Synopses & Reviews
It's easy to be entranced by dreams of a world powered entirely by renewable energy, but numerous technological, legal, political, and financial challenges stand in the way of an all-green future. Water, wind, solar, and other sustainable energy sources have great upside, but can be incredibly expensive to develop and implement. Designed to help investors, energy practitioners, students, and anyone interested in green energy to understand the costs, benefits, rewards, and limitations of renewable power today and for the foreseeable future, Investing in the Renewable Power Market evaluates the entire spectrum of energy resourcesfossil-based and renewablelooking at the technical and economic issues that determine their profitability and feasibility.
Sustainable energy sources have become a hot topic in recent years, but until now, no book has explored the market competition between green and traditional technologies. Beginning with an overview of renewable power projects, including a look at the current energy market, the book encompasses everything from analyzing power project economics to in-depth assessments of individual power sources ranging from solar thermal plants to nuclear energy.
A cutting-edge look at the many recent developments in renewable energy technologies, the book explores how sustainable resources compare to energy produced from fossil fuels, extant energy storage technologies, energy transmission and demand-side management, and much more. Energy generated using renewable methods is radically different from other energy enterprisesit is highly regulated and the product cannot be storedand as a result the finances involved are also unique.
Designed to help readers understand the investment implications of these differences and the sure-to-be intense competition between myriad types of energy, the book provides a clear understanding of the current state of the alternative energy industry and the associated financial pros and cons for government, industry, and investors.
Stressing the need to utilize multiple energy resources to meet energy demands, Investing in the Renewable Power Market explains the ongoing market battle between green and traditional sources of energy, the future of the energy market, and how to profit in both the long and short term.
Synopsis
The financial challenges facing clean energy installationsThe path to the widespread adoption of renewable energy is littered with major technological legal, political, and financial challenges. Investing in the Renewable Power Market is a reality check for the mass roll out of green energy and its financial dominance of the world energy market, focusing on real energy costs and global energy needs over the next decade. If green energy is to be truly successful, the market must be properly understood, so that dreams of a green future do not lead to actual energy nightmares.
The first book to cover the major investing challenges and monetary constraints placed on electric power companies as they race to meet their green energy requirements, Investing in the Renewable Power Market explains how generating electricity is totally different from other energy enterprises in that it is highly regulated and its product cannot be stored. This combination greatly affects the finances of renewable power and influences how investors should navigate the energy market. To help the reader better understand the current state of the alternative energy industry, the book:
- Details the challenges facing green energy, such as the fact that it is priced compared to natural gas, which is currently at an all-time low
- Analyzes real energy costs and the global demand for energy over the next decade
- Describes why, in the short term, investment opportunities with renewable power will be with financial and operational restructurings
The green energy market is currently facing enormous challenges, but Investing in the Renewable Power Market explains the real costs of energy, the future of the energy market, and how to profit in both the long and short term.
Synopsis
Praise for Investing in the Renewable Power MarketHow to Profit from Energy Transformation
"While energy demand in the world is soaring and prices rising, building a business case on how to tackle this energy crisis is more important than ever. Fogarty and Lamb skillfully analyze the costs of various energy alternatives, demonstrating both the necessity for and the challenges facing a renewable energy resolution."Finn Lützow-Holm Myrstad, Deputy Director, Statnett SF
"Only when growth in renewable energy capacity and innovations in renewable energy technology are achieved can future generations grow the world economy sustainably and live in prosperity."Lukas Gresnigt, Head of Business Development, Statkraft, one of Europe's leading renewable energy companies
The financial side of green energy technologies
The battle for market share between new sustainable sources and more traditional fuels is sure to intensify, and Investing in the Renewable Power Market is an unbiased look at what the future holds, focusing on global energy needs and costs over the next decade. If green energy is to be truly successful, it must be properly understood, so that dreams of a green future don't turn into energy nightmares.
Explaining how generating electricity sustainably is totally different from other energy enterprises and how this affects how investors should navigate the energy market, this book details the challenges facing green energy, such as the fact that it is highly priced compared to natural gas, which is currently at an all-time low, as well as analyzing the real costs and demands of energy production. Explaining the current state of the alternative energy industry, its potential, and its limits, Investing in the Renewable Power Market is essential reading for investors, energy practitioners, students, and anyone interested in green energy.
About the Author
Thomas Fogarty has spent his entire career managing energy industry project development and financing electric power projects. He has written an editorial in the Daily Bankruptcy Review and has been quoted on the many current challenges facing renewable power.
Robert Lamb is a Professor at New York University's Stern School of Business and a management consultant. He was previously strategy advisor and debt advisor to the New York State Power Authority and, over the past twenty-five years, has developed and taught customized courses for investment banks and corporations, including Goldman Sachs, Deutsche Bank, Merrill Lynch, Morgan Stanley, and Citibank American Express. Dr. Lamb has written numerous books and contributed chapters on the financing of public power projects and is a founding member of Standard & Poor's Academic Counsel of Advisors.
