On 8 July, the sale of two solar plants in Badajoz to a fund was announced. They were commissioned in 2010 and 2011. According to the seller, they have between 15 and 16 years left in the regulatory period. About fifteen years of the past, about fifteen of the future and a new owner.
Such an asset survives its owners and almost all its directors. Independent directors of listed Spanish companies average 5.2 years on their boards, the lowest tenure of all categories, according to the CNMV. The law sets the limit: four-year terms at most and, after twelve, the director is no longer counted as independent.
Buyout funds today hold their portfolio companies for about seven years, according to Bain, compared to five or six between 2010 and 2021. A battery comes with capacity guarantees of ten, fifteen or twenty years, according to DNV.
Five, seven and twenty. Three clocks in the same room that almost never look at each other. None is a defect. The problem is the difference between them. Rarely does it have an owner on the board, and it is paid on the day of sale.
This is not an isolated case. In June, another fund agreed to buy 18 mini hydropower plants, 64 MW, for 66 million and with no debt. This year, funds have entered solar operations and hydropower. What they buy are years.
The battery is the cleanest case, because its schedule is written. As of 30 September, 322 MW of batteries were operational in Spain, according to Red Eléctrica. With grid access permits, there were 34,166 MW of batteries. Each megawatt of that difference that gets built will need a board with a twenty-year memory.
A battery loses capacity each year and the guarantee sets how much it can lose. DNV reminds us that this loss is not linear and that the operational data of the battery are what matter in a warranty dispute. Even the regulator measures by halves. The capacity market order, published on 17 September, directs the new investment contract to half of the useful life. With a cap of fifteen years. The rest of the life falls outside the contract.
In the third year of a seven-year holding, there are decisions that are postponed without anything breaking. Maintenance that is stretched. A reserve for replacing cells that is not allocated. An income contract that is left to come. A connection right that is taken for granted without checking that it includes the right to charge from the grid. None is serious on its own. All improve the accounts of year three.
There is no bad faith. There is arithmetic. Bain calculates that today a buyout needs to grow between 10% and 12% per year in Ebitda for the multiple that it used to achieve with 5%. By that measure, an expense not incurred in year three is Ebitda in year three.
The buyer in year seven collects it. It does not discount what it knows: it discounts what it cannot verify. If the operational history does not demonstrate that the guarantee was respected, the guarantee is worth less. If the cell replacement is not allocated, the price drops by its amount and by a margin of doubt. If the income contract expires the following year, what remains of life is valued as market. What is postponed in the third year is discounted by the buyer in the seventh.
I say this without reproach. A fund does what it promised its investors: buy, improve and sell within a timeframe. No one needs to be replaced. It is enough that someone has the difference on their agenda and brings it to the table each year, not in the seventh.
That is the work of the board, and it is valuable in a listed company, in a portfolio company of a fund or in a family business that will someday be sold or inherited. In 2025, listed companies appointed 190 independent directors and 70 were new arrivals. In the energy, water and primary sector companies, they make up 54% of the board.
A board already has finance, law and auditing. It also benefits from someone who has built and sold an energy company. It reads the annual report backwards: it does not look at what was done to reach the accounts, it looks at what was left undone.
The proposal fits in one line: one hour a year, alongside the budget, and four questions. One: What portion of the asset's life is outside our plan, and who has it on their agenda? Two: What do the operational data say against the guarantee curve, and is the replacement allocated? Three: How much of the income is contracted beyond the exit year? Four: if a data room were opened tomorrow, would permits, contracts and data coincide in title, capacity and right to charge from the grid? How long would it take us to deliver it?
These are the questions the buyer will ask. A board that reviews them each year sells better and with fewer surprises. And if it does not sell, it is still useful: the battery that reaches year twenty is the one someone took care of in year three.
No director governs a twenty-year asset from start to finish. A good board is measured by what it leaves prepared for the next one.
