Sustainability, investment strategy, and governance: evaluation of wind energy sector in North-West Spain

Abstract

Climate change is one of the greatest challenges humanity faces globally. For this reason, governmental efforts to reduce emissions of polluting gases have multiplied in the last decade. Against this panorama, petroleum companies have adopted a strategic policy focused on energy diversification, intending to contribute to sustainable development. In the case of Spain, wind energy has been one of the renewable energies that have attracted the most investment from petroleum companies. In particular, this trend is especially acute in Galicia (a region located in the northwest of Spain), since its biophysical conditions and, above all, its institutional framework for the promotion of photovoltaic energy has aroused the interest of petroleum companies. The objective of this article is to perform a feasibility analysis of an average wind project in Galicia. through the calculation of the initial investment, the necessary financing, and the preparation of balance sheets and profit and loss accounts. For this purpose, the methodology used is based on the preparation of a feasibility plan, through which the necessary investment is analyzed and the flows of receipts and payments generated by the company are considered. In this way, this analysis is intended to be useful for companies that are considering the appropriateness/inappropriateness to carry out this type of investment. The results show a high internal rate of return, which indicates the high profitability of the project.

Keywords:

• Wind energy
• climate change
• sustainability
• economic-financial analysis

JEL CODES:

• Q00; Q28; G18; P18

Author contributions

Conceptualization, R. F-G.; methodology, R. F-G.; validation, R. F-G, N.T., F.P.G. and R. F-G.; formal analysis, R. F-G and N.T.; investigation, R. F-G.; resources, N.T and F.P.G. and F.R.P.; data curation, F.P.G.; writing—original draft preparation, R. F-G. and N.T.; writing—review and editing, R. F-G., F.P.G. and F.R.P.; visualization, F.R.P. and N.T. All authors have read and agreed to the published version of the manuscript.

Disclosure statement

No potential competing interest was reported by the authors.

Additional information

Funding

This research has been funded by the Consellería de Cultura, Educación e Ordenación Universitaria of the Xunta de Galicia in Spain the postdoctoral grant ED481B2018/095 and the following grants: ED431C2018/48 and ED431E2018/07. In addition, this publication is part of the Spanish R&D&I project RTI2018-099225-B-100, funded by MCIN/AEI/10.13039/501100011033/and FEDER ‘A way of doing Europe’. The authors are also grateful for the valuable contributions made by Juan Carlos López Rodríguez.