Table of Contents
Acknowledgments
Introduction
Chapter 1 An Overview of Renewable Power
It's All About Natural Gas
Control of CO2 Emissions Is Not Currently Possible
Cogeneration as a CO2 Control Technology
Reality of Demand Side Management
Summary: Renewable Power Plants Compete in a World of Operating Fossil Power Plants and Currently Inexpensive Natural Gas
Chapter 2 Analyzing Power Project Economics
Regulated Utilities
Evaluating a Power Plant
Financing a Power Plant
Hedge Providers
Opportunities with Distressed Renewables
Summary: Understanding the Energy Business Means Knowing How a Power Plant Can Be Financed and Hedged
Chapter 3 The Challenges of Renewable Power Projects
Tax Issues
Passive Loss
Special Exemptions
Master Limited Partnerships (MLPs)
Leveraged Lease Structure
“Partnership Flip” Transactions
New Market Tax Credits (NMTCs)
Summary: Renewable Projects Only Produce a Small Amount of EBITDA They are Dependent on Leveraging the Tax Code
Chapter 4 Risk Assessment for Power Projects
Project Risk Assessment and Risk Mitigations
Pre-Completion Risks/Mitigants
Post-Completion Risks/Mitigants
Summary: For Either Fossil or Renewable Power Projects, Understanding and Managing Risk during Development, Construction and Operation is Critical
Chapter 5 Exploiting Profitability of Distressed and Abandoned Municipal Power Plants
Waste-Fuel Projects Have Key Financial Advantages for Investors
Duties of Professionals in a Municipal Power Plant
The Professional Feasibility Study Engineer
Disclosures of Risks in the Bond Offering Materials
Calculation of Debt Service Coverage
Investment Opportunities at Troubled Municipal Power Plants
Summary: Municipal Bond Backed Power Plants Can Be Area for Investment Opportunity
Chapter 6 Energy Storage
Cheap Energy Storage -- The Most Vital Game Changer in the World
Categories of Energy Storage Technologies
U.S. Regional Multi-Energy Storage Collaborations
Flywheel Technology Energy Storage Has the Lowest Cycle-Life-Cost
Summary: Since Renewable Power Plants Don’t Supply Power 7 Days a Week/24 Hours a Day, Their Future Success Will be Determined by Energy Storage
Chapter 7 Shale Natural Gas and Its Effect on Renewable Power
Fracking
New Attitudes in Natural Gas
Liquefied Natural Gas (LNG)
Cost of Production
Summary: Shale Gas Has Challenged the Economics of Coal, Renewable Power, and Demand Side Management
Chapter 8 Solar PV and Solar Thermal Power Plants
The Economics of Solar Power
Financing Techniques
The Technology
Summary: Solar Power Has Two Main Technologies and Faces a Number of Challenges Including a Large Land Requirement
Chapter 9 Wind Power Plants
Projects Overview
Wind Project Economics
Wind Project Tax Attributes
Investment Tax Credit versus Production Tax Credit
Wind Project Power Contracting
Transmission Constraints
Opportunities with Distressed Wind Projects
Wind Energy Prediction
Summary: Wind Projects Have a Low Capacity Factor and are Dependent on Tax Benefits
Chapter 10 Electric Power Transmission
Overview
Underground Transmission
Bulk Power Transmission
Grid Input, Losses and Exit
High Voltage Direct Current
Controlling the Components of the Transmission System
Load Balancing
Failure Protection
Electricity Market Reform: Costs and Merchant Transmission Arrangements
Additional Concerns
Affects on Health
Government Policy
Super Conducting Gables
Security of Control Systems
Summary: Renewable Projects are Often Located in Remote Areas and are Dependent on Transmission to Serve Load
Chapter 11 Natural Gas Power Plants
Gas Turbine Engines
Benefits of Gas Turbine Engines
Gas Turbines and CO2
Cogeneration
Gas Turbine Operations
Summary: Renewable Projects Have to Compete in a World with Natural Gas Fired Power Plants
Chapter 12 Coal Fired Power Plants
Coal's High Output Capacity
Life of a Coal Plant
Extending Coal Plant Operations
Coal Technologies
Summary: The Technical and Economic Issues of Coal Plants Have to be Understood in Order to Evaluate Renewable Power Plants
Chapter 13 Biomass Energy and Biomass Power Plants
Wood Waste
Economics of Biomass
Summary: Biomass is a Renewable Technology that Enjoys a High Capacity Factor
Chapter 14 Nuclear Power Energy Plants
Global Impact of Japan's Three Nuclear Plant Meltdowns
Comparative Costs of Energy
Key to the EIA Cost Estimates
Nuclear Power Plants' 50 Years of Electricity Globally
Required Upfront Payment for Nuclear Waste Disposal before a New Plant's Approval
Asia Will Lead the Next Shift to Nuclear Power Plant Development
China's New Nuclear Re-processing Is A Vast Expansion of Atomic Fuel
Summary: Nuclear Power Faces a Capital Cost and Ongoing Local Approval Challenge
Chapter 15 Hydro Power Plants
A Unique Renewable Technology
Hydro Power and RECs
Engineering Report
Operations and Maintenance (“O&M”) Costs
Relicensing
Hydro Power Economics
Summary: Hydro Plants Have a Low Environmental Impact and Can Have a High Capacity Factor
Chapter 16 Geothermal Power Plants
Steam Technology
Geothermal Project Costs
Hydrothermal Power Systems
Ground Source Heat Pumps
Standing Column Wells
Enhanced Geothermal Systems
Co-production of Geothermal Electricity in Oil and Gas Wells
Direct Use of Geothermal Energy
Summary: For a Renewable Power Technology, Geothermal Power Plants Have High
Availabilty and Have to Also Compete Against Shale Gas
Chapter 17 Energy Efficiency and Smart Grid
Demand Side Management (DSM)
Rewarding Efficiency
Advanced Meter Infrastructure (AMI)
Increasing Energy Needs
Summary: The Smart Grid Has a Large Future Potential and Also Has to Compete Against Shale Gas
Conclusion
Where Do We Stand Today in Terms of Renewable Energy?
Appendices
About the Authors
Index