{"id":14990,"date":"2012-09-14T08:00:27","date_gmt":"2012-09-14T05:00:27","guid":{"rendered":"http:\/\/www.iliaspapageorgiadis.ro\/en\/?p=14990"},"modified":"2014-03-12T16:38:04","modified_gmt":"2014-03-12T14:38:04","slug":"investing-in-wind-energy-10-obvious-issues-that-some-investors-tend-to-underestimate","status":"publish","type":"post","link":"http:\/\/www.iliaspapageorgiadis.ro\/english\/2012\/09\/14\/investing-in-wind-energy-10-obvious-issues-that-some-investors-tend-to-underestimate\/","title":{"rendered":"Investing in Wind Energy: 10 \u201cobvious\u201d issues that some investors tend to underestimate"},"content":{"rendered":"

* the article was first published on the 22nd of February 2012<\/em><\/p>\n

2012 is definitely the most interesting year in the short history of the Romanian Green Energy sector. There are many out there who compare it with 2007 and the Real Estate sector back then. Foreign investors show high interest indeed, but they are much more cautious now compared to the past. The era of “buy now, check later” is history. Nowadays everything is verified in advance, thoroughly and carefully.<\/p>\n

Let us take the example of the Wind Energy segment, the most dynamic one at the moment. It has attracted the interest of several big companies and investment funds, but there are many “obvious” issues that one should be aware of, before he proceeds in his investment. Let us overview 10 of them together:<\/p>\n

1. Wind measurements<\/strong><\/p>\n

Don’t smile. In Romania of 2012 there are several people out there who try to sell wind projects, without proper wind measurements (!) They have millions of excuses for this, but there is no reason for someone to lose time with their cases.<\/p>\n

2. “Give me some money, to show me that you are serious. Then you can verify the documents of my project”<\/strong><\/p>\n

I heard this expression more than 20 times last year. The excuse is that “the owner does not wish to lose time with people who are not real investors”. But I don’t know many real investors who would accept this.<\/p>\n

3. Do we need a transformator? We do, plus all adherent details for the project<\/strong><\/p>\n

The majority of wind energy projects in Romania need a transformator as well, in order for them to enter the grid without problems. The owner is supposed to have studied the issue, being able to provide us, in details, the technical solution he chose.<\/p>\n

4. How do we connect to the evacuation point?<\/strong><\/p>\n

Half of the projects in Romania have stopped when they reached this critical question: How do we connect? If we have to pass through private properties, the problem must be solved in advance. If the route is not 100% secure, the investor will end up being blackmailed and no one has time or money to lose.<\/p>\n

5. The cost to connect to the grid<\/strong><\/p>\n

I know projects where the connection to the grid boosts the total investment by more than 30%. Some of them are still worth it, due to the wind speed and total net production of MW\/hour. What is the status of your project?<\/p>\n

6. What does the business plan include?<\/strong><\/p>\n

Everything! But many project owners do not even have one that can be presented and considered trustworthy. Why? These business plans should be written by specialized companies. And these companies charge a lot…<\/p>\n

7. When do we pay?<\/strong><\/p>\n

I know, the typical expression says “I want to sell now, without waiting for the investor to start building the project”. But serious investors always prefer to leave a sum for the end of construction, making sure that the project owner assisted them during the construction period.<\/p>\n

8. A low project price is not always as cheap as it looks<\/strong><\/p>\n

The first time I was offered a wind project with a very low price, I was happy. Then I looked at the wind speed, the net production of MW\/hour and the cost to connect to the grid. Calculating with a colleague of mine, we realized that the price would be expensive even if the project cost 0 Euro.<\/p>\n

9. Is there room for speculation games?<\/strong><\/p>\n

Romania does not have an unlimited number of MW which will receive subventions. The figure is specific and it will probably be covered during 2013. If you intend to buy and wait, you risk to get blocked like the owners of Real Estate assets.<\/p>\n

10. Papers, papers, papers<\/strong><\/p>\n

What some Real Estate investors are paying for today is the lack of proper documents for their properties. The human species should evolve. We should learn by this mistake and be extremely careful in everything, Green Energy included. If the papers are not in order, it is a very dangerous bet that you undertake.<\/p>\n

What is your opinion?<\/p>\n","protected":false},"excerpt":{"rendered":"

* the article was first published on the 22nd of February 2012 2012 is definitely the most interesting year in the short history of the Romanian Green Energy sector. There are many out there who compare it with 2007 and the Real Estate sector back then. Foreign investors show high interest indeed, but they are […]<\/p>\n","protected":false},"author":3,"featured_media":59454,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[235],"tags":[],"_links":{"self":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/posts\/14990"}],"collection":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/comments?post=14990"}],"version-history":[{"count":0,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/posts\/14990\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/media\/59454"}],"wp:attachment":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/media?parent=14990"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/categories?post=14990"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/tags?post=14990"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}