In this article, Robert S. Kaplan and Anette Mikes present a categorization of risk that allows executives to understand the qualitative distinctions between the types of risks that organizations face. Preventable risks, arising from within the organization, are controllable and ought to be eliminated or avoided. Examples are the risks from employees’ and managers’ unauthorized, unethical, or inappropriate actions and the risks from breakdowns in routine operational processes. Strategy risks are those a company voluntarily assumes in order to generate superior returns from its strategy. External risks arise from events outside the company and are beyond its influence or control. Sources of these risks include natural and political disasters and major macroeconomic shifts. Risk events from any category can be fatal to a company’s strategy and even to its survival.
Risk is a part of every project that an organization takes on. If companies do not take risks as a part of their project management strategy, they become more likely to miss their project deadline. This is why planning for risks as a part of a project management strategy is crucial. Only 27% of organizations can say that they ‘always’ use risk management practices in their project, while 35% use them only ‘sometimes’.
To be able to successfully manage risks within projects, there are a few techniques organizations can implement as a part of their project management process listed below.
Wind energy is among the most relevant types of renewable energy and plays a vital role in the projected European energy mix for 2020. The aim of this paper is to comprehensively present current risks and risk management solutions of renewable energy projects and to identify critical gaps in risk transfer, thereby differentiating between onshore and offshore wind parks with focus on the European market. Our study shows that apart from insurance, diversification, in particular, is one of the most important tools for risk management and it is used in various dimensions, which also results from a lack of alternative coverage. Furthermore, policy and regulatory risks appear to represent a major barrier for renewable energy investments, while at the same time, insurance coverage or alternative risk mitigation is strongly limited. This emphasizes the need for new risk transfer solutions to ensure a sustainable growth of renewable energy.
This analysis was written for bank risk managers, credit officers, and senior business leaders who recognize a wide range of potential risk factors pertaining to solar investments and seek a systematic distillation of the industry’s best practices. Since the risk management function begins at origination, the audience also includes those within the sales or origination function at banks or within project finance groups at solar companies. This report assumes that a reader has a basic competence in project finance and tax equity structures. This guide is designed to provide an authoritative perspective on solar risk management, as this document reflects experiences and learnings drawn from investors representing more than 50% of the U.S. market.
The global offshore wind market is expected to deliver a several-fold increase in capacity on today’s levels by 2030.
But what does this mean for stakeholders in an environment of increasing finance availability, decreasing government incentives and improving cost efficiencies?
To investigate this we surveyed over 100 offshore wind experts including lawyers, funders and consultants, from the UK and internationally, to understand their views on the risks and future development of the offshore wind market.