Dr. Peter Koßmann: "Wind power plants have become a high-tech product." Source: ENERCON

Knowing how the wind blows

Author: Dr. Peter Koßmann, ENERCON

Investments in wind power are ESG investments par excellence. However, investors need partners who can create capital market-friendly structures that grant them the best possible access to such assets. As one of Europe’s leading project developers of wind power plants, ENERCON, an industry pioneer since 1984, has extensive, in-depth expertise in this respect. Dr. Peter Koßmann from the Mergers & Acquisitions team at ENERCON talks to universal spotlight.

Dr. Peter Koßmann, Mergers & Acquisitions, ENERCON Source: ENERCON

universal spotlight: Dr. Koßmann, ENERCON has more than 30 years’ experience in the industry and is now developing wind power projects all over the world. Looking back, what has changed in the wind energy utilization / wind power development in this time?

Dr. Peter Koßmann: When Aloys Wobben, the engineer and wind power pioneer, founded ENERCON in a garage in 1984, the company focused on building individual plants / turbines with a moderate output from today’s point of view. At the beginning, Wobben took out personal loans to finance such turbines / plants. From these modest beginnings, which were typical for the whole industry, a completely different approach has developed. We now plan entire wind parks rather than just build individual turbines. The scale of ENERCON’s current global reach is all the more striking when you consider the goal Wobben envisaged when a journalist asked him about his expansion plans shortly after the company was founded. Wobben replied that he would be happy if he could one day manage to build 10 turbines a year. Today ENERCON works on hundreds of international projects simultaneously. And wind power plants have become a high-tech product.

What makes wind power such an attractive investment?

Investors can become actively involved in the energy transition. Wind energy is a particularly suitable asset to be strategically allocated in a carbon-neutral portfolio to meet the growing demands of sustainable investing. Wind power investments can also supply something that is otherwise very hard for investors to find in this current low interest rate environment: steady, stable and attractive yields. With long project cycles and a high degree of certainty on the planning side due to long-term purchase agreements for electricity generated, wind power investments can now assume the role that was long the preserve of investment-grade bonds when interest rates were higher. Wind power investments can also make a valuable contribution to institutional investors’ liability management.

How can ENERCON ensure that wind power investments meet investors’ targets?

Low leverage, good locations and our high-quality turbines - these are the best pre-requisites for a conservative portfolio.

Dr. Peter Koßmann

Developing direct access options for the most diverse of target groups is part of ENERCON's DNA. We have worked for decades with partners who aim to ensure a high degree of reliability as well as low risk. All citizen-owned wind parks, for example, have proved profitable to this day. ENERCON approaches each new project with the following in mind: low leverage, good locations and high-quality turbines. These are the best pre-requisites for a conservative portfolio. We oversee our wind power projects from the initial planning and site assessment stage through the entire cycle of the project. Our founder set up the ENERCON PartnerKonzept (EPK) service more than 25 years ago. Among other things, it guarantees high availability - more than 97 percent - of the turbines developed and managed by us. This is comparable to an insurance policy. It also suits investors with absolute return investment goals.

What solutions can you offer with your experience?

ENERCON is committed to providing efficient, capital market-friendly wind energy investments for a wide range of institutional investors. In doing so, we aim to create investment structures that meet investors’ specific needs and goals. Above all, clients are no longer obliged to acquire major stakes in entire wind parks. We offer flexible, efficient access to portfolios, as well as optional client financing, interim construction financing and co-investments. Wind parks are a rare asset in the market. We have an extensive portfolio of diverse assets at our disposal due to our international reach. Combined with our extensive track record, this enables us to put together an investment “package” that is tailored to investors’ needs.

What is ENERCON’s strategy for the future?

We plan to continue expanding in this favourable environment for our technology. Our focus, among other areas, is on Europe where in the wake of the EU Commission's "Green Deal", conditions are particularly good. Wind energy has a decisive role to play in the transition to climate and carbon neutrality. It will also remain indispensable as a primary source of energy in a potential hydrogen economy. By focusing on a reliable, conservative approach, we aim to continue building on our track record with investors and to use our expertise to create options that combine customer, provider and investor interests. By generating energy for a carbon-neutral future, we also want to play our part in helping the world achieve the climate goals that are vital for the future of mankind. 

Author: Dr. Peter Koßmann, ENERCON
Date of issue: 6/1/2021