When acquiring a wind farm, as in other company acquisitions or project investments, developing an appropriate financial model and having decision-makers evaluate its results is the process that most strongly influences the acquisition decision.
Once a financial model’s cash flow has been calculated, determining the payback period, internal rate of return (IRR) or net present value (NPV) is relatively straightforward. These calculations can be performed by anyone familiar with the fundamentals of finance. However, estimating the details required to calculate net cash flow and developing reliable projections require specific expertise, particularly when the people involved lack sector knowledge or experience in wind farm operations.
Financial modelling parameters
We would like to examine some of the financial modelling parameters used in wind energy projects.
1. Electricity sales price
Electricity sales price forecasts are among the most important inputs in a financial model. They are also the parameters most exposed to change and the most difficult to estimate.
Although both investors and financing banks commission price forecasts from specialists, developments in the broader economic and geopolitical environment—such as wars and droughts—can cause significant deviations from these projections. Even when price forecasts are reasonably accurate, regulatory risks may arise, as seen with mechanisms such as Türkiye’s Maximum Settlement Price Mechanism (AUF).
If the wind farm to be acquired is an unlicensed self-consumption project and is being transferred from one self-consuming group to another, it may be more appropriate to value the electricity generated by the plant based on the acquiring consumer’s energy procurement cost rather than average market electricity prices.
For these reasons, the most appropriate valuation approach and the most reasonable electricity sales price forecast for a wind farm acquisition should be determined by examining the specific details of both the transaction and the buyer. The identified factors must then be projected on a transaction-specific basis.
2. Operational expenditure (OPEX)
When wind farm operating costs are estimated by individuals who are unfamiliar with plant operations, they are generally calculated as a percentage of the plant’s revenue.
Although this method may sometimes provide a workable estimate, it may prove inadequate if the plant involved in the transaction has specific characteristics, incentives or contractual conditions. In such cases, the approach can result in forecasts that deviate significantly over the long term.
When estimating operational expenditure, turbine service and maintenance agreements should be reviewed. Lease agreements and incentive arrangements relating to publicly owned land on which the project is located should also be examined, together with the details of transmission and distribution charges.
Particularly in unlicensed wind energy projects, if the power plant and consumption point are located in different distribution regions, the effect of this arrangement on operating costs must be calculated.
In addition to the parameters outlined above, financial models for wind energy projects may include production forecasts, the potential tax benefits of financing for the acquiring company and many other transaction-specific considerations. Including these factors enables a clearer analysis of the project’s expected returns.
Values outside the financial model
Wind energy projects may also include elements that are rarely forecast or are excluded from financial models, despite having measurable value potential. Some of these are examined below.
1. Licence value
During 2025 and 2026, the wind farms most frequently considered for transfer were those whose Renewable Energy Resources Support Mechanism (YEKDEM) eligibility had expired or was approaching its final year.
One of the most debated issues in the valuation of these plants is the value of the existing licence in the event of repowering after the current turbines reach the end of their economic lives.
Many prospective buyers assign zero value to the licence for the repowering period. However, this cannot be considered an appropriate approach for licences issued for a period of 49 years.
During repowering, the existing licence, transmission infrastructure, substation, administrative buildings and access roads can all reduce the capital expenditure required for the new investment.
2. Salvage value
When plants that have been operating for 12–13 years undergo repowering, the resale value of their existing turbines or the salvage value obtained when they are decommissioned is generally excluded from valuations.
From the buyer’s perspective, the proceeds generated from the disposal or sale of these assets may be regarded as additional potential income—the upside of the deal. Failure to calculate salvage value can also make it more difficult for the parties to reach an agreement on the transaction price.
3. Production potential after repowering
There are significant differences between the wind turbine technology available when a 12- or 13-year-old plant was constructed and the technology available today.
Nevertheless, the plant’s production potential following repowering is another factor that is often overlooked during acquisition negotiations.
The non-modelled values listed here are only some of the relevant considerations. Each wind farm may have additional, site-specific sources of potential value or upside. Without examining these elements carefully, a prospective buyer may undervalue the plant and reject a transaction that could offer a genuine opportunity.
Mature Capital: Your advisor in wind farm transactions
Since 2022, Mature Capital has focused exclusively on the wind energy sector, providing wind energy investors with advisory services covering different aspects of wind farm acquisitions and disposals.
In 2023, Mature Capital successfully completed the sale process of an operational 25 MW wind farm. The company has also provided technical advisory services to different investors involved in wind farm acquisition processes in Türkiye, Germany and the United States.
Since its establishment, Mature Capital has advised 15 different investor groups across 20 advisory projects.
Mature Capital will continue to provide high-quality and reliable services to Türkiye’s wind energy investors.
