D 5.1
Preparation and implementation of SWOT Analysis
RuralE.Evolution
Public-Private Partnerships for RES Agro-energy districts
Issued by: Intercoop
Perugia, January 2011
CONTRACT N°:IEE/07/579/SI2.499063
Project funded by the European
Community under the executive
agency for competitiveness &
innovation (EACI)
INDEX
Chapter 1
Introduction
3
Chapter 2
Italy
6
2.1
Target area characterization
6
2.2
PPP implementation
7
2.3
Contract redaction
8
Greece
9
3.1
Target area characterization
9
3.2
PPP implementation
10
3.3
Contract redaction
10
Hungary
11
4.1
Target area characterization
11
4.2
PPP implementation
11
4.3
Contract redaction
12
Portugal
13
5.1
Target area characterization
13
5.2
PPP implementation
13
5.3
Contract redaction
14
Spain
16
6.1
Target area characterization
16
6.2
PPP implementation
16
6.3
Contract redaction
17
Chapter 3
Chapter 4
Chapter 5
Chapter 6
2
1. INTRODUCTION
SWOT analysis is an analytical method which is used to identify and categorise
significant internal (Strengths and Weaknesses) and external (Opportunities and
Threats) factors faced either in a particular arena, such as an organisation, or a territory,
such as a region, nation, or city.
It provides information that is helpful in matching the firms' resources and capabilities
to the competitive environment in which it operates and is therefore an important
contribution to the strategic planning process.
It should not be viewed as a static method with emphasis solely on its output, but should
be used as a dynamic part of the management and business development process.
SWOT analysis involves the collection and portrayal of information about internal and
external factors that have, or may have, an impact on the evolution of an organisation or
business. It generally provides a list of an organisation's Strengths and Weaknesses as
indicated by an analysis of its resources and capabilities, plus a list of the Threats and
Opportunities identified by an analysis of its environment. Strategic logic requires that
the future pattern of actions to be taken should match strengths with opportunities ward
off threats and seek to overcome weaknesses.
SWOT analysis is not necessarily a Foresight approach but can be a good starting point
for the discussions in Foresight. Another possibility is matching your own strengths and
weaknesses against different Foresight results. The different viewpoints can be a
starting point for a discussion of the real threats and opportunities.
For those who want to improve the competitiveness of a company, region or country.
People directly involved in various hierarchical levels of decision making in an
organisation or business, or a wider sample of actors if the SWOT analysis concerns a
whole region or nation. Representatives from a variety of stakeholders groups should be
involved, as they would bring in the analysis their own particular perspectives. At least
one expert in SWOT analysis should take part or moderate the process.
Drawing up Opportunity and Threat matrices encourages an assessment of the likely
probability and impact any factor may have on the organisation. A scoring system can
be used to assign importance to factors. A factor with a high score on both 'probability
of occurrence' and 'likely impact on the organisation or business', would have to be one
worthy of close attention and play a significant part in the development of a strategic
plan. Similarly, Strengths and Weaknesses can be assessed against a scoring system that
allows the factors to be identified according to their significance (i.e. major, minor,
neutral) and level of importance (high, medium, low).
It is possible to represent this analysis in a Performance-Importance matrix that
highlights those factors which are both important and in which performance of the
organisation/ business is low. It is towards these factors that strategy should be
addressed.
To be more specific, the set of questions that needs to be answered should be similar to
the following:
 What are your advantages?
 What do you do well?
 What relevant resources do you have access to?
 What do other people see as your strengths?
Consider this from your own point of view and from the point of view of the people you
deal with. Don't be modest. Be realistic. If you are having any difficulty with this, try
writing down a list of your organisation's characteristics. Some of these will hopefully
be strengths!
3
In looking at your strengths, think about them in relation to your competitors - for
example, if all your competitors provide high quality products, then a high quality
production process is not a strength in the market, it is a necessity.
 What could you improve?
 What do you do badly?
 What should you avoid?
Again, consider this from an internal and external viewpoint: Do other people seem to
perceive weaknesses that you do not see? Are your competitors doing any better than
you? It is best to be realistic now, and face any unpleasant truths as soon as possible.
 Where are the good opportunities in front of you?
 What are the interesting trends you are aware of?
Useful opportunities can come from such things as:
 Changes in technology and markets on both a broad and narrow scale
 Changes in government policy related to your field
 Changes in social patterns, population profiles, lifestyles, etc.
