Renewable energy Valuations

Renewable Energy Valuations

Renewable energy valuations can include the valuations of entities engaged in the generation and distribution of biomass, wind and or solar electricity, the manufacture and distribution of renewable energy equipment or the financing of renewable energy related projects.

Valuation issues in relation to renewable energy related businesses include the expected price per MWh, recognition and pricing of large-scalegeneration certificates (LRETs), small-scale technology certificates (STCs), purchase power agreements (PPAs), changes in legislation including the Renewable Energy Target, changes in technology and treatment of grants and R&D tax credits.

Given the growth and uncertainty in the renewable energy sector, Lotus Amity typically takes a detailed and granular discounted cash flow valuation approach to valuation.

Experience

Lotus Amity provides business and company valuations for entities engaged in the renewable sector. Previous valuation engagements have included:

• Valuation of a tech-based infrastructure business in the biogas and renewable electricity market. Discounted cash flow valuation models were prepared on various projects to assist in capital raising with incoming investors.
• Critique of two valuer reports in relation to a transaction dispute with a distribution business in the renewables energy sector. Report prepared as an Expert Witness report for mediation. The report addressed issues including the basis of value, valuation date, assets being valued, valuation approach and application of approach, key man risk, analysis of earnings, assessment of future cash flows and normalisation adjustments. The report also dealt with rolling revenue trend, one-off revenues, inventory levels and inventory purchases, gross profit analysis, impact of inventory on gross profit margins, market salary and commissions for owner, monthly expense trend, assets transferred and liabilities assumed, payment for assets, working capital requirements and profit share analysis.
• Valuation of the loan notes held in a renewable electricity supplier. Lotus Amity prepared a valuation report that analysed the issuers operations, loan note terms, guarantors, debt service and repayment risk, security, subscription and pricing, financial covenants, quarterly performance, budget and forecast, cash and assets values, risk-free rates and market yield spreads.