Energy Sector · RES

Financial audit in energy –
experience in RES, – distribution and generation

From wind farms to biomass power plants and distribution companies – I audit energy sector entities with full understanding of sector specifics: long-term PPA contracts, RES assets and capital group settlements.

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10+

Projects in the energy sector

20+

Years of experience

Types of energy entities

100%

Standards compliance

Statutory audit of energy companies

Wind farms and RES

Biomass power plants

Distribution companies

Capital groups in energy

PPA contract accounting

Energy asset valuation

Projects from the energy sector

Selected case studies – energy

Real audit projects completed for energy sector entities. Client names confidential.

Statutory audit

Situation

A subsidiary of one of the leading developers, an energy supplier, required an independent audit of its financial statements. The company supplies energy to housing communities that have a large number of residential customers.

Action

I conducted a full audit of the financial statements in accordance with national auditing standards. Special focus on verifying completeness and accuracy of revenues and correctness of intra-group settlements.

Result

The financial statements received an unqualified opinion.

Unqualified opinion – on time

Wind farm audit

Situation

Several project companies (SPVs) owning wind farms in Poland, part of a renewable energy fund portfolio. Each company as a separate audit entity with assets comprising turbines and land lease agreements.

Action

Audit of a series of SPV companies within one portfolio. Standardisation of the approach to RES fixed asset valuation, verification of lease and service contracts, assessment of impairment tests.

Result

Complete audit package for the RES fund. Unified asset valuation methodology for all portfolio companies.

Audit package for RES fund – multiple entities

Biomass plant audit

Situation

A capital group comprising companies operating biomass-fired power plants. Key characteristics: long-term biomass supply contracts, revenues from electricity sales and green certificates (renewable energy certificates), complex valuation of biomass fuel inventories.

Action

Audit of the financial statements with particular focus on biomass inventory valuation, RES certificate revenue recognition and assessment of long-term contracts for onerous contracts.

Result

Full audit completed with an opinion.

Recommendations implemented by the client

Industry challenges

Key accounting challenges in the energy sector

RES asset valuation and impairment tests

Wind turbines, PV panels, biomass installations – specific depreciation, impairment tests and variable DCF assumptions require deep industry knowledge.

Long-term contract accounting (PPA)

Power Purchase Agreements and other multi-year contracts raise questions about revenue recognition, price risk and financial instrument classification.

Green certificates and CO₂ emission rights

Recognition, valuation and presentation of RES property rights and ETS allowances is an area requiring a precise accounting policy.

SPV structures and intra-group settlements

RES funds operate through dozens of SPV companies – consolidation and eliminations as well as foreign exchange risk management require a systematic approach.

Sector regulations and ESG reporting

New CSRD requirements, EU taxonomy and non-financial reporting are becoming a key part of the audit of energy entities.

Transition to IFRS upon investor entry

Foreign investors and PE funds require IFRS financial statements – transformation from Polish GAAP is a typical transactional requirement in energy M&A.

Do you have an energy company or RES portfolio requiring an audit?

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FAQ

Frequently asked questions

Accounting questions specific to the energy sector – before choosing an auditor and during the audit of SPVs and OZE portfolios.

Does a wind farm SPV need a statutory audit?▾

Yes, if it meets the Polish Accounting Act thresholds for the preceding year: assets >PLN 17m, revenue >PLN 34m, or headcount >50 FTEs (at least 2 of 3). In practice, renewable energy SPVs often have few employees, but the value of turbines or PV panels regularly exceeds the balance-sheet threshold. If a fund or parent company is subject to mandatory audit, SPVs within the group may be covered by the group audit package regardless of their own thresholds.

How does an auditor value wind turbines and PV installations?▾

Renewable energy installations are fixed assets recognised at historical cost, reduced by accumulated depreciation and any impairment losses. A key task for the auditor is assessing the impairment test (IAS 36) based on a DCF model with assumptions about energy output, PPA prices, and the discount rate. Methodological differences between Polish GAAP and IFRS can significantly affect the net asset value presented to investors or project-finance lenders.

What is a Power Purchase Agreement (PPA) and how does it affect the financial statements?▾

A PPA is a long-term energy supply contract at a fixed price between a producer and an offtaker. The critical accounting question is whether the PPA qualifies as: an ordinary commercial contract, a financial instrument (derivative), or a lease. Different classifications lead to fundamentally different balance-sheet and P&L outcomes. The accounting policy for PPAs is one of the first topics discussed during audit planning and requires a careful review of the contract's economic substance.

How does CSRD change reporting obligations for energy companies in Poland?▾

The CSRD Directive requires sustainability reporting under ESRS standards. Large energy companies have been reporting since financial year 2024. The statutory auditor is required to provide limited assurance on the sustainability report, which extends the audit scope to environmental, social, and governance (ESG) matters. For entities financed by banks or PE funds, CSRD and EU Taxonomy compliance has become a key criterion in creditworthiness and portfolio company assessments.

Knowledge base