Research of default risk of renewable energy projects: Global and Russian practice

Abstract

The author was tasked to investigate the dynamics of default level of renewable energy (RES) projects, to conduct a comparative assessment in the global and Russian markets and to study the causes of emerging trends. The article provides a detailed analysis of investments in the global RES market, the contribution of public and private capital to the sector development. Based on the findings of a comprehensive study of the market, the potential of RES development is described. A methodological approach to assessing the risk of RES projects was proposed that is based on logit-modeling and taking into account the sector specifics. Calculations were made on the example of Russian and foreign projects, taking into account the industry and regional specifics. The assessment showed that although the Russian market is characterized by a jump in default level, but by the end of the project, the indicator decreased; in the foreign market the risk gradually increased. This trend is due to the peculiarities of state support for these projects. The results will be used for studying the dynamics of risk for projects without state support, and for complementing an approach to the study of competition in the global market. © 2020 WITPress. All rights reserved.