Increased capital deployment in renewable energy investments in 2020, combined with the subsector’s strong performance through the Covid-19 pandemic, has led to a significant uptick in the interest of infrastructure funds in optimizing renewable energy asset performance. This is according to Clir, the leading provider of performance assessment software for renewable energy, which has announced the realization of record project gains across its 8 GW portfolio of wind and solar assets in the third quarter of 2020.
The infrastructure fund community has traditionally operated renewable energy investments remotely, relying on lagged asset management reporting to review the performance of their projects. More recently, as interest in the renewable energy sector has increased, a heightened focus on such technologies has encouraged fund managers to better understand primary asset level data and optimization opportunities.
During the third quarter of 2020 alone, across 1,260 MW of wind farms in the United States, Clir supported infrastructure fund managers in achieving a validated performance uptick of more than 25 GWh annually, 6 GWh of which was realized at a single project, equating to a total increase of more than US$1.1 million annually in combined recurring revenue.
Clir helps asset owners to identify specific performance characteristics that can be optimized for improved generation and revenue. One such asset owner, Northleaf Capital Partners, a global private markets investment firm, continues to look for new and innovative ways to enhance investor returns. In doing so, it selected Clir to help optimize generation and increase operating cashflows at its renewable energy projects.
While many wind projects can perform reasonably well with standard maintenance and oversight, targeted optimization by active asset managers like Northleaf results in significantly improved performance over the life of an asset. During the third quarter, Clir identified areas for improvement for one of Northleaf’s wind assets, including misconfigurations of upgrades and biased sensors leading to control anomalies. Clir then worked directly with Northleaf’s operators and OEMs to implement and validate the proposed solutions.
Ian McDonald, Principal Manager, Clir Renewables said: “The resilience of clean energy as an asset class in the face of Covid-19, a greater focus on ESG and its reporting and, most recently, the US election results, has generated an uptick in investment interest that is only set to increase in coming months. With this growing investment interest comes the requirement to increase production, monitor asset health, manage technical financial risk and enhance domain expertise. Asset owners opting for a more granular focus on the performance of existing assets to increase project performance are best placed to take advantage of the expanding market.”
“And, while in-depth, contextualized asset data is key to identifying optimization opportunities, fundamental to an owner realizing gains quickly is a productive relationship with the operator and OEM. It is becoming increasingly clear that this relationship is best facilitated via an experienced, data-rich third-party. A case in point is our work with Northleaf Capital Partners. Northleaf is highly focused on maximizing the performance of its projects and, by onboarding Clir, has been able to take a data-driven approach to engaging with OEMs and improving key production metrics.”
Kaushik Ramki, Director at Northleaf Capital Partners, said: “Working with Clir has allowed us to identify and capitalize on valuable opportunities to boost project performance and, thereby, increase revenue or reduce costs over the project’s life. The industry experience of Clir’s Customer Success and Renewable Analytics team and their ability to collaborate with our operators and OEMs has made it possible for Northleaf to realize meaningful gains in a short amount of time. As a result, we have been able to increase project value and, ultimately, deliver improved returns to our investors.”