Measuring, Mitigating and Monitoring Risks in Energy Efficiency Projects

GreenWatch, a Pioneering Risk Analysis Tool for Investing in Energy Efficiency Renovation Projects in Buildings

The Spanish Recovery, Transformation and Resilience Plan, which will invest 70 billion euros of public sources over three years (2021-2023), will allocate 6.8 billion euros to the Housing Renovation and Urban Regeneration Programme. The implementation of energy projects in buildings brings singular challenges. Proper identification, measurement and mitigation of risks is essential for making decisions on investment and project financing.

FTI Consulting has collaborated with Greenward Partners to develop a pioneering tool for the management of risks in energy efficiency projects in buildings. The tool employs an expert methodology to provide an individual risk score for the operational, real estate, commodity, regulatory, counterparty and reputational risks of these projects, as well as an overall global project risk score.

This allows investors and energy efficiency agents involved in a project to make well-informed investment decisions, set risk-adjusted financing pricing, and perform recurrent risk monitoring of project portfolios. The definitive boost to energy efficiency in buildings in Spain will come from public-private collaboration mechanisms such as PACE loan models or the public certification of energy savings through white certificate system, as is already the case in the large energy markets around us.