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Development Options for Municipal Renewable Energy Projects


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Development Options for Municipal Renewable Energy Projects
Briony Angus
Tighe & Bond

Published in: Technology, Business
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Development Options for Municipal Renewable Energy Projects

  1. 1. Development Options forMunicipal Renewable EnergyProjectsMAPD Annual Conference,June 10, 2011New BedfordBriony Angus, AICPTighe & Bond
  2. 2. Goals of Session■ Start with high-level overview of relevantconcepts■ Summary of alternative development andownership models – impacts to cost, benefit,risk, and process■ Examples from two communities: Lancasterand Dartmouth■ Questions and Discussion■ Not going to get into financial weeds!
  3. 3. Tighe & Bond Overview■ Full-service engineering and environmentalconsulting firm■ Involved in all aspects of renewable energyprojects from planning, economic analysis,design, permitting, to construction■ 100 year history – now assisting numerousmunicipal clients to bring renewable energyprojects from concept to construction
  4. 4. Ownership Structures/Development ModelsMunicipalityOwns &OperatesPrivate/Third PartyOwnershipJointOwnership/”Flip”Multiple versions of these models
  5. 5. Economic Drivers - Cost■ Fixed capital costs■ Variable capital costs■ O&M Costs■ Interest rate for debtfinancing
  6. 6. Economic Drivers -Revenue■ Capacity factor■ Electricity generation price■ Net Metering■ RECS/SRECs■ Land Lease Payments■ Financial Incentives, Grants– Tax exempt financing– Federal ITC/Grant– Accelerated Depreciation– Grants and Low Interest Loans
  7. 7. Risk and Complexity■ Consider changes invariables that could skewIRR:– Construction Costs– Permitting Costs– Electricity prices– Changes in net meteringrates/REC values■ Other potential concerns:– Interconnection queue– Net metering limits– Changes to financial incentives
  8. 8. Simple Municipal Ownership
  9. 9. Municipal Ownership with Other Off-Taker
  10. 10. Public/Private Partnership
  11. 11. Decision Making forMunicipalitiesIn the end – what drives decision making? Ability to leverage funds Access to tax benefits Appetite for risk Desire for project involvement Economics and project scale
  12. 12. Questions or Comments?Founded 1911Creative Engineering Solutions for 100 YearsShelton, CT • Middletown, CT • Portsmouth, NHWestfield, MA • Worcester, MA • Pocasset, MABriony Angus(413)