An Overview of the Development of a Renewable Energy Project.ppt

An Overview of the Development of a Renewable Energy Project And the 5 Major Milestones to Achieve Financing Milestone 1: The Concept What technology, what fuel type? Biomass, wind, solar, waste heat, etc What State/County/City? Choice of state will be contingent upon state renewable policies permitting requirements The Business Model/Pro Formas How much will it cost? Is it cost-feasible? Milestone 2: The Location Local support Zoning--generally Heavy Industrial Rail and/or highway access Size Interconnection with local utility Permitting--DEP, EPA, FERC, etc Milestone 3: The Purchased Power Agreement Primary source of revenues, most important part of a successful project -And the part that the PSC has the most ability to make a difference Term Capacity payments Energy payments Fixed energy payments -Mitigates fuel price volatility to customers -Makes financing more feasible due to less uncertainty in revenue PSC Approval Milestone 4: The Fuel Supply Heat rate of fuel type, in BTUs per ton Tons required per day to operate plant Tipping fees from fuel suppliers Cost of fuel preparation (cleaning, etc) Milestone 5: The EPC Contract Sign turnkey agreement with engineering firm that specializes in EPC Or, a very experienced Developers Engineer could purchase all the equipment from different manufacturers (a boiler from Vendor A, a turbine from Vendor B, etc) Total cost to install per KW Construction time frame The 5 Steps are Completed: Now What? To obtain financing, the renewable project must demonstrate Enough revenues to meet a debt coverage ratio An Internal Rate of Return that is satisfactory to equity investors Debt vs Equity: The Financing Mix High level of competition for equity funding from other states…required rate of return often 12%-30%, higher when more projects competing What Can the Public Do to Help Bring Renewables to Florida? Understand the full costs of NOT having renewable energy (pollution, dependency, upward-trend price volatility)