“When new chapters begin, prepare yourself – there will be opportunities to create value,” said Ingmar Wilhelm of London-based fund manager Terra Firma, speaking at Infrastructure Investor's Renewable Energy Forum 2014 in Berlin.
The 'new chapter' is the dismantling of renewable energy subsidy regimes and the progress of the industry towards grid parity.
Wilhelm pointed out that deal flow is strong as small wind and solar assets are brought to market in need of scaling up and utilities look to sell assets to shore up their balance sheets.
Rory O'Connor of BlackRock said that the transition of the market is in some respects favourable. “We prefer assets that are efficient and close to grid parity,” he said. “Over the next five years, a lot of the talk about regulation and tariffs will decrease.”
O'Connor added that a big theme today is “the marriage of institutional capital with utilities. That partnership is creating nice opportunities.”
Thomas Rottner of Platina Partners memorably described the evolution of renewable energy as a change from “Will it happen?” To “it's happened; oh my god.” He added: “Thousands of assets have been created, there has been massive diversification, but we need to make sure we harness all the benefits. Part of the solution will be international inter-connectivity.”
Rottner continued: “We're at a cusp where the industry has benefitted from massive incentives which can't carry on and we're now moving into a new market-tested regime. The question is how do we get from A to B?”