The growth of Element Power into a leading independent renewable energy developer is rooted in the knowledge and expertise of the team across many geographies, and their ability to proactively identify and execute market opportunities. From greenfield sites through to the acquisition of fully developed projects, we continually seek to structure ‘win-win’ arrangements where it can add value for the benefit of all stakeholders.
Assessing the feasibility of projects is a critical factor in ensuring that development capital is allocated appropriately to those assets that will successfully reach completion and generate returns appropriate to the risk taken. This is an ongoing process in the life-cycle of development, but is also of primary importance when assessing opportunities and potentially stepping into projects and paying acquisition premiums.
We have established in-house processes whereby the feasibility of project opportunities can be efficiently checked, to identify any development issues that would prevent the project proceeding or that need to be taken account of in the commercial structuring of the transaction.
The selective acquisition of projects is an important part of our strategy to broaden our portfolio. We have a strong track record in acquiring projects at different stages of development, and providing the capital and skilled resources to take them to financial close. Our in-house M&A capabilities complements our skill base across development, technical, commercial and grid to ensure that acquisitions are thoroughly vetted and due diligence targeted on the critical risk and value factors. We also work with some of the industry's leading legal, technical and engineering advisers to execute transactions.
From decades of experience in the sector, our management understand and respect the fact that development is a local activity. When considering the entry into or expansion within a market, our first approach is to consider seeking appropriate joint venture opportunities. The importance of working with established businesses in the sector cannot be underestimated. Whether it is in the understanding and ability to work with indigenous customs and business practices, having the right connections and relationships on the ground or identifying the ‘hidden’ risks and issues that need to be dealt with for projects to proceed.
The renewable energy market is typically fragmented, with low barriers to entry encouraging small-scale developers to start projects. The entrepreneurs and teams behind these ventures are the foundation of the renewable energy sector, and having first-mover advantage frequently means that they have some of the best opportunities in the relevant market. Whilst they are generally excellent developers and business people, they may lack significant development capital and also may not have the experience of the later stages of development after land and permits are secured nor understand the requirements of project and other finance. This is where we can provide a ‘fit’ by filling the gaps in skills, capital and resources. In addition, by supporting the local developer it is possible to expand the business more quickly across other projects and thereby increase returns and diversify risk.
We have established several successful joint ventures in the onshore wind and solar pv markets, and continually seek such opportunities to expand our presence in existing markets and find entry points for new ones.
We have skills and a successful track record in originating project opportunities from their inception, and taking them forward into development. By deploying a range of technical and development expertise, supported by third party specialists, we can identify sites with the appropriate combination of energy resource, accessibility to grid and acceptable environmental impact.
Greenfield development – which describes the origination of projects from the earliest stages of development, but which can also be on ‘brownfield’ sites – has a higher degree of risk, but enables us to capture all of the value accrued in the project when it is completed. A greenfield strategy complements our other origination activities of acquisitions and JV’s, and is used to broaden our portfolio of projects in established markets.
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