Articles from 2024
Articles from 2023
Articles from 2022
Articles from 2021
Articles from 2020
Articles from 2019
Articles from 2018
Articles from 2017
Articles from 2016
Articles from 2015
Articles from 2014
Articles from 2013
Articles from 2012
Articles from 2011
Articles from 2010
Articles from 2009
Articles from 2008

Is the Future Alternative?

In 2016, Costa Rica ran for an unbroken period of more than two months on renewable energy alone – the second year in a row the country had achieved this feat. In May 2016, Portugal powered itself for four-and-a-half consecutive days without fossil fuels. In both countries, the lights stayed defiantly on.

Predictably, there is some dispute about what all this means. Sceptics argue that Costa Rica is a small country with an economy that relies far more on agriculture and tourism than power-hungry industry, and is hardly representative of global energy requirements. Portugal, they add, just got lucky with the weather.


While there is truth in both arguments, these achievements have been widely celebrated as the most tangible results to date of a period of record global investment in alternative energy sources.

Renewable energy can no longer be considered a fringe interest, by either policy makers or investors. According to the latest REN21 Renewables Global Status Report, 2015 saw the largest increase in renewable energy production capacity ever, with an estimated 147 gigawatts (GW) of new capacity added globally. And that despite an unfavourable market. “What is truly remarkable about these results is that they were achieved at a time when fossil fuel prices were at historic lows, and renewables remained at a significant disadvantage in terms of government subsidies,” says Christine Lins, executive secretary of REN21.

Renewable energy provided an estimated 19.2% of global final energy consumption in 2014, with wind, solar, hydro, geothermal and biomass energy making up the vast majority of that total. But some countries are running way ahead of the curve. In Costa Rica, Portugal and elsewhere, renewable energy has become a major contributor to national economic wellbeing, rather than simply a way to meet environmental targets.

“The importance of alternative energy to the national economy is huge,” says Omar Pérez Rosales, managing partner of UHY’s member firm in Costa Rica, UHY Auditores & Consultores S.A. “In Costa Rica, 96.9% of energy generation is from clean energy. And that figure will grow, because the interconnection between the countries of Central America encourages them to sell electricity between them.”


Uruguay is another Latin American country that sees renewable energy as an economic opportunity rather than a burden. The renewable sector has exploited a supportive regulatory framework and the country’s favourable geography and climate to run ahead of the pack. In 2015, 92% of Uruguay’s power generation was derived from renewable energy.

“Uruguay stands out as the developing economy with the most favourable framework for investment in clean energy,” says Hugo Gubba, managing partner, UHY Gubba & Asociados, Montevideo, Uruguay. “Investment law promotes clean energy, allowing industries that invest in renewable energy to finance up to 80% of that investment through taxation exemptions.”

The country is reaping the rewards of that support. Once a net importer of electricity, with a domestic capacity that could not meet demand at peak times, Uruguay is now a net exporter, selling its surplus mainly to Argentina. A new interconnection with Brazil will provide opportunities to supply electricity to the world’s ninth largest economy. Uruguay’s renewable energy supply is diverse, with the country generating power from wind, solar, hydro and biomass sources. This has created a range of opportunities for professional services companies like UHY Gubba & Asociados.

“We work specifically with clients in the wind energy sector, and they receive the very best advice and guidance in financial and tax planning, business advisory and audit services,” says Hugo. The advance of the renewables sector presents the company with the challenge of widening its specialist knowledge. “We must continue to specialise in renewable energy projects and we are working hard to acquire unique expertise in the industry.”

Around the globe, UHY member firms are doing the same, in recognition of alternative energy’s growing importance. The renewable energy companies and projects served by UHY’s global network are hugely diverse. In Canada, for example, UHY McGovern Hurley LLP in Toronto provides special audit services for the Smart Grid Fund Project, a government

scheme to support electricity grids in Ontario which is building one of the most advanced electricity grids in the world, with the aim of reducing energy use. The government supports various research projects, and UHY McGovern Hurley LLP audits the activities of recipients, helping to ensure that expenditures are in accordance with government requirements.

