The report of a takeover of Iberwind's wind energy asset portfolio in Portugal by Ventient Energy presents an interesting question to potential investors and service providers. Should you take on a potentially under-performing portfolio at a discounted price tag in an effort to improve the asset quality?

Iberwind, previously owned by CK Infrastructure Holdings Limited and Power Assets Holdings Limited since 2015, has a solid sized portfolio in Portugal with 726MW operational, which currently makes them the 3rd largest asset owner in the country behind EDPR and Enel.

Of their 320 installed wind turbines, Vestas and Nordex Acciona make up the bulk of their portfolio with a combined 87.9% of the total installed base. Vestas models include V47/660, V52/850, V66 1.65/1.75, V80 2.0, V90 2.0 and V90 3.0 while Nordex Acciona models include the N60/1300, N90/2300 and N90/2500.

The average age of their entire portfolio asset is 14.16 years, which is slightly higher than average for the entire Portuguese wind energy market which currently stands at 11.95 years.

Some of the market dynamics behind the deal involve an expiring feed-in-tariff (FiT) and the shift merchant market contracts. The feed-in-tariff (FiT) in Portugal contemplates an initial 15-year fixed tariff followed by a seven-year cap and floor price protection. In 2020, Ventient Energy's Portugal portfolio will begin to transition away from the FiT, with almost the whole portfolio on a merchant market supply basis by 2033.

But more noteworthy, is the fact that while almost 100% of the Iberwind asset portfolio has outsourced OEM maintenance contracts, ~7% of their total asset portfolio also has an Asset Performance Management (APM) service being provided by Onyx Insight.

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