Trends and Technology Development

Abstract

Technology is a significant aspect of Renewable Energy Infrastructure. It can feature more or less variability depending on the source of energy used and can be a widespread form of technology (hydropower, wind, solar PV) or a recent development such as hybrid systems with green hydrogen or floating PV and offshore wind. Technology, if unproven, can represent a risk factor in the financing process, especially because the entire project depends on it and its operation reliability. Some lenders simply categorically rule out prototype-stage equipment. Yet, the ever-growing market competition pushes sponsors to consider the newest models in their planning to take advantage of the efficiency enhancement. Their objective: reducing the Levelized Cost of Energy (LCoE) to be able to submit bids competitive enough to win in auctions. The equipment representing up to 60% of the total capital expenditure, sponsors are in constant negotiation with the OEMs, updating their technological benchmarking to be ready for complex RFP processes and excelling in procurement bargaining ‘games’, in a market where competitors consolidation has reduced the number of players and created a risky oligopoly, which limits the possibility of diversifying the supplier's portfolio. Understanding what is in stake when talking about today’s and tomorrow’s technology helps preparing procurement strategy for example and anticipating the project development for the years to come avoiding technology obsolescence.