 Local Events
A useful approach to looking at opportunities is to look at your strengths and ask
yourself whether these open up any opportunities. Alternatively, look at your
weaknesses and ask yourself whether you could open up opportunities by eliminating
them.
 What obstacles do you face?
 What is your competition doing?
 Are the required specifications for your job, products or services changing?
 Is changing technology threatening your position?
 Do you have bad debt or cash-flow problems?
 Could any of your weaknesses seriously threaten your business?
Carrying out this analysis will often be illuminating - both in terms of pointing out what
needs to be done, and in putting problems into perspective.
A SWOT analysis is based on hard facts. These can be time-consuming and costly to
gather.
People are needed who have a good knowledge of the sector, region, area or country,
etc. under analysis in the specific exercise.
The main tangible output is a matrix presenting the most important strengths,
weaknesses, opportunities and threats for the area, sector, region, country examined and
aiming at giving a reasonable overview of major issues that can be taken into account
when subsequently drawing up strategic plans for an organisation.
The success of this method is mainly owed to its simplicity and its flexibility. Its
implementation does not require technical knowledge and skills. SWOT analysis allows
the synthesis and integration of various types of information which are generally known
but still makes it possible to organise and synthesise recent information as well.
It is worth pointing out that whereas SWOT analysis is often not seen strictly speaking
as a Foresight method, it is fruitful to consider it from this perspective. Indeed,
Foresight is particularly useful for addressing the OT dimensions, whereas SWOT
analyses often fail because of poor examination of OT (opportunities and threats).
A correlation is made between the internal factors, strengths and weaknesses of the
organisation, and the external factors, opportunities and threats. An effort can be made
to exploit opportunities and overcome weaknesses and at the same time for the
organisation to protect itself from the threats of the external environment through the
development of contingency plans.
The most common drawbacks of SWOT analysis are:
4

The length of the lists of factors that have to be taken into account in the
analysis;
 Lack of prioritisation of factors, there being no requirement for their
classification and evaluation;
 No suggestions for solving disagreements;
 No obligation to verify statements or aspects based on the data or the analysis;
 Analysis only at a single level (not multi-level analysis);
 No rational correlation with the implementation phases of the exercise.
Moreover, there are risks of:
 Inadequate definition of factors;
 Over-subjectivity in the generation of factors (compiler bias);
 The use of ambiguous and vague words and phrases
One has to be aware that this method is very commonly used by consulting firms and
that for this reason some people in the public/quasi-public sector have an aversion to it.
A SWOT analysis could be performed in other contexts than those of an organisation,
for instance in the case of an individual facing major decisions such as professional
orientation.
The brainstorming technique can be used within this method.
SWOT analysis can be used prior to scenario building to highlight some important
factors, prior to a Delphi survey to help focus the questionnaire.
"Is it for me?" - Checklist
You should use SWOT analysis if:
 You need to identify the strengths and weaknesses of your organisation, sector,
area, region, country, etc;
 You need to identify what are the main threats and opportunities faced by your
your organisation, sector, area, region, country, etc;
 You need to decide what are the most appropriate methods and tools to be used
for the implementation of a foresight exercise.
SWOT analysis is a framework for analysing your strengths and weaknesses, and the
opportunities and threats you face.
This will help you to focus on your strengths, minimise weaknesses, and take the
greatest possible advantage of opportunities available.
5
2. ITALY
2.1. Target area characterization
Table 2.1: Target Area SWOT Analysis
STRENGHTS
There are always statistics available about
the target area main characteristics
The identification of potential actors is
easier if there is some collaboration with
farmers organizations (ex. Coldiretti)
Biomass availability study have been
already realized and are available in the
Literature (es. European projects BEE and
CEUBIOM etc.)
WEAKNESSES
The coefficient used to estimate biomass
production are not always updated and
reliable
The study of area characteristics may
require time and imply elevated costs
The area potential production is not the
same of the real production
The communication campaign could be
difficult to realize if there is few interest
from the population and the industrial
sector
It is difficult to have detailed information
about the energy sinks
There are few examples of agro-energy
districts working
OPPORTUNITIES
THREATS
There are in the area great quantities of
It is difficult to find local legislation about
not used residual biomasses (ex. Prunings) PPPs
Some innovative instrumentation has been The harvest or collection of biomass is
developed to describe the biomass
very expensive
potential of an area through the use of
Geographical Information Systems.