In the Philippines, UHY M.L. Aguirre & Co CPAs has several alternative energy clients, reflecting the expansion of the renewables sector in the country. One is the Restored Energy Development Corporation (RED), an innovative company that generates and supplies energy from biomass sources, and specifically rice husks. RED also constructs biomass power plants, and can name several major Filipino and international corporations among its customers. In fact, UHY M.L. Aguirre & Co CPAs has developed something of a speciality in the biomass sector, and also provides services to a Dutch and Filipino joint venture aiming to construct power plants fuelled by bana grass, a unique variety of elephant grass.


These kinds of projects are increasingly essential to the wider Filipino economy, helping to provide secure power supplies in rural areas, create jobs for local workers and promote the growth of the country’s SME sector. But Michael L. Aguirre, managing partner at UHY M.L. Aguirre & Co CPAs, believes companies starting out in the sector need to enlist the support of professional service providers with specialised expertise.

“Companies in the alternative energy sector should seek the support of professional service firms that can give them proper guidance as to the fiscal and non-fiscal incentives available,” he says. “They also need proper evaluation of the feasibility of their projects. With RED, for example, the payback period is projected to be a decade or two.”

Compliance with local laws must also be considered, with companies facing a raft of regulations that can differ between countries and even regions. The alternative energy sector is relatively new, and start-ups desperately need knowledgeable support if they are to build solid foundations. That client need creates opportunities for UHY member firms around the world too.


In breezy Northern Europe, UHY’s member firm in Denmark, inforevision A/S, is working with Connected Wind Services, the largest provider of wind turbine repair, maintenance and monitoring services in the region. Inforevision provides merger and acquisition services, drill-down financial analysis, and auditing and accounting services to the company. According to Carlos Christensen, CEO of Connected Wind Services, the company values the personal service they get from inforevision, alongside sector-specific knowledge. “Inforevision has an ability to make us feel like their only customer. There is always time for an urgent analysis, and there is always a thorough understanding of our business and our needs,” he says.

In sunny Italy, meanwhile, the focus is more often on solar energy, and the work of UHY Italy’s audit and assurance firm, UHY Bompani Srl, is evidence of a sector commanding considerable interest and investment. The company has undertaken six due diligences on alternative energy companies in the last five years, reflecting a market that is moving into a new phase of consolidation. UHY Bompani Srl has also worked for Chinese investors looking to sell solar products locally under an Italian brand, which again appears to indicate a sector in good health.

But managing partner Andrea Fantechi believes the picture is more nuanced, at least in Europe.

“In the last ten years, the proportion of alternative energy in total energy consumption in Italy has increased from 15% to 38%, but this growing trend is significantly reducing because of a cut in incentives for building new alternative energy productions plants,” says Andrea. His caution is borne out by the REN21 report, which finds that, while developing countries continue to pour money into the sector, renewable energy investment in developed countries declined by 8% in 2015. The most significant decrease was seen in Europe.


There is clearly a danger that the renewable energy boom could stall, especially in European countries where worries around Brexit are forcing governments to rethink financial priorities. For all its recent progress, the renewables sector is still heavily reliant on favourable legislation and government incentives. Arthouros Zervos, chairman of REN21, has talked of a sector “barrelling down the tracks, but running on 20th-century infrastructure.”

Nevertheless, nobody denies that the direction of travel for renewable energy is set, even if it faces short-term challenges. In Europe, where those challenges currently appear most acute, the sector needs all the help it can get. That is especially true when considering that many alternative energy companies remain limited in both size and experience.

“Very often, these companies are start-ups – though obviously, there are big players too – that require general help in transforming an entrepreneur’s idea into a solid business,” says Andrea Fantechi. “That means finding investors to finance the project, building business plans, introducing accounting, verifying tax incentives and more.”

The global UHY network is ideally placed to deliver these services, thanks to the increasingly deep pool of sector-specific knowledge that it can draw on and share.

Notes for Editors

UHY press contact: Dominique Maeremans on +44 20 7767 2621

Email: -