Manuscript - Financing Modeling of Renewable Energy Projects

Characteristic of Renewable Projects
What makes renewable projects different than other electric generation
• More Capital Intensive, economics driven majorly by the cost of capital
• Low capacity factor – risk Driven by resource Assessment
• Need a subsidy through Feed in Tariffs (exposure to changes in volume)
• Problem for financiers is the confidence in the capacity factor estimates
Three types of renewable projects discussed in this book
1. Hydro Power
2. Solar Power
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• Basic design element of hydro facility.
• water at one elevation, and a dam or
reservoir to hold it there
• A lower elevation to which the water
output can be directed
• A hydraulic turbine, connected to a
generator
• These plants convert the potential
energy of the water to kinetic energy as
it changes elevation, then to
mechanical energy as it passes through
the turbine, then into electrical energy
• Very flexible operation
• Change operations quickly
• Large range of operations
• Good resource for ancillary service
• No fuel required
• Very low production costs
• Zero air emissions
• The solar resource assessment depends on
the latitude of the location on the earth as
well as the cloudiness or clearness. It also
depends on the temperature.
• The step by step process (used by
rescreen) includes:
• Compute the declination angle that
depends on the day of the year
• Compute the sunset angle and the hours
of sunlight that depend on the latitude of
the location.
• Compute the sunlight radiation from the
clearness index
3. Wind Power (On-shore/Off-shore)
• Wind is a form of solar energy
• Uneven heating of the atmosphere
• Irregulates in the earth’s surface
• Rotation of the earth
• Wind power turns in the wind into
mechanical and electrical power
• Power available in the wind is
proportional to the cube of its speed