In order to carry out the development of a renewable energy project, it is necessary to do prospect work, as well as obtaining permits, authorizations and licenses to legalize everything and provide technical, legal, and economic feasibility to the project in question. That is, a project under development will go through different phases until its achievement.
In order to understand what the development consists of we will analyze the different phases of preparation to undertake a project of renewable energies:
The development of a renewable energy project begins with the study and analysis of its technical and financial feasibility. First, strategic markets are identified to provide attractive investment opportunities.
The stability of the legal framework in the energy sector of the country in which each project is to be developed is of paramount importance, in order to obtain clarity both in obtaining permits and in procedures for the sale of energy.
Once an opportunity for the development of renewable projects has been identified, its location will be studied and the availability of natural resources in the area will be analyzed, such as solar radiation, wind speed and wind direction, or access to sufficient fuel to establish a biomass plant. In this phase the available energy resources and the possibilities of success in the later development are evaluated.
2. OBTAINING OF PERMITS AND LICENSES.
Once the available resources are observed, it is necessary to focus on the technical design to obtain the permits, licenses and authorizations necessary to operate in the plants. It is at this point that all these permits will be processed and a follow-up will be made to obtain them.
Here we find multiple procedures and formalities. The powers to issue licenses and permits are distributed between the State, the Autonomous Communities and local entities such as municipalities.
We emphasize that the procedure of all the development and of the time periods varies according to the technology and the country in which we develop the project. In photovoltaic projects one of the first steps is to request the Access Point or Connection to the electricity company and for wind is to perform measurements of wind, at least for a year.
We can say that this phase, in a photovoltaic project in Spain, ends with the registration of the project in the Register of Pre-allocation of Remuneration of the Special Regime. Subsequently, once the work is executed, the processing must be continued, ending with the final registration in the registry of facilities under special regime, along with other permits linked to the execution of the installation.
Appropriate structures are created to carry out renewable energy projects and the necessary Special Purpose Vehicle (SPVs) are incorporated, on which Due Diligence is carried out.
Due Diligence is a process that seeks information to assess and target the final price of a business acquisition transaction and the requirement of guarantees.
In this case, we speak of an External Audit of all aspects related to the project. The characteristics of the project will be analyzed and evaluated, both technical (technical project study, EPC analysis and O&M, evaluation of components, production, performance and availability, etc.), as legal and financial (study of the legal and tax structure, analysis of assets and liabilities, recalculation of income, etc.).
Due Diligence assesses the risks of the project in all its aspects and, in some cases, measures are proposed to mitigate or eliminate them.
After defining the design of the project, it will go to a construction phase. This consists of the construction and installation of the plant, comprising all the civil works to condition the land and make the pipelines, civil works of the interconnection of the plant with the electrical distribution or transport networks, carry out the rest of the necessary civil work, and the reception and assembly of all equipment. Once all these works are finished, it is certified that the plant has been executed as planned. Otherwise, the modifications must be justified and documented.
One type contracting used extensively in the development and execution of projects is the contract EPC (Engineering, Procurement and Construction), known as “turnkey”. This modality consists of a single interlocutor that fully supplies the facility ready to be operated, assuming tasks such as the design, purchase and supply of equipment and construction.
EPC contracts are generally associated with operation and maintenance contracts (O&EPC contracts are generally associated with operation and maintenance contracts (O&M)-. This ensures the investor the correct operation of the plant during its useful life.