The Effects of Risk Management on Bioenergy Projects

Introduction: The sheer volumes of research studies indicate that effective risk analysis has a profound effect on the early financing stages of bioenergy and other renewable energy projects, its investments, and the... [ view full abstract ]

Introduction: The sheer volumes of research studies indicate that effective risk analysis has a profound effect on the early financing stages of bioenergy and other renewable energy projects, its investments, and the decision-making mechanism for risk transfer to adopt. However, there are little research data for project developers to utilize during initiation and planning phases of these projects. A better understanding of the risks associated with bioenergy projects can help policy makers, project developers and risk management experts to deploy more clean energy. Methods: In this study, the researchers focus on the quantitative used of online survey method. Questionnaire was develop using online survey portal and the survey web link emailed to participants who are involved in renewable energy projects and risk management followed by an in-depth comparative analysis between the collected primary data and the secondary research information gathered from relevant existing literature. Results:  The study found that, the risk factors most associated with bio-energy projects are; economic (flagged by 47.73%) and environmental risks (flagged by 45.45%). These outcomes are consistent to the International Energy Agency IEA findings that economic and socio-environmental risks have the highest impact on Return on Equity (ROE) and debt-leverage capability of biomass technologies and projects.  Discussion: The effects of risk management on bioenergy projects begins from initiation and planning stages (that is, to attract investment and avoid negative financial impact on the projects).  Moreover, in project implementation it plays an instrumental role of identifying, controlling and mitigating inherent risk to boosts project success. It was recommended that bioenergy project managers and developers should use systematic risk management methods such as RBS (Risk Breakdown Structures) for better risk identification during the risk management cycle.