This Hub guide is an introduction to assist anyone undertaking due diligence when looking to develop renewable energy generation for larger-scale power projects. Specialist advice should always be sought, and should be appropriate to the nature, scale and complexity of the project.

What is due diligence?

Due diligence in the context of capital projects refers to the consideration and management of risk over the entire project life cycle. In order to manage risk, those looking to develop a renewable energy project need to understand the types of risk that could be involved, their potential impacts on the success of the project and how these can be effectively managed. The sooner a due diligence approach is embedded within the project-development process, the sooner the key risks to the project’s success can be identified. This allows more informed decisions to be made, which should speed up the decision-making process and save cost as the project proceeds.

What issues should I consider with the due diligence of my project?

In this guide, due diligence is categorised into the following areas:

•  Legal – this includes general provisions affecting public authorities that wish to operate commercially, issues specifically associated with energy, project development and operation, and
  provisions associated with property and land. 
•  Commercial – this covers provisions associated with economic or financial policy, project financing, income generation, acquisitions and disposals, taxation and community
  participation, and benefit.
• Technical – this encompasses provisions associated with policy obligations, the physical state of the environment, the state of the surrounding energy network, and the installation and operational performance standards of the plant and equipment being introduced.

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