Technical Due Diligence
Renewable Energy
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Technical Due Diligence for Renewable Energy Projects
When investing in or developing major energy projects, you need to understand and
mitigate all technical risks before you decide to commit.
The technical due diligence report can help you understand the technical feasibility of
your project with a full technical risk review.
Main sectors of interest:
 Photovoltaic
 Wind
 Biogas and Biomass
 Geothermal
 Hydroelectric
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Technical Due Diligence for Renewable Energy Projects
The Technical Due Diligence can definitely help you:
 Understand and mitigate a variety of technical and socio-environmental risks before
you commit your valuable time and resources to the project
 Identify technical risks that could compromise your project’s profitability and bankability
 Ensure that the technical feasibility of the project makes for a sound investment
 Ensure that all factors have been accounted for in the development process
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Technical Due Diligence for Renewable Energy Projects
Legal Frame for Renewables – National Regulatory
 Law no. 220/2008 regarding the promotion of renewable energy sources,
successively amended and supplemented by:
 Government Ordinance no. 29/2010
 Government Emergency Ordinance no. 88/2011
 Law no. 134/2012 for the approval of GEO 8011, amending and adjusting law
220/2008 8/2
 Law no. 123/2012 regarding electricity and gas
 Government Emergency Ordinance no. 57/2013 published in the Romanian
Official Gazette no. 335 dated 7 June 2013 which will enter into force on 1 July
2013 (“GEO 57”)
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Technical Due Diligence for Renewable Energy Projects
Incentive Scheme – Number of Green Certificates
On 4 June 2013, however, the Romanian Government approved by way of an Emergency
Ordinance new measures applicable to the RES sector as of 1 July 2013. The new
measures (described herein) aim at discouraging future investments in the renewables
sector, but they are also impacting operational investments, thus breaching investors’
legitimate expectations.
Temporary suspension of the number of GCs granted to certain technologies:
Starting with 1 July 2013, the issuance of a certain number of GCs will be deferred, as
follows:
 new hydro-power plants (below or at 10 MW): 1 GC deferred;
 wind: 1 GC deferred;
 photovoltaic: 2 GCs deferred.
The deferred GCs shall be recovered starting with March 2017 for new hydro-power
plants and solar, and with January 2018 for wind. The recovery of the deferred GCs will be
done in steps, according to a methodology to be adopted by the regulator.
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Technical Due Diligence for Renewable Energy Projects
THE PROJECT
The Sponsor
The Bank
The developer of the Project
The project submitted for funding or re-funding
The technical advisor - understand the technical feasibility of your
project with a full technical risk review
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Our Area of Expertise on Renewable Energy Projects
The Due Diligence analysis is carried out taking into account all the relevant
factors that might influence the project, and providing any practical
suggestions to render the relevant Project bankable, according to the applicable
Scope of Work.
Normally, two phases are identified:
 Pre-closing Phase: Due-Diligences are based on documentation provided by
means of a comprehensive checklist and on-site surveys for site feasibility
assessment. Due-Diligence activity includes site assessment, design review
(including quality check of proposed components), authorization check,
productibility/cash flow calculations, contract analysis (EPC, O&M)
 Post-closing Phase: Construction Monitoring Reports, including supervision of
work management construction and Acceptance Tests; Operation & Maintenance
monitoring to assure the design performance
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Our Area of Expertise on Renewable Energy Projects
Main issues with impact on projects’ bankability
Legal riskRegulatory
• Changes in Legislation
• Projects over the installed capacity
Market risk
• Off–take contracts
• Dispatching risk
Development
risk
• Permitting process
• Limited grid capacity
Operational
risk
• Inexperienced local operators
• Few international players with limited track record on local market
Revenue risk
• Prices predictability [energy and green certificates]
• Green certificate price
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Our Area of Expertise on Renewable Energy Projects
Main issues with impact on projects’ bankability
Risks- checks to be done
Conclusions
Observations
Authorizations
The permitting procedure appears to have
been followed correctly and in partnership
with the local authorities.
Documentation was made available.
Location/Land
The location has good access and good
connection to the grid
Location has good potential
Components type
The components are to be considered of
adequate quality and performance for the
design of the project.
Project was developed in partnership with
the local authorities.
Connection
The connection is a sound and accessible
one.
The connection solution is a sound and
accessible one.
Electrical and power estimate
The outcome of the power data
assessment is aligned with expectation, on
the basis of the design documentation
No major investment is required to connect
the project.
Scheduling
The project appears to be technically,
economically and financially feasible.
Project scheduling was streamlined. A legal
due diligence could confirm inaccuracies.
On a documental basis, no critical issues that could affect the construction of the
plant have been identified.
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Our Experience – Due Diligence Reports for Romanian
Banks and Investors
Project: Wind Farm 27,5 MW Nalbant, Tulcea County, Romania
Status: Ready to build
Reports: Preliminary Due Diligence Report and Independent Engineer
Report
Project: 4 Hydro Plants Boia, Romania
Status: Ready to build
Reports: Preliminary Due Diligence Report and
Independent Engineer Report
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Our Experience – Due Diligence Reports for Romanian
Banks and Investors
Project: Wind Farm 27,5 MW Nalbant, Tulcea County Romania
WTG
Nr.
T1
T2
T3
T5
T7
Project
Type
GE2.75
GE2.75
GE2.75
GE2.75
GE2.75
Power Diam.
(MW)
(m)
2.75
103
2.75
103
2.75
103
2.75
103
2.75
103
13.75
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Hub V average Gross Prod. Wake Losses Tec. Losses Energy Yield (AEP) Full load h Capacity
(m)
(m/s)
(MWh/y)
(%)
(%)
(MWh/y)
Factor
98.5
6.94
8 645
3.94
8.0
7 613
2 768
0.32
98.5
7.02
8 804
5.84
8.0
7 586
2 759
0.31
98.5
7.46
9 683
4.41
8.0
8 481
3 084
0.35
98.5
7.33
9 302
7.25
8.0
7 884
2 867
0.33
98.5
6.74
8 063
9.31
8.0
6 667
2 424
0.28
7.10
44 497
6.15
8.00
38 231
2 780
0.32
Contact
DELIA RAUCESCU
d.raucescu@optimpm.com
+40 737 012 555
25A Emanoil Porumbaru Street
3rd floor
Bucharest, Romania
www.optimpm.com