Financing Considerations for Renewables and Energy Efficiency Projects. By Guido Alfredo A Delgado August 28, 2006 FUTURE ENERGY SCENARIOS TOWARD SUSTAINABLE ENERGY POLICIES AND PRACTICE IN THAILAND WORKSHOP. FINANCING RISKS. Energy Efficiency Projects Renewable Energy Projects.
Guido Alfredo A Delgado
August 28, 2006
FUTURE ENERGY SCENARIOS TOWARD SUSTAINABLE ENERGY POLICIES AND PRACTICE IN THAILAND WORKSHOP
The cleanest energy
Is the energy not consumed (saved)
And which costs less
Customer Load Profile
THERMAL ENERGY STORAGE:
- Ice at night and chilled water during the day
Managed Load Profile Efficiency Projects
Current Load Profile
Blue: Thermal Red: Pure Electricity
Blue: Thermal Red: Pure ElectricityEnergy Management
4,145,937 Efficiency ProjectsIndicative Annual Energy Savings
May be guaranteed by
CASHFLOW OF SOLAR VERSUS DIESEL Efficiency Projects
CASHFLOW OF SOLAR AND PROJECT FINANCE Efficiency Projects
The challenge of project finance for solar…
…is to move this lump here…
SOURCE OF REVENUE FOR PROJECT FINANCE
Theoretically, the financing can be done if…
…the savings as the source of revenue….
RISKINESS OF THE REVENUES financing.
Riskiness (or quality) is determined by…
Any deterioration in any of these factors, can make this line…
…go down and therefore reduce or undermine the expected savings.
This type of financing… financing.
THE AVAILABILITY PROJECT FINANCE
Project finance for ordinary IPP and grid-based projects have tenors of 12-15 years.
..will require much longer tenors.
MARKET MECHANISMS AVAILABLE financing.
Putting less stress on the revenue
and tenor of the financing
-- Environmental Policy
-- Competition policy
-- Market power
-- Pass through
For EEs, Financing terms
Will depend on regulatory risks
For REs, Financing terms
Will depend on cashflow risks
-- Financing efficiency i.e. breadth and depth
-- Settlements systems to minimize leakage