In complex energy project development, what you don’t see often causes the biggest problems. While rigorous technical due diligence can uncover most risks, there may still be some unknown unknowns hiding in plain sight. The risks could be grid curtailment and congestion, a long-term operations and maintenance (O&M) strategy, warranty gaps, and no decommissioning plan.
All of those aspects can derail a project faster than you can say financial close. So why do they get missed? They can be buried in documents, lost in long-term planning, or even overlooked with the belief that “someone will deal with that later.”
For that reason, these risks are worth calling out. Let’s walk through four commonly missed aspects of technical due diligence and how a more thorough approach can lead to better outcomes.
Grid curtailment and congestion
The two least visible risks that cause the worst damage in energy projects, mostly in renewable development, are grid congestion and curtailment.
Grid congestion occurs where there is too much electricity trying to go through the same transmission lines. The grid gets crowded like a traffic jam. When it’s congested, some projects need to slow down or even stop, and that’s when curtailment happens. This causes a major bottleneck to the energy transition, challenging climate targets, energy security, and affordability.
Grid curtailment happens when the grid is too congested to handle the extra power, or there’s just not enough transmission infrastructure to move it where it’s needed – even when it technically could.
Many developers assume that once a grid connection is approved, they’re good to go. But approval doesn’t guarantee that the grid can actually absorb all the energy during peak generation times. These issues can impact a project’s bottom line seriously. As it leads to lost revenue, undermines investor confidence and can even result in stranded assets.
In Australia, some solar farms are already facing curtailment rates of up to 35–65%, especially in congested zones like West Murray and South Australia. A huge hit to expected returns and one that could have been flagged earlier with proper TDD.
Long-term operations and maintenance (O&M) strategy
Think of an energy project as a long-term project that needs regular care to keep running smoothly for the next 25 to 30 years. You don’t just build it and walk away. That’s where a good O&M strategy comes in, to cover everything from inspections and repairs to performance monitoring, spare parts planning and staff training. All to make sure the asset stays safe, efficient, and profitable.
But here’s the catch: O&M is often treated as a ”later problem.” Many developers assume remote monitoring or basic annual maintenance will be enough, especially for solar and battery projects. That mindset can lead to trouble. If O&M isn’t included early during technical due diligence, it will be hard to fix any risks later on.
Poor O&M planning can cause unexpected breakdowns, long outages, and higher costs. It can also shorten the life of the asset and reduce returns. For example, battery energy storage systems (BESS) are often seen as low-maintenance but actually need hands-on care to avoid failures. Without a proper O&M strategy in TDD stages, even small issues can snowball into major problems.
Spare parts and warranty coverage
Now it’s about spare parts and warranty coverage, the next two most overlooked aspects in many energy projects. Spare parts like inverters, cables, or battery modules are critical components you need to keep on hand. But unlike car parts you can grab from a shop anytime you need, energy infrastructure parts aren’t always readily available.
For projects like BESS, getting new spare parts or replacements for broken ones can take weeks. Meaning long downtime, lost revenue, and frustrated stakeholders. In fact, spare parts delays are one of the top causes of outages in solar and BESS projects.
Warranties, on the other hand, are the promises from manufacturers that their equipment will work as expected. And they will fix or replace it if it doesn’t work. Developers might think that warranties will cover everything or that spare parts will be easy to get later. Well, it’s not. You could end up with expired warranties, missing parts or long delays when something fails.
For these very reasons, technical due diligence should include a close review of spare parts planning and warranty terms. It’s not just about having a backup plan but about making sure the project can recover quickly from broken spare parts.
End-of-life decommissioning planning
Decommissioning is the process of safely removing and disposing of energy infrastructure once it reaches the end of its useful life. Usually, it’s more than years of usage until it shuts down.
And because it’s something that happens decades from now, many developers often don’t think about it during early planning and take it for later issues. Or, they could believe that future owners will take care of it.
But without a clear plan, landowners and communities can be left with:
- abandoned infrastructure
- cleanup costs
- harm the environment
- lead to legal or financial problems.
A well-prepared strategy, developed early through technical due diligence, would cover:
- removing the solar panels and support structures
- recycling or disposing of old equipment
- fixing up the land (e.g. removing concrete, restoring soil)
- safely handling any hazardous materials (especially for batteries).
In Australia, this issue is gaining attention. According to the Clean Energy Council:
“The decommissioning framework provides communities, landholders and governments with certainty that, in the unlikely event that a project fails to meet its end-of-life obligations, landholders, regional communities and governments are protected. It proposes that financial security be ring-fenced via an approved instrument such as a bank guarantee, cash in escrow, surety bond or other vehicle.”
This shows that decommissioning is a technical issue that involves matters of trust, responsibility, and long-term planning. And it’s one more reason why thorough due diligence matters.
How Arche can help you
These factors are usually missed because they are not apparent during initial project development. However, they could easily make or break the longer-term success of a project.
A sound technical due diligence process looks beyond the obvious; not just the grid connection and permitting pathways, but also lifecycle liabilities, operational resilience, and other end-of-life responsibilities.
At Arche Energy, we take pride in going deeper. Our team brings experience, curiosity, and a sharp eye for detail to every technical due diligence assignment, so our clients can move forward knowing nothing important has been missed. Click the enquiry button and find out how we can work with you.