The identification of key actors and
The individuation of the right conversion
stakeholders was made easier by the fact
technology to transform biomass into
that already in other projects (ex. BEN)
energy has to be done with accurate
networks of biomass enterprises in the
analysis.
Umbria region have been already
developed
There
are
some
technologies The tendering procedure for the
commercially available to produce energy individuation of the partners is very
from biomasses (ex. Biogas, vegetable important.
oils fed in an internal combustion engine
etc.)
Biomass production shall be proportional
to the demand of energy
6
2.2 PPP implementation
Table 2.2: PPP implementation SWOT Analysis
STRENGHTS
WEAKNESSES
The feasibility study can use a plenty of
It is difficult to find local legislation about
data available on the web.
PPPs
The tender procedure is standardized and
It is difficult to get connections with the
always the same
charged bodies that deal with PPP design
and legal consultancy
The economic feasibility of the project
Most of the times banks have not yet
can be estimated using also adequate
developed financial products to be used to
software
promote the production of energy from
biomasses
The
Public
Private
Partnership The tendering procedure is of fundamenta
organization will reduce the risk importance for the exit of the partners
connected with the business model for the search
private
The promotion of a bioenergy project in a
municipal area requires numerous meeting
with the population to explain better
advantages and disadvantages of this kind
of new energy source
PPPs budget in the agroenergy secor is
quite low.
OPPORTUNITIES
THREATS
All the PPPs schemes push toward a
It can be difficult to find all the prices for
reduction for the risk for privates
the investment and operating costs linked
with the functioning of the plant
The competition among private bidders
The selection of the public partner has to
will produce lower costs for the service
be based on clear motivations
for the public counterpart
To evaluate the investment costs a
The selection of the private partners has to
detailed analysis of the conversion
be based on clear motivations
technologies available on the market has
to be made
The communication campaign can be very
expensive and not useful
The public private partnership could
require the case of forming a new
participated society that will contain
public and private members.
Banks loans are very difficult to obtain
and are interested by very restrictive
conditions
7
2.3 Contract redaction
Table 2.3: Contract redaction SWOT Analysis
STRENGHTS
WEAKNESSES
The contract is the fundamental In the agroenergy district most of the
instrument that will regulate all the times more than one contract is required
relationships between the partners of the
PPP
Often it is possible to have a concession
It is possible to have sub-tenders besides
type of contract
the concessionaire
There are some sample contracts available It is possible that the Municipality will
on the web
recur to more than one raw biomass
producer (ex. Consortium)
Very few contract are available at the
moment related to PPP in the agroenergy
sector
No contract template could be used
without any adaptation to the practical
case
OPPORTUNITIES
THREATS
The contract will defend public needs and Biomass raw material contract has to be
interests and grant good conditions of
granted for the whole duration of the
service by the concessionaire
project.
The contract has to protect the end user’s
The contract has to be joined with
interests and public interests also
financial and economical, but also
technical documentation
Land acquisition has to be taken into
The more the agroenergy district is
account
integrated and composed by a greater
number of bioenergy chains, the more
complex will be contract organization.
The connection to the electrical grid has to
be taken into account
8
3. GREECE
3.1. Target area characterization
Table 3.1: Target Area SWOT Analysis
STRENGHTS
WEAKNESSES
RES potential (eg. Solar radiation, Lack of renewable energies resources as
biomass, residues etc.)
raw material
High
biomass
availability
from Few renewable energies applications in
agricultural and agro-forest residues due the area
to the extensive agricultural land
Zootechnical and food industry residues Agricultural land divided in many small
also exist
parts, e.g. many land owners, therefore: a
common
initiative
is
absolutely
necessary, there are high harvesting and
transportation costs;
Opportunity costs of some residues (i.e.
with market price);
Equipment to collect some types of
residues not in place.
Easy to collect most residues from the
fields
Strong will from principal stakeholders to
proceed with the scheme
OPPORTUNITIES
Secured tariff for renewable energies
THREATS
Excessive dependency on fossil fuels (eg.
Lignite).
