Australia is at the forefront of the global renewable energy transition, but with every opportunity comes risk. The race to meet net-zero targets and expand solar, wind, and energy storage infrastructure presents significant financial and commercial risks that project owners, investors, and contractors must address.
From cost overruns and regulatory hurdles to procurement risks and market fluctuations, understanding and quantifying risk is critical to project viability. At Lewis Woolcott, we specialise in helping renewable energy developers, financiers, and asset owners navigate these challenges with data-driven risk assessment, financial valuation and strategic mitigation strategies.
Understanding risk in renewable energy development projects
Renewable energy projects, despite their environmental and economic benefits, come with unique risk factors that can impact costs, timelines, and financial returns. Key areas of risk include:
1️. Financial and capital investment risk
The financial viability of a project hinges on accurate risk valuation. Investors and asset owners must account for:
- Escalating material costs – Fluctuations in commodity prices (e.g., polysilicon for PV modules) can impact procurement budgets.
- Grid connection delays – Australian Energy Market Operator (AEMO) regulatory requirements can result in costly hold-ups.
- Contractual risk allocation – Poorly structured EPC contracts can expose developers to unexpected liabilities.
- Procurement risks – Long lead times for wind turbines, solar panels and battery storage (BESS) can disrupt project schedules.
Lewis Woolcott applies financial risk modelling to quantify exposure and ensure projects are structured for long-term profitability.
2. Time vs. cost: the scheduling challenge
A project’s schedule risk directly impacts financial outcomes. Delays mean higher costs, particularly when tied to liquidated damages clauses in contracts. Common scheduling risks include:
- Construction and labour shortages – Competition with infrastructure projects for skilled workers can cause project slowdowns.
- Access and logistics issues – Remote project locations require strategic planning for materials, transport, and site access.
- Regulatory approvals – Delays in environmental and developer approvals (DAs) can disrupt timelines.
- Design changes – Modifications due to site conditions, geotechnical factors, and stakeholder requirements can lead to rework.
Lewis Woolcott’s schedule risk analysis (powered by LWARE Logic+ ) helps project owners and contractors anticipate and mitigate scheduling delays before they escalate.
3. Contract and procurement risk: structuring for stability
Poor contract structuring is one of the leading causes of financial loss in renewable energy projects.
EPC contracts must clearly define:
- Who bears financial risk for delays and overruns?
- How is contingency allocated to cover uncertainty?
- Supplier obligations and performance guarantees.
- Grid connection risk management.
At Lewis Woolcott we help clients negotiate better contract terms by quantifying commercial risk at the beginning, and structuring agreements to protect the project’s financial interests.
Case study: Preventing a $10M cost overrun
A renewable energy developer approached Lewis Woolcott to assess a 1GW solar and storage project facing potential grid connection delays and cost escalations.
Findings:
- $10M+ risk exposure due to unaccounted for AEMO grid hold-ups.
- Inadequate contingency planning—original budget underestimated procurement delays.
- Contract gaps left the developer financially exposed to supplier performance risks.
Outcome:
- Revised financial model with corrected risk contingencies.
- Renegotiated EPC contract to shift risk appropriately.
- Implemented schedule risk controls to prevent further overruns.
Result: The project was delivered on time and within budget, avoiding major financial losses.
Mitigating risk, maximising returns
Every renewable energy project carries risk, but with the right financial and commercial strategy, risks can be controlled, costs managed and returns optimised.
At Lewis Woolcott, we specialise in:
- Quantifying risk exposure and financial viability.
- Structuring contracts to protect investors and asset owners.
- Using risk models to forecast project success.
- Developing commercial strategies that maximise returns.
Let’s talk risk. Get in touch to ensure your next renewable energy project is structured for success. Speak to an expert – contact us.