Financing Large Renewables Projects
I was on a conference call this morning with people in Los Angeles, New York, Dublin, London, and Istanbul, trying to raise money for a large run-of-river hydrokinetics project in Turkey. I’d have to go back a long way to recall a conversation representing that many time zones.
What I find noteworthy here are two things:
1) Sadly, most of the really important renewables projects are happening outside the US. I’m reminded of this constantly – normally accompanied by a warning that the US really cannot afford to take a backseat in terms of the development and implementation of alternatives to fossil fuels. We’ve done a good job in information and communication technologies, with companies like Microsoft, Google, Oracle, etc., but we need to be equally aggressive – and ultimately successful — in leading the way to clean energy.
Renewable energy legend Bill Paul, who has joined us here at 2GreenEnergy as a financial writer, points out the importance of the European, Asian — even African markets virtually every time we speak. Bill keeps his finger on the pulse of 75 different sources of information every single day — many of which feature projects in some fairly exotic places. When we first met over lunch, he mentioned that it’s likely the Sahara will soon be the site of enormous amounts of solar thermal, providing power for much of Europe, and that this heightens the importance of following the stock exchanges in Tripoli and Algiers. Wow – that’s a lot of information to juggle.
2) The financial mechanics behind deals of this size (the project we discussed this morning is 109 million Euros) are incredibly complicated. I was so lost on this call I didn’t know which end was up. Fortunately, I was able to introduce the parties, mute the phone, sip my coffee, and listen quietly until it was time to thank everyone for participating and hang up. I’m blessed to be associated with people 10 times better at the financial side of this than I’ll ever be.
Calls like this remind me of the first video I made when we started this site, where I asked: “What’s causing the rapid migration to renewables? It’s business. The world is figuring out that there are enormous profits to be realized from pushing toward clean energy.”
It always comes back to who will make or take up the mantle of bringing the groups together,that can move us(renewable entities)forward and work in concert,to create programs that then develop those projects.
The head line caught my eye (Financing Large Renewables Projects) right off; this is in fact the reason our National energy security is slipping away. Even wind developers are finding it harder to finance a project due to curtailment potential of that variable renewable. Its even worse for small hydro generation opportunities because of the federal nexus surrounding waters of the U.S. I’m going to email you a paper with some suggestions aimed at a solution to this problem.
Garth
“What’s causing the rapid migration to renewables? It’s business. The world is figuring out that there are enormous profits to be realized from pushing toward clean energy.”
I whole heartedly believe this is true and for that reason, the role of government should be limited to cheerleader on the side-lines, offering only tax credits to lubricant the transition, but largely to just stand back and keep out of the way of this tidal wave of green development.
I am pointedly saying that carbon credit trading is not needed and would only cause business to do things that are not efficient in the long run. jmo L
L
In Alabama, we are told by the Electric Cooperative Association that renewable energy is not possible here. Of course, we know that not to be the case. But our elected officials (note that I did NOT say “representatives) are not interested in promoting renewable energy to any extent. Alabama Power (not a cooperative) pays “avoided cost” for renewable energy, and cooperatives that are part of the Tennessee Valley Authority (TVA) are allowed to simply opt out if they so choose. My cooperative refuses to allow renewable energy. My elected officials refuse to acknowledge that and refuse to help and so we have a lousy sistuation. As a Board Member from my cooperative told me “We will not take renewable energy until required to by law.” So I say YES, the government needs to be involved in order for the decisions of small-minded bureaucrats to be over-ridden.
That’s sad, but to be expected. States rights and regional variances in attitude — and in law — are a mixed blessing; they create some bizarre effects, to be sure.
The investment picture personally discourages me due to the projects of any import being outside the USA. While we battle in court in the western states over new HVAC lines to bring renewables in from the desert, I read that the North Sea nations are investing approximately $40B for HVAC and HVDC connections. The UK was also stated to be looking at putting more than $160B into additional wind farms over the next 10 years. What discourages me is that the USA seems quite capable of spending in quantities an order of magnitude greater on that which is arguably less beneficial. Our talent, whether it be technical or financial, finds work elsewhere. It would seem that the era of great deeds a la Manhattan Project or Apollo, is now gone for good.