Browsing by Author "Vaienti, Claudio"

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    Cash flow at risk of offshore wind plants
    (IEEE, 2017-08-18) Vaienti, Claudio; Ioannou, Anastasia; Brennan, Feargal
    Offshore wind power plants might be seen as high risk investments. Their risk depends on technical and financial elements. When some corporations decide to invest in a plant, they decide to take all above-mentioned risks. The question “Given a specific investor, a specific plant, etc., how big are the investment risks?” has not a clear answer. In fact, the impact of the previous risk factors on cash flows is not completely quantified, mainly because all the risks are related, but the dependency structure is difficult to be modelled. Hence, it is important to have a measure of the impact of the risks into the cash flows. Due to the lack of knowledge in this quantification, we have decided to investigate it more in the detail. The paper aims to measure the variability of cash flows and how effective are the strategies for locking electricity prices, ship freight rates, or both in the reduction of this variability. We adopt the Monte Carlo approach for simulating all the possible cash flows and for measuring all the uncertainties. The output shows that seasonal and uncertain cash flows. The strategies, for reducing the probability of negative cash flows, work only with locked electricity prices.
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    A cluster analysis of investment strategies in the offshore wind energy market
    (Institute of Electrical and Electronics Engineers, 2017-08-18) Ioannou, Anastasia; Vaienti, Claudio; Angus, Andrew; Brennan, Feargal P.
    This paper maps different investor strategies in the offshore wind energy market based on data from existing wind farms in the UK. This is realized through the employment of cluster analysis, which classifies offshore wind energy investors - who have purchased equity stakes-in terms of the entry timing, exit timing, purchase timing and stake purchased. We, then, perform a SWOT analysis to identify the major strengths, weaknesses, opportunities and threats encountered by each cluster of stakeholders. Cluster analysis revealed the existence of three distinct investment strategy profiles: i) Late entry investors, ii) Pre-commissioning investors, and iii) Own-build-transfer investors. Corporate and institutional investors tend to be late entry investors, whose strategy is based on buying assets while they are fully operational avoiding construction risks, retaining a risk aversion profile. The exit timing of OEMs and EPCI contractors usually takes place before or right after the commissioning of the wind farm. Finally, major Utilities tend to keep the operating assets on their balance sheet and divest only part of them (mostly minority stakes) during the operating stage; Independent energy companies are found in both 2nd and 3rd cluster; however, exceptions may be observed.