Existence of areas suitable of taking
measures
Energy efficiency in buildings is not an
obligation yet
Suitable climate for bioclimatic
applications
The scheme will offer an alternative
income to farmers
External energy dependency will decrease
for owners
9
3.2 PPP implementation
Table 3.2: PPP implementation SWOT Analysis
STRENGHTS
WEAKNESSES
Existence of Energy Management Agency Insufficient infrastructure for renewable
energy use (eg. Injection of biomethane
into the natural gas grid)
Research and Development in renewable
Low sensitiveness to energy savings
energies issues
High value of natural heritage, favoring
Low public awareness
the development of clean energies
OPPORTUNITIES
THREATS
Easy connection to the PPC network
Funds to invest in clean technologies
Lack of capacity and resources at regional
and local level
Liberalization of electricity market
High bureaucracy of small-scale PPP
approval
Private investors
Lack of safe biomass supply in long term
Public investors and/or facilitators
Unbalanced risk amongst partners
Environmental benefits do exist
Changing of the motivation of potential
partners
Law 3851/2010 offers a guaranteed
Changing of the economic circumstances
income of 230€/MWh for 20 years
Changing in the legal frame
Changing of local/national political
situation
3.3 Contract redaction
Table 3.3: Contract redaction SWOT Analysis
STRENGHTS
WEAKNESSES
Previous
existing
Private-Public No feed-in-law for thermal applications
Partnership culture at local level
Existence of Energy market
No incentives at a local level
Absence of a local or regional Energy
plan
OPPORTUNITIES
THREATS
Local, regional, national subsidies Reactions and suspicious to renewable
incentives
energies applications
Country commitments
Unwillingness to change
10
4. HUNGARY
4.1. Target area characterization
Table 4.1: Target Area SWOT Analysis
Strengths
the importance of agriculture in the incomes
of local inhabitans
strong willingness to utilise the agricultural
residues (winegrape cutting etc.)
openess to collaborate with surrounding
settlements
clear vision to the benefits from creating jobs
willingness to create more clean settlement
good collaboration amongst the local
authorities of the area
good relation of local authorities with the
Mátra Power Plant
Opportunities
Weaknesses
lack of capital to the invest a local power
plant
historical revulsion related to farmers’
collaboration
existing alternative utilisation of own
agricultural residues
general legal conditions of PPP
limited preference of utilisation of RES
in Hungary
Threats
4.2 PPP implementation
Table 4.2: PPP implementation SWOT Analysis
Strengths
Weaknesses
existing team of Power Plant providing lack of experienced team to the financing
technical support to the planning
of PPP
committed partners in recovery of agricultural overloaded staff in the office of the
residues
municipality both to the planning,
existing solid market from biomass till implementation and monitoring as well
electricity
lack of information concerning the local
solid scientifically elaborated analysis related energy demands
agricultural capacity of target area
bank worries related to the investments of
due to existing technology within the Power municipalities
Plant clear terms of reference to the activity
existing areas owned by local authorities to
their planned activity
good co-operation of RuralE.Evolution changing of the governmental politicy
partners with local authorities
related PPP construction
good scientific advisory teams in the underestimation of the risks due to strong
environment of the target area to prepare the commitment
detailed business plan
Opportunities
Threats
11
4.3 Contract redaction
Table 4.3: Contract redaction SWOT Analysis
Strengths
Weaknesses
clear distribution of obligation amongst lack of experience in PPP legislation
partners
not sufficiently detailed business plan
strong willingness of partners to co-operate
changing legal conditions
due to trucks within the former large PPP
contracts bad social image of PPP-s
Opportunities
Threats
12
5. PORTUGAL
5.1. Target area characterization
Target area characterization (i.e. target area characteristics, identification of area's
needs, market testing, identification of potential actors, communication campaign to
reach stakeholders etc.);
Table 5.1: Target Area SWOT Analysis
Strengths
Weaknesses
Availability of biomass (Pomace) Strong
production organization of (union of
cooperatives), ensuring the supply of biomass
Growing awareness of the importance of
renewables, enhanced with oil prices increases
and favorable energy policy
Lower heating value than other
fuels
Lack of clarification of the tariff
Difficult connection points’
assignment for agricultural biomass
usage
Public support for renewable energy production
Increased availability of biomass, given the
increase in area under olive trees planted in
Alentejo
Potential for the concentration of pomace
Reduced risk of contamination of soil and water
resources for the collection and local utilization of
pomace
Data knowledge of the availability of pomace oil
for energy (biomass), duly typed on their
geographical location
Reduction on energy imports’ national
dependence
Opportunities
Competition at the market level of
the various alternative energy
sources
Lack of information circuits that
establish policies, incentives,
technology for the usage of biomass
Undeveloped state of applicable
technology, often involving a high
initial investment, ongoing
maintenance and high cost of
obtaining raw material
Threats
5.2 PPP implementation
PPP implementation (i.e. set up of the planning team, selection of suitable partners,
development of the business plan, implementation of a consensus building strategy,
etc.);
13
Table 5.2: PPP implementation SWOT Analysis
Strengths
Weaknesses
Importance of the union of
Need for high investment
cooperatives, UCASUL, in the town High cost to connect to the national electrical
of Alvito and strong connection to
grid
City Hall
Lack of coordination between the Ministries of
Economy and Agriculture to define the national
strategy to be adopted within the agricultural
use of biomass for energy production
Development of rural areas,
Long and bureaucratic process to get the point
maintaining and creating jobs,
of attachment to the national electrical grid
against the risk of land abandonment
Progress in the organization of the
olive sector
Opportunities
Threats
5.3 Contract redaction
Two critical issues were identified in the contract redaction. First the risk of failure in
the supply of biomass, the pomace after the extraction of the oil (UCASUL will supply
the biomass to the consortium, but how will be shared the risk of fail the production in
any year). The second is how to price the biomass, considering the market. This
biomass has a price in the market, and should be made the price of supply it to the
consortium, should follow the market for this biomass, should be linked to the tariff, or
should be linked to other kind of fuel.
