The concept of risk is nebulous by nature, and may trigger fear or adrenaline in our minds. The nature and number of risks in any given situation is infinite, because risk by definition is the unknown.
In the broad economic sense, risk drives markets: the more uncertain the outcome, the more volatile the market. In the more narrow and specific sense, however, we must not view risk as inherently negative. Instead, we must recognize the opportunity for identification and allocation of risk that is the essence of profitability. How well a company identifies, allocates, and manages risk may determine the result of any given project as well as any number of measurements of successful (or unsuccessful) returns.
The expanding utility-scale solar market in the Middle East and North Africa offers multiple opportunities to maximize returns through skilled risk management. As further developed in this manuscript, risk management is a science as well as an art: a utility-scale solar power plant requires both expertise in the identification and allocation of risk and creativity in the mitigation and management of manifested risks. From project planning through development to long-term operation and maintenance, the study of risk management offers powerful lessons for continued success and expansion of utility-scale solar power.
Read the complete article, "Risk Mitigation through Negotiation and Project Management: Challenges and Opportunities in Utility-Scale Solar Power," coauthored by BABC attorney Monica Wilson and David Bashford, General Counsel, Global EPC/O&M, First Solar, Inc.
This article was first presented at the POWER-GEN Middle East 2014 Conference.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.