3 questions to smart minds
Photo: S. Weinheimer | ORRICK Hölters & Elsing

Focus on renewable energies

For this 3 questions to S. Weinheimer

ORRICK Hölters & Elsing
Photo: S. Wein­hei­mer | ORRICK Hölters & Elsing
5. Decem­ber 2012

Compa­nies in the ‘Rene­wa­ble Ener­gies’ sector are not only in the media spot­light, but are also expan­ding. Energy balance is one of the frequently quoted terms in this field. Which rene­wa­ble energy sector is growing and what inves­tors are focu­sing on 

For this 3 ques­ti­ons to Part­ner at ORRICK Hölters & Elsing, Düsseldorf

1. In the rene­wa­ble energy sector, they have advi­sed on tran­sac­tions at world market leader German Pellets (Germany) or Gold­wind Inter­na­tio­nal Holding (China), among others. Where is the market heading accor­ding to your observations?

Tradi­tio­nally, there are five sectors in the field of rene­wa­ble ener­gies: Hydro­power, wind energy, solar energy, geother­mal energy and rene­wa­ble resour­ces (bioen­ergy).

  • The gene­ra­tion of hydro­power is costly and regu­larly leads to massive inter­ven­ti­ons in nature. The market will deve­lop slowly here.
  • Wind energy is alre­ady used to a large extent in Germany. There are many wind fields with the conse­quence that there are few sites for new fields. For a new wind field, one has to reckon with about ten years from the idea to the first gene­ra­tion of elec­tri­city from wind energy. Whether offshore wind power gene­ra­tion will prevail remains to be seen. The expen­ses for this are considera­ble. The market for wind energy will ther­e­fore conti­nue to deve­lop, albeit not as stor­mily as before.
  • Solar energy has won many friends in recent years. It should be noted, howe­ver, that it was consider­a­bly subsi­di­zed, at least in Germany. Another disad­van­tage of solar energy is that it can only be gene­ra­ted when the sun is shining. For use beyond the home, the issue of storage capa­city and grid swit­ching must be resol­ved. There will be signi­fi­cant efforts here in the future. Here, too, the market will ther­e­fore not deve­lop excessively.
  • The use of and market for geother­mal energy will be slow in the coming years. It is still too uncer­tain what lasting conse­quen­ces the inter­ven­tion in nature will bring.
  • Bioen­ergy promi­ses the grea­test growth poten­tial in the over­all view of nature compa­ti­bi­lity, visual impact on the land­scape and ener­ge­tic efficiency.
2. How is the commit­ment of German and inter­na­tio­nal inves­tors in the field of rene­wa­ble energies?

The extra­c­tion of hydro­elec­tric power will remain the preserve of the large corpo­ra­ti­ons. It is not suita­ble for private house­holds to gene­rate their own energy. There will be no signi­fi­cant inves­tor invol­vement. The same, although for diffe­rent reasons, applies to the extra­c­tion of geother­mal energy.

The situa­tion is diffe­rent for the gene­ra­tion of wind energy and solar energy. Both natio­nal and inter­na­tio­nal inves­tors will conti­nue to expand these areas. Germany alre­ady has a leading posi­tion in the field of wind energy, so the poten­tial for increase is compa­ra­tively small. In the area of solar energy, it remains to be seen when poli­ti­ci­ans will consider further cuts in subsi­dies. — The commit­ment of German and inter­na­tio­nal inves­tors in the field of bioen­ergy, on the other hand, appears to be unbroken.

3. Do parti­cu­lar comple­xi­ties arise in M&A tran­sac­tions in this sector? If so, which ones?

There are no parti­cu­lar comple­xi­ties in M&A tran­sac­tions in the rene­wa­ble energy sector. Of course, it “does no harm” if the consul­tants working in this area have at least a basic know­ledge of the actual subject matter. Howe­ver, this does not distin­gu­ish (legal) advice in the field of rene­wa­ble ener­gies from advice in other specia­li­zed fields.

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