Renewables have matured: due diligence processes need a reboot

Renewables have matured: due diligence processes need a reboot

19 January, 2021 | Joss Boxford

The maturing of renewables has been a great success of the last 20 years. Renewables are now the dominant source of new power capacity, providing almost 90% of new worldwide capacity in 2020 [source] and overtaking fossil fuels as the main source of electricity here in the UK [source]. Cost reductions have been dramatic and as risk premiums have reduced, the cost of capital has plummeted, whilst project and portfolio sizes have increased.

There is now no doubt that renewables are firmly in the 'Maturity' stage of the Industry lifecycle; and battery storage is not far behind. See below.


Changing strategic priorities

As any management consultant will tell you, a shift in sector maturity requires an evolution in strategy. Now renewables have become more mature, the core question for industry leaders has changed from Can we scale? to Are we efficient?

These questions are particularly acute in the world of clean energy due diligence (DD). In the last decade, the primary challenge for financiers and advisers has been keeping pace with a hectic market, rapidly upskilling their team to get to grips with new technologies. New market opportunities in renewables were in abundance, so industry rightly focused on chasing that growth.

Meanwhile, we made do with imperfect DD tools; we managed data, client communications and review versions across a hodge-podge of tools and emails. We didn't pause to develop better, investor-centric approaches for communicating and mitigating risks.

But as renewables have matured, it's now time to pay greater attention to the DD process itself, to improve efficiency and make life easier for everyone involved. In fact, our mission at LiveDiligence is even bolder than this: we believe that due diligence can be radically better. We achieve this by providing:

  • Live access - enabling earlier identification of risk
  • Everything in one place – to take the stress out of DD management
  • Real-time collaborative editing – anything else just doesn’t make sense!
  • A secure DD environment – drastically reducing email traffic and risk of accidental sharing of sensitive information

…and lots more besides.

We know that we're just one part of the picture: it would be great to hear the thoughts of others who are thinking on the same wavelength as us (or have interesting counter-views!).