Investing in Renewables
Since 2017, with the change of Government in Spain and the consequent legislative changes that have taken place (elimination of the tax rate or canon al sol), the drive for development and investment in alternative renewable energies in Spain, wind and photovoltaic energies, has been strongly resumed, with the state annually launching different public auctions for the contracting of MW for the implementation of onshore wind and photovoltaic farms.
Mainly, this fact, together with the consolidation of the Pool’s free market, with average closing prices above 40 euros MW in 2017, 2018 at 50 euros MW, in 2019 at 47.68 MW and a forecast for 2020 at an average purchase price of 39 euros MW (by covid-19 situation).
This price of MW is the price of the Pool in the free market by electricity utilities and operators corresponds to that produced or generated and evacuated to the grid and paid by Spanish electricity marketers through the certificates of grid measurements of the SYSTEM OPERATOR – SPANISH ELECTRIC NETWORK. This in turn has led to the establishment in Spain of numerous investment companies through private and sovereign investment funds and world-class photovoltaic development managers in the category of independent or private producers in the global energy sector.
What is the average MW price?
The average price for the last 5 years is 56.06 euros MW, period 2014 to 2019. According to OMIE Official Sources.
Currently, the main multinational companies, foreign and Spanish, in the renewable industrial sector of electricity generation, are active in Spain buying renewable projects under development, RTB (Ready To Build), ready and susceptible to construction, already built wind or photovoltaic farms. Also those that are already evacuated to the grid or in EPC turnkey mode.
Who is behind this change?
The Spanish Government is at the forefront of the positive transition of global climate change, mitigating the effects of massive CO2 production caused by the current conventional electricity generation, both in simple or combined cycles with dependence on any of the conventional fossil fuels.
Within this policy of changing the energy model and the production of clean sustainable energy as a global alternative is the elimination of the use of oil and other polluting sources. The Spanish government’s ENERGY PLAN 2020-2030 envisages the public tendering of 30,000 MW over the next 10 years at a rate of at least 3,000 MW per year. The modality is by auction. They will continue to be COMPATIBLE with the development of renewable parks by private initiative, a model that is currently undergoing the greatest development.
This modality is the one that concerns us in order to make future investments. It should be noted that in the last two years the installed and operational power of renewable generation in Spain has multiplied by 2. A much greater exponential increase is expected until 2030.
Solar Gardens What are they ?
A solar farm is an installation of photovoltaic solar panels located on the same plot, which produce energy through the solar hours of the area in which it is located and through its connection to the electrical network of evacuation granted allows the evacuation of this energy to a distributor, to be sold on the daily open market or pull, generating a guaranteed safe profitability and long term, based primarily on the life of the installed plates that initially we speak of 25 to 30 years.
How to invest
in renewable energies
Investment in Renewable Energies is a sector that is not very easy to access first and very technical in the background. In the scenario of investment in renewable energies and for the above reasons there are significant barriers to entry that hinder access to this type of business.
INVESASSET has its own consultancy and renewable energy division, INVESENERGY www.invesenergy.com
INVESASSET promotes, develops and builds photovoltaic parks for sale to final investors, thus allowing access to this limited and very profitable business.
For this purpose, our investment formula offered to the investor consists of the creation of the SPV, the company or vehicle that owns the investment, the turnkey construction of the park and the subsequent management of the park.
Our investment formula for retailers is through SYNDICATED INVESTMENTS, creating outside lobbies to access them in a totally secure, regulated, controlled and monitored manner.
If you would like to know more about this type of investment, please visit our website www.invesenergy.com
why invest
in Renewable Energies?
Projects based on renewable energies, and especially photovoltaic parks, are based on their analytical calculation and realisation fundamentally on certain and statistically measurable variables, not susceptible to uncertainty, above all in what affects the raw material that generates this type of business.
This, together with a highly technical business model, with low maintenance costs, makes renewable investments attractive investments with secure long-term profitability, with ratios that in many projects exceed 10% annualised profitability. For this reason we can conclude that investment in renewable energies is defined by:
INTRINSIC FACTORS
Secure projects
Guaranteed returns by Project Finance
Long term
Low maintenance costs
CYCLICAL FACTORS:
It is well known the effects that climate change is producing on the planet, and the need and the real commitment that countries are assuming in a regulated way to change the energy production systems. In addition to being a necessity, it is already an obligation.
Profitability of solar farms
The profitability of a photovoltaic project varies depending on several factors, hours of light production, cost of execution, concession times, but we can speak with certain guarantees that the projects move in guaranteed annual returns from 8% to 10%.
Investing in photovoltaic 2021
Our company Invesasset, through its energy division Invesenergy, is continuously prospecting projects for the implementation and realisation of parks. If you would like more information, please contact us and we will inform you of the projects available for investment at this time.
Where to invest in renewable energies?
Our company focuses its investment projects in the south east of Spain and especially in Murcia, Almeria, Granada and Extremadura.
Why it is important to invest in Renewable Energies
The advantages of this type of investment are manifold:
- Regulatory: The existing and changing regulations seek to facilitate and support the change to this type of energy.
- Legal: It is a fully regulated and secure sector.
- Fiscal: There are multiple fiscal advantages to the development of this type of project.
- Economic: The returns generated and the security and certainty of their long-term returns make these projects the most stable in the field of investment.
- Conjunctural: The favourable situation for these projects facilitates their consolidation as one of the best alternatives in the economic situation that the investment world is experiencing.
- Contributive, human and social: The possibility of contributing through a business to change and improve the situation of the planet, we believe should produce an additional satisfaction, investing in a business that contributes to the future sustainability of the planet.
Before checking the profitability of photovoltaic solar farms, let’s discuss some of the benefits or advantages of solar energy:
- It is a renewable energy: the sun is one of the most abundant resources on planet Earth and in Spain we have plenty of it.
- It is a clean energy: since it does not pollute anything, it does not emit toxic or harmful gases for the planet.
- It is relatively easy to obtain energy: it is not necessary to build large infrastructures such as coal or oil extraction, but only requires the installation of photovoltaic solar panels and an energy storage system.
- It is economical to obtain: compared to other non-renewable energies, solar energy requires a lower investment to start obtaining energy.
Inverting in solar energy
Is it profitable?
The answer to this question is yes, all the factors shown and analyzed above turn into secure and sustainable economic variables over time. Ignorance or entry barriers limit access, our company tries to facilitate such access to different types of investors.
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