Table 5.3: Biomass supply contract redaction SWOT Analysis
Strengths
Weaknesses
Strength of the sector to ensure
The availability of biomass depends not
availability of biomass
only on the union of cooperatives
Good soil and climate conditions for the
(UCASUL) but also on the producers of
production of olive oil in the area.
olives, cooperatives and other mills
Increasing production in the area.
producing olive oil, which are affected by
markets or climate reasons
Possibility of sharing the risk of failure in
the supply of biomass with partner
Opportunities
Volatility of markets and the risk of
climate change that could jeopardize the
availability of biomass
Threats
14
Table 5.4: Price of biomass contract redaction SWOT Analysis
Strengths
Weaknesses
Price of biomass in the contract totally
dependent on the tariff that the State sets
for power generation produced from this
Opportunities
National policy option for producing
electricity from renewable energy,
allowing the use of biomass
.
Threats
Rate for biomass in the market floating
according energetic policies in different
countries.
Portuguese State Budget problems
15
6. SPAIN
6.1. Target area characterization
Table 6.1: Target Area SWOT Analysis
Strengths
High value of natural heritage, favouring the
development of clean energies;
Existence of energy market;
Research and development in renewable
energy issues;
High livestock concentration
Intercoop role as farmer cooperatives
catalyser
Weaknesses
Lack of renewable energies recourses as raw
material;
Few renewable energies applications in the
area;
Low sensitiveness to energy saving;
Low public awareness;
Energy efficiency in buildings is not an
obligation yet;
Nitrate CE Directive (agricultural land
availability for application);
Electrical grid network infrastructure;
Thermal application from cogeneration (farm
typologies and nearby neighbours as potential
beneficiaries of thermal energy application).
Existence of areas suitable of taking Excessive dependency on fossil fuels (eg.
measures;
Lignite);
Suitable climate for bioclimatic applications
Reaction and suspicious to renewable
energies applications.
Opportunities
Threats
6.2 PPP implementation
Table 6.2: PPP implementation SWOT Analysis
Strengths
Weaknesses
Existence of energy management Agency
Insufficient infrastructure for renewable
Previous existing Private-Public-Partnership energy use (eg. Injection of Biomethane into
culture at local level
the natural gas greed)
No feed-in-law for thermal applications
No incentives at a local level
Absence of a local or regional energy Plan.
Country committments
Bureaucrecy;
Funds to invest in clean technologies
Electrical grid availability for energy
Liberalization of electricity market
generated exportation;
Secured tariff for renewable energies
Impact of transport cost (from farms to AD
Existence of mass center manure storage facilities and from facilities to land
(lagoons) in 5 places as future facilities (AD application as well).
and cogeneration);
Province Government commitment for
treatment and disposal contract;
Possibilities and potential availability for
other organic substracts for co-digestion.
Opportunities
Threats
16
6.3 Contract redaction
Table 6.3: Contract redaction SWOT Analysis
Strengths
PPP
synergies:
farmers-cooperativestechnologies-financing-province government
Private investors
Public investors and/or facilitators
Local, regional, national subsidies incentives
Opportunities
Weaknesses
There is not a recognized contract structure at
the moment;
Unwillingnes to change;
Lack of capacity and resources at regional
and local level.
Threats
17