LA RAZÓN examines how climate risk affects the financial performance of renewable energy assets, drawing on analysis by Mitiga Solutions.
A €22 million difference between two wind farms
Mitiga modelled four wind farms in Spain using public data from a global energy company. Comparing two 32 MW sites, the analysis found that projected changes in wind conditions alone could create a €22 million difference in gross returns over 25 years, with a 1.65 percentage point gap in internal rate of return (IRR).
The article also looks at how heat and hail affect solar assets through reduced output, faster equipment degradation and physical damage. These risks affect cash flow, insurance costs and asset value.
Bringing climate risk into investment decisions
Financial models based on historical weather can overlook the conditions an asset will face during its operating life.
The feature explains how quantifying future climate risk helps investors and operators compare locations, assess resilience measures and account for climate impacts in asset valuations.
