure is currently in the spotlight of investment strategies. The unstoppable move towards a low-carbon production model and the increasing involvement of oil and gas companies in green power generation projects are putting the energy infrastructure sector at the forefront of investment strategies. The renewable energy sector is the alternative with the greatest potential to attract investment.
The decarbonisation plans of the different governments and the need to promote strategies and plans that help to improve the environment and the fight against climate change have put investment in renewable energy projects in the spotlight. This segment has become one of the most relevant in terms of its activity and economic development, which is why it is expected that many corporate operations will be activated in this area. In this regard, Gesvalt has led and developed a great deal of experience in advising on energy projects in recent years.
His experience in this field ranges from advice and valuation in acquisition or divestment processes in the energy segment, including the valuation of wind farms, photovoltaic and cogeneration plants for leading renewable energy companies such as BP Solar, Siemens Gamesa and Forestalia, among others.
These projects have allowed the company to gain in-depth knowledge of the relevance of assets related to renewable energies, supporting clients in the assessment and valuation of assets when making an investment.
Why are renewable energies attracting investor interest?
Some of the key elements that Gesvalt, as experts in consultancy and valuation for energy projects, points out are the following:
ESG investment policies
ESG criteria (environmental, sustainable and good governance) are undoubtedly present when planning and implementing an investment strategy. In order to adapt to these premises, companies are establishing measures against climate change, the strengthening of recycling and the circular economy, as well as those aimed at promoting sustainable mobility and thus making the energy transition possible.
In addition, investors' search for socially responsible assets to add to their portfolios, together with the good performance of this type of sustainable products during 2020, is also determining the weight of ESG criteria in investment strategies.
European Green Pact
The EU's commitment to achieve climate neutrality by 2050 is aimed at changing the old continent's energy habits.
Measures accompanying this policy include diversifying energy sources, ensuring energy security, improving energy efficiency, reducing import dependence, reducing emissions, decarbonising the economy, promoting research into clean energy technologies and those that contribute to reducing carbon emissions, among others.
Investment diversification
Investors and funds are always keen to scour the asset market to diversify their clients' portfolios, and in this context renewable energies have become a very good opportunity.
Oil majors are also entering the clean energy sector with the development of cogeneration, wind and solar projects.
Returns on investment
Renewable energy assets look set to continue to experience increased investor demand. Long-term return prospects, stable and predictable cash flow, social pressure for cleaner energy from younger generations and the desire to participate in more responsible investments are among the main reasons for this momentum.
Increased public awareness and pressure from millennials
Public awareness of where energy comes from and how to use it efficiently has increased, as has pressure from millennials to demand clean energy. With the long-term threat of climate change at the centre of public attention and on the agenda of governments, the deployment of clean energy adds to the demands for action needed to combat climate change.
Favourable climatic and orographic conditions in Europe
The climatic and orographic conditions of each country determine the potential and the most profitable type of renewable energy installation. Because of the number of hours of sunshine per year, southern Europe has deployed solar energy, while the north of the continent, where wind prevails, has opted for offshore and onshore wind energy.
Attractive fiscal policies
Financing green energy projects will contribute to meeting the Paris Agreement and the necessary decarbonisation of the economy. Clean energy assets are more amenable to government subsidies, and will therefore further increase their financial viability.
Supportive actions by governments will help to expand new technologies, not only in production but also in storage.
Technology development
Renewable energies are inexhaustible. Technological advances in recent decades have considerably reduced the production and maintenance costs of wind and solar power plants and have shortened the amortisation times of the installations, increasing the competitiveness of clean energies compared to fossil and nuclear fuels.
Gesvalt's experience in the energy sector
We are at a special moment where governments, investors, energy companies and specialist managers working together could show the way to a greener and more sustainable future.
In addition to consultancy and valuation services in investment and divestment processes in this field, as well as the valuation of renewable energy infrastructures, Gesvalt advises, as an independent expert, energy generating companies, distributors, engineering companies and manufacturers of components and equipment.
It works for both the oil and gas and renewable energy, solar, wind, hydro and cogeneration sectors.
He carries out industrial valuations in refinancing operations, in PPA (Purchase Price Allocation) processes, valuation of brands, companies and real rights and in improving the conditions of property damage policies, avoiding possible underinsurance.
Gesvalt's role in sale and purchase processes has been and continues to be key in many operations, with its opinion serving as a basis for negotiation and decision making.