A Start Guide to Successful Renewable Energy Project Development
The global push for renewable energy is becoming more critical than ever as we approach 2025. The International Energy Agency (IEA) forecasts that renewable sources will provide 35% of the world’s electricity by 2025, up from 29% in previous years. This growth significantly moves away from traditional fossil fuels like coal and gas.
The United States, China and several European countries have established new records in renewable capacity additions, which has accelerated this change.
However, achieving the ambitious tripling target will require enhanced policy implementation and financing strategies. With global investments in clean energy projected to exceed USD 3 trillion by 2025, stakeholders must have the right tools and techniques to capitalize on this growth.
Global Infrastructure Advisors (GIA) offers expert advice in the energy and infrastructure fields. We help with project finance, transactions and technical assessments, making them an important partner for developers who want to make smart decisions and build trust throughout their projects.
This guide explains the key steps in developing a project, from analyzing the market to getting financing and managing the entire process.
Key Steps in Renewable Energy Project Development
Below, we outline 7 significant steps and explain what each entails.
Pre-Feasibility
Building a solid financial model is the first step in order to estimate costs, forecast revenue and assess potential IRR.
GIA’s expertise helps create models that match market expectations, helping to make wise decisions.
Local government support and ownership are required to align local community interests. You will also need the project to fulfill regulatory and licensing parameters. An experienced local legal firm can help examine regulatory frameworks, renewable energy policies and the support mechanisms available within the country.
Key considerations include assessing offtake potential—the ability to secure long-term purchase agreements (PPAs)—and evaluating opportunities for private sector participation as an Independent Power Producer (IPP). Guidelines and checkboxes with these factors help identify challenges early and prevent unnecessary future licensing hurdles.
Development Funding
Development funding helps the project move from the idea stage to final approval.
At this point, the fund is used for the feasibility study, technical assessments, environmental reviews and making sure the project complies with all local regulations. GIA’s strategic advisory helps stakeholders manage funding efficiently through this critical phase.
Furthermore, land acquisition and addressing legal requirements, such as securing necessary permits, are essential. GIA ensures that these aspects are handled smoothly, providing the required financial backing to take the project through financial close, where all final agreements are signed and the project is ready for the next phase.
Feasibility Study
This step thoroughly addresses the project’s technical and financial aspects.
Feasibility studies determine the potential for energy generation, develop a basic project design and revise cost estimates for initial development and ongoing operations.
Obtaining regulatory approvals and revisiting the financial model with the latest information is also critical. Grid integration is assessed as an option for generated energy to be efficiently delivered on the market.
Other engineering factors, like local infrastructure and whether the project can be technically done, are checked and set in place to ensure the required work is completed appropriately.
Offtake Agreements
Signing long-term offtake agreements is important for financial stability.
Power Purchase Agreements (PPAs) and long-term contracts with energy buyers give the project a steady income stream. In this stage, it’s important to negotiate good terms with buyers, like utilities or big companies, to agree on prices for energy sales.
Terms, including pricing, payment plans and contract length, are negotiated to ensure they fit the project’s objectives and the market’s expectations. To prepare the project for successful funding and execution, GIA assists in negotiating parameters that reduce risks and foster investor trust.
Procurement
During the procurement phase, the project team selects contractors and suppliers to deliver essential services, including engineering, procurement and construction (EPC). This process begins with issuing tenders for large supply contracts and continues through rigorous contract negotiations to finalize the terms and pricing.
At this stage, the Best and Final Offer (BFO) ensures both parties agree on the final price and service delivery terms. GIA’s advisory team supports clients in managing tender processes and contract negotiations, ensuring that the project secures high-quality services at competitive prices while adhering to project timelines and objectives.
Government
Getting the government involved early is vital to keep the project on track.
Start concession agreements early to secure land rights operating licenses and set terms for land use and sharing profits. Getting all the required approvals, including those for environmental and safety rules, is also important.
Investment agreements can also be made to reduce risks for investors by providing financial incentives or guarantees. GIA’s advisory services help make sure these steps happen on time, build aligned relationships with government officials and help the project succeed.
Financial Close
Once the project’s foundational elements are in place, securing financing becomes the critical next step.
You will need to decide whether to get money through equity, debt or a combination of both. GIA helps clients determine the best way to structure the funding to get the most profit and reduce risks.
During the lender’s review process, GIA works with banks and other financial groups to review if the project is financially sound, mitigates any risks and has solid long-term cashflows.
Once all conditions are met, the project reaches a financial close, where the necessary capital is secured and all contracts are finalized. With GIA’s support, projects can reach financial close, ensuring they are funded and ready to move forward into the construction phase.
Moving to Operations
A renewable energy project’s development requires intensive planning, careful work and teamwork.
By following the steps above, developers can solve common issues and develop energy solutions that benefit their communities and the environment.
The U.S. renewable energy investments are growing significantly. The market is likely to top USD 320 billion by 2025. GIA help ensure projects arei mplemented in line with increasing investment.
GIA helps renewable energy developers by offering services that make building these projects more manageable. Whether you need help understanding the rules, running a tender, or getting financing for your project, our experts are ready to support you. Let us help you.
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