# Driving returns and reducing risk with data
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-10-06
Category: TECHNOLOGY
Category URL: https://financedigest.com/category/technology
Meta Title: Unlocking an Investable Green Energy Future with Data
Meta Description: Discover how Clir Renewables leverages data and AI to maximise returns on wind and solar projects, ensuring sustainable energy for the future.
URL: https://financedigest.com/driving-returns-and-reducing-risk-with-datahtml

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_Why understanding data is the secret key to unlocking an investable green energy future_

_By_ **_Gareth Brown,_** _Chief Executive Officer,_ [_Clir Renewables_](https://clir.eco/)

Despite the disruption from Covid-19 in the previous 18 months, projections for the solar and wind energy industries are looking strong. According to the [International Energy Agency](https://www.iea.org/reports/global-energy-review-2021/renewables), 270 GW of renewable capacity are expected to be added in 2021 and 280 GW in 2022. While this is a hugely exciting growth trajectory, there are still some impediments to the increased deployment of both wind and solar power.As renewable energy technology has matured, governments have stepped back from underwriting its deployment through tariffs and incentives. This has [created what’s termed a ‘post subsidy’ marketplace](https://www.financedigest.com/azerion-and-seenthis-anz-announce-partnership-to-create-a-more-sustainable-marketplace.html "Azerion and SeenThis ANZ announce partnership to create a more sustainable marketplace").

What this means in practice is that where governments have stepped back, [private capital must](https://www.financedigest.com/private-equity-firms-hungry-for-investment-opportunities-but-business-owners-must-be-cautious-2.html "Private equity firms hungry for investment opportunities, but business owners must be cautious") now come forward. Capital will only take investment [risk if it believes it will see](https://www.financedigest.com/wto-sees-subpar-2023-trade-growth-with-multiple-risks.html "WTO sees “subpar” 2023 trade growth with multiple risks") a return and believes that its investment will be protected during the lifecycle of renewable energy facilities.

Protecting capital and driving investor returns in wind and [solar has become](https://www.financedigest.com/croatias-coast-turns-to-solar-in-bid-to-become-energy-sustainable.html "Croatia’s coast turns to solar in bid to become energy-sustainable") an industry in itself. Firms like Clir Renewables have invested significantly in creating intellectual property that allows access to massive amounts of industry-wide data and combs data using the latest artificial intelligence (AI) and [machine learning](https://www.financedigest.com/machine-learning-engineer-jobs.html "Machine learning engineer jobs") (ML) technologies. By applying AI and ML technology designed by the industry to massive amounts of renewable energy operational data, all project stakeholders, from owners and investors to insurers and lenders, can know where they need to make operational changes, and [manage the performance and risks](https://www.financedigest.com/managing-corporate-currency-risk-the-cfos-balancing-act.html "Managing Corporate Currency Risk: The CFO’s Balancing Act") of assets. As our datasets increase in size and our modelling techniques advance, we find that we can better help guide the operational running of wind and solar projects for [improved project returns](https://www.financedigest.com/daimler-truck-sees-higher-returns-as-supply-chains-demand-improve.html "Daimler Truck sees higher returns as supply chains, demand improve").

For example, to manage the longevity of equipment, which helps keep renewable power prices low, manufacturers will ‘derate’ their [wind turbines](https://www.financedigest.com/pge-signs-wind-turbine-supply-deal-for-baltica-2.html "PGE signs wind turbine supply deal for Baltica 2") — that is, intentionally impede their power output. The unintended consequences of derating can reduce [project power generation](https://www.financedigest.com/diesel-generator-market-projected-to-be-resilient-during-2020-2030.html "Diesel Generator Market Projected to be Resilient During 2020-2030") for extended intervals, rather than the specific time period intended. This is because derating strategies are often employed simplistically.

[Avoiding pitfalls](https://www.financedigest.com/behavioural-pitfalls-can-avoid-starting-fintech.html "Behavioural pitfalls you can avoid when starting out in fintech") like this – and understanding the interplay of the different dynamics that affect project performance – is only possible with deep and granular data. [Data needs](https://www.financedigest.com/leaders-recognise-the-importance-of-green-transport-at-cop27-but-we-need-data.html "Leaders recognise the importance of green transport at COP27, but we need data") to be leveraged holistically, using not just the data from individual wind turbines, but from the entire project site.

If wind power generation is to be intelligently managed for maximum returns, then it’s also important to [understand what environmental](https://www.financedigest.com/how-data-visualisation-is-helping-the-insurance-sector-understand-environmental-risks.html "How data visualisation is helping the insurance sector understand environmental risks") factors are also at play – the effect of nearby vegetation, for example. To provide this understanding, we not only [need to look at equipment, but we need to measure and monitor multiple streams of data](https://www.financedigest.com/why-finance-teams-need-to-go-beyond-numbers-to-an-active-relationship-with-data.html "Why finance teams need to go beyond numbers to an active relationship with data ").

