Technical Due Diligence of Wind Turbines – Security for Sustainable Investments

Let's imagine the following scenario:

An investor acquires a wind farm. In joyful hopefully, the wind farm will be taken over and operated. But after half a year, the investor realizes: The earnings do not come as planned. The Plants stand far too much due to damage.

What happened?

The investor bought the wind farm without to examine the actual risks.

Technical due diligence, or TDD would have protected against unpleasant surprises. It creates transparency, minimizes risks and builds trust for all stakeholders – from banks to insurers to investors. Especially in a dynamic market like the wind energy, it is an indispensable tool for sustainable decisions. It is the backbone of any well-founded investment decision in the wind energy sector.

What is Technical due diligence?

A technical due diligence (TDD) diligence is a comprehensive analysis of all technical aspects of a wind energy project. It illuminates the facility from different angles – from planning to construction to operation. The aim is to reduce risks to assess performance and to assess the long-term profitability.

In short: Experts check whether the system keeps its promises – from the wind forecast to the technology to the Maintenance history. It's about hard facts: How much electricity is really generated? Is the turbine suitable for the location? Are there any hidden defects?

🔍 What What is behind the technical due diligence?

The technical due diligence examines the essential risks of the wind farm project.

Typical test points are:

• Location assessment: wind conditions, Topography, accessibility and environmental conditions
  
• Plant Engineering: Turbine Model, Component quality, certifications, series production, (expected) Lifespan at the site
  
• Construction condition and maintenance history: Condition of foundations, towers, rotor blades and electrical systems
  
• Permits and grid connection: Completeness, validity and technical requirements
  
• Essential construction and operating contracts: purchase contract, Maintenance contract, technical and commercial management, Grid connection contract
  
• Yield forecasts and operating data: Comparison of target and actual values to evaluate performance
  
• Remuneration and revenue situation: EEG, PPA, Location quality
  
• Cost assumptions: In the end, the results in monetary terms in the financial model. Here, the input data checked.
  

This can be done individually depending on the project further test points.

📊 The Phases of a transaction – what scope of due diligence makes sense

A transaction always runs in four phases off.

Phase I, the screening, will involve new projects. In the screening phase, a rough project evaluation, which can be an internal due diligence to assess the rough economic efficiency. As a result, a declaration of intent a so-called Letter of Intent (LOI). This explains the interest in an acquisition.

In phase II, the pre-evaluation, the feasibility was checked and an initial assessment of the project idea was given. In a TDD is used here to carry out a site analysis, the wind potential, the approvability and the rough profitability analyzed. The phase ends with the submission of a non-binding offer (NBO).

In phase III, the full due Diligence, a full examination of all technical features is carried out. In most cases, a potential buyer then receives exclusivity for the examination. The aim is to identify and evaluate all technical risks. Here, usually in a magical due diligence triangle, consisting of technical due diligence Diligence, Financial Due Diligence and Legal Due Diligence. Than At the end of the phase, a binding offer (BO) will be submitted.

In Phase IV, the final phase, the signing & closing, the purchase contract (SPA) is signed and the purchase is completed. consummated. As part of the due diligence, the findings to date are to be confirmed or last short-term adjustments in the context of the negotiations .

After the end of the last phase (post-closing) the wind farm will then be handed over to the asset management of the new operator. The aim here is a safe transition to the company.

⏳ When will typically did technical due diligence?

Technical due diligence is always when decisions are made that have a long-term impact on the have. It is not a luxury – it is a duty when there is a lot at stake.

Typical situations in which they is carried out:

• Before buying a wind turbine Whether Single turbine or entire wind farm: Buyers want to know what they are getting – and whether it's worth it.
  
• For project financing Banks and Investors demand reliable data. Without technical testing, there is no green light.
  
• Before repowering When old plants replaced by new ones, it must be clear whether the location and the infrastructure.
  
• In the case of business takeovers or shareholdings Anyone who enters ongoing projects needs transparency about the condition, Performance and risks.
  
• As part of renovations or dismantling The end of a plant also needs to be well planned – technically and economical.
  

💡 Why What counts:

The energy transition is progressing – and with it interest in wind energy projects is growing.

Investors, operators and banks need Safety. A well-founded examination creates trust – and protects against bad ones Surprises. Especially in the case of repowering or second-hand plants, it is indispensable.