Case Study: Asset Diversity Factor: The cornerstone of your asset valuation toolkit.

Our client in the U.S. renewable energy sector was looking to expand their asset portfolio. With a range of wind and solar assets available to acquire, they were seeking advice and analysis on which assets were the most attractive, and which would best integrate into their portfolio. Initially, the objective sought to evaluate project performance (i.e., annual energy production), overlooking the value of adding new assets to their existing fleet.  

We were tasked first to quantify the long-term annual energy production of several assets using operational performance data, leveraging our Asset Diversity Factor analysis to quantify how each potential new asset would help to reduce total portfolio energy production uncertainty. 

We performed our Asset Diversity Factor analysis that looked at the client’s existing portfolio and were able to quantify the portfolio benefit in terms of electricity production and revenue arising from the diversity of their existing assets. Further, we repeated the analysis, each time introducing each of the potential new assets into the portfolio. By comparing the additional benefit resulting from each addition, we could quantify which new asset would be the most valuable to add. 

The result was a comprehensive and detailed analysis delivering a ranking of portfolio benefit value from each potential asset. Informed by these results, the client used the information to update their financial models for their asset purchase.