Similarly, [reducing the financial risk](https://www.financedigest.com/how-can-you-reduce-the-risk-of-fraud-in-b2b-payments.html "How can you reduce the risk of fraud in B2B payments?") of wind and solar projects can be achieved through in-depth analysis of their components. Too often there is a reticence among asset managers to embrace data at a deep level, invest further time and resources into its understanding, and then implement [changes to asset management programmes](https://www.financedigest.com/ubs-makes-changes-to-buyback-programme-following-credit-suisse-takeover.html "UBS makes changes to buyback programme following Credit Suisse takeover").

This hesitation may come from a perspective that ‘current performance is good enough’. Yet, with the shift to post-subsidy markets, investors are recognizing the better margins, and [reduced costs](https://www.financedigest.com/home-start-lincolnshire-implements-flexible-unified-communications-service-to-reduce-costs.html "HOME-START LINCOLNSHIRE IMPLEMENTS FLEXIBLE UNIFIED COMMUNICATIONS SERVICE TO REDUCE COSTS") of insurance, financing, and operations, available through an increase in power generation  – and subsequently energy sales – of just one to two percent.

Similarly, across the [solar industry, an assumption that greatly impedes optimal results is the idea that solar energy](https://www.financedigest.com/ahold-turns-to-solar-panels-lowers-thermostats-to-save-energy.html "Ahold turns to solar panels, lowers thermostats to save energy") is simple. Although [solar photovoltaic plants](https://www.financedigest.com/botswana-awards-norways-scatec-first-large-scale-solar-plant-contract.html "Botswana awards Norway’s Scatec first large-scale solar plant contract") may not have as many moving parts as a wind turbine, this does not mean that  data collection – which is essential to understanding asset health – is not challenging.

Gathering solar [data is made complicated through the sheer number of original equipment](https://www.financedigest.com/crowdsourcing-of-data-to-drive-the-patient-handling-equipments-market.html "Crowdsourcing of data to drive the Patient Handling Equipments Market") manufacturers (OEMs) existing in the space. While wind energy has a smaller number of OEMs – owing to the [higher costs](https://www.financedigest.com/boohoo-warns-on-outlook-blaming-higher-returns-and-pandemic-costs.html "Boohoo warns on outlook, blaming higher returns and pandemic costs") of wind turbine development and production – solar has hundreds of different manufacturers. This creates [data choas, as data from their individual](https://www.financedigest.com/balancing-cybersecurity-and-individual-privacy-new-whois-data-protections-in-2018.html "Balancing Cybersecurity and Individual Privacy – New Whois Data Protections in 2018") components  is labelled differently.

Additionally, the unpredictability of solar resources, the lack of standardization across components, plant topography and the quality of project [data can all make it difficult to gain](https://www.financedigest.com/shares-steady-dollar-gains-ahead-of-u-s-inflation-data.html "Shares steady, dollar gains ahead of U.S. inflation data") a clear understanding of the project’s health and performance.

Attempting to translate all of this information into an understanding of [asset performance, and then contextualising it with the other elements needed, eludes most owners and asset managers](https://www.financedigest.com/asset-managers-on-alert-after-whatsapp-crackdown-on-banks.html "Asset managers on alert after ‘WhatsApp’ crackdown on banks"). However, with an AI-driven platform, the time needed to translate and analyze [data can be reduced to hours rather than weeks, as the many streams of data in different OEM ‘languages’ can be translated into a coherent thread that identifies specific](https://www.financedigest.com/who-urges-china-to-share-specific-data-regularly-on-covid-situation.html "WHO urges China to share specific data regularly on COVID situation") actions necessary to improve performance.

As the transition to renewable energy progresses, and we see more projects going live, it is [important that the knowledge around data](https://www.financedigest.com/the-importance-of-xy-data-in-pcb-assembly.html "The Importance of XY Data in PCB Assembly") continues to progress. This will allow projects, and by extension, their [return to investors](https://www.financedigest.com/certainty-in-an-uncertain-world-post-brexit-investors-turn-to-commercial-property-and-fixed-returns.html "Certainty in an uncertain world – post-Brexit investors turn to commercial property and fixed returns"), reach their full potential.At Clir, we have access to over 100 GW of operational renewable energy projects worldwide – helping asset owners, [investors and energy companies enhance their returns](https://www.financedigest.com/investors-seek-higher-returns-as-catastrophe-bond-issuance-slows-during-q2-according-to-aon-study.html "INVESTORS SEEK HIGHER RETURNS AS CATASTROPHE BOND ISSUANCE SLOWS DURING Q2, ACCORDING TO AON STUDY"), ensure the smooth and efficient running of projects, and fulfil their obligations to low carbon power supplies.

With AI-driven insights, renewable energy can easily meet its future growth trajectory – and provide [investors with stable long term returns](https://www.financedigest.com/investor-appetite-for-italy-returns.html "Investor appetite for Italy returns") while doing so.


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