Renewable Energy Finance
Theory and Practice
- 2nd Edition - September 20, 2024
- Authors: Santosh Raikar, Seabron Adamson
- Language: English
- Paperback ISBN:9 7 8 - 0 - 4 4 3 - 1 5 9 5 5 - 8
- eBook ISBN:9 7 8 - 0 - 4 4 3 - 1 5 9 5 4 - 1
Renewable Energy Finance: Theory and Practice, Second Edition integrates the special characteristics of renewable energy with key elements of project finance. Through a mixture o… Read more
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Request a sales quoteRenewable Energy Finance: Theory and Practice, Second Edition integrates the special characteristics of renewable energy with key elements of project finance. Through a mixture of fundamental analysis and real-life examples, readers learn how renewable energy project finance deals mix finance, public policy, legal, engineering and environmental issues. This book investigates the economics of large-scale green power production and incentive mechanisms and how they fit into the global energy industries. It also examines how distributed energy resources such as residential solar and batteries can be financed at the scale needed to play a significant role in the future energy mix.
The authors examine how renewable energy projects get financed and built using modern non-recourse project finance structures. It also highlights recent innovations such as Green Bonds and Sustainability Linked Loans that have emerged in the context of ESG investments. The scope of the book is global, and it illustrates how renewable energy project finance has evolved in various places (such as the tax-equity structures used in the United States, due to the corporate tax incentives used there) to cope with local regulatory and policy environments.
- Supports efforts to achieve environmental sustainability through renewable financing projects and cleaner production techniques
- Provides some real-life case studies to help readers to understand how a project gets financed and built, including the critical interplays between the different financing elements based on how real deals are done
- Offers project finance models on a companion website—for wind and solar projects, for example—based on real investment banking experience that can form the basis for student projects and independent study
- New to this edition: two new chapters on Addressing Technology Risks for Successful Clean Energy Transition and Financing Green Hydrogen Projects bring the text up to date
Graduate and advanced undergraduate courses in Renewable Energy Finance; students in business, finance, public policy, engineering, and law Practitioners in the field of renewable energy technologies, finance, public policy, law, political science, economics, and more.
- Cover image
- Title page
- Table of Contents
- Disclaimer
- Copyright
- Dedication
- Preface
- Acknowledgments
- 1. Financing the global transition to renewable energy
- Renewable energy—Past and future
- Flows of energy in a modern economy
- Financing a low carbon energy future
- The role of project finance
- Organization of this book
- 2. Public policy mechanisms to support renewable energy
- Support renewable energy or tax conventional energy?
- Direct subsidies
- Quantity-based mechanisms
- Price-based mechanisms
- Impact of public policies on renewable energy finance
- 3. Basic project finance concepts
- Project finance defined
- History of project finance
- Comparing project finance with traditional corporate finance
- Limitations of project finance
- Why use project finance?
- Project finance loans versus bonds
- 4. Modeling project cash flows and debt service
- Modeling project cash flows
- Debt sizing for a fully contracted project
- 5. Renewable project finance structures and risk allocation
- Basic project finance structure
- Risk allocation
- Assessment for project risks
- 6. Overview of tax credits in the U.S.
- A brief history of renewable energy tax incentives in the U.S.
- Overview of the Inflation Reduction Act provisions for renewable energy and clean energy projects
- Depreciation benefits
- 7. Tax structures for financing U.S. renewable energy projects
- Illustration of the tax absorption problem for a wind project
- The partnership flip structure
- The sale/leaseback structure
- 8. Financing distributed generation projects
- Introduction to distributed generation
- Net metering
- Business models for distributed generation and financing structures
- Rooftop solar installations for commercial and industrial applications
- 9. Renewable energy in power markets
- Basics of power market design
- Transmission congestion and LMP
- Zonal markets in Europe and elsewhere
- Capacity and ancillary services markets
- The future of energy markets
- 10. Managing transmission costs and risks for renewable projects
- Connecting new generation projects to the grid
- Continuing transmission costs
- US physical transmission rights-based systems
- Dynamic pricing systems
- 11. Alternative off-take strategies and managing merchant risks
- The benefits of traditional utility offtake
- Corporate PPAs
- Commodity hedges
- The proxy revenue swap
- Comparing project off-take options
- Quantifying and managing merchant price risk exposures
- Approaches to developing merchant price forecasts
- Lessons learned from storm Uri
- 12. Project development and valuation
- The renewable energy project lifecycle
- Valuation of renewable energy companies
- Valuation of a renewable energy project under development
- 13. Energy storage financing: Opportunities and challenges
- Types of energy storage
- Value of storage
- Demand response and duck curves
- Tax incentives for storage projects in the US
- Battery business models and financing strategies
- Challenges to the adoption of battery systems based on the experience in the US
- 14. Financing clean hydrogen projects
- Colors of hydrogen
- Hydrogen production methods
- Government incentives and regulations related to clean hydrogen projects
- Challenges to financing clean hydrogen
- 15. Financing offshore wind: Lessons learned from Taiwanese offshore industry
- Estimation of offshore wind energy generation,
- Estimation of offshore wind energy generation in Taiwan
- Overview of Taiwan's offshore wind policies
- Yunlin wind farm case study
- Lessons learned from Taiwanese offshore wind industry
- Learnings from the U.K. offshore wind experience and the blueprint for new entrants
- 16. Renewable energy finance in the international context
- Recent global experience in renewables finance
- India
- Chile
- China
- Uruguay
- Lessons from the international experience
- Appendices
- Glossary
- Index
- No. of pages: 390
- Language: English
- Edition: 2
- Published: September 20, 2024
- Imprint: Academic Press
- Paperback ISBN: 9780443159558
- eBook ISBN: 9780443159541
SR
Santosh Raikar
Santosh Raikar is Managing Partner of Silverpeak Renewables Investment Partners, responsible for leading the firm’s renewable energy sector platform. Santosh has more than 20 years of experience in energy and infrastructure project finance, including renewable energy, oil & gas, power, and midstream infrastructure assets. He was previously a Managing Director in the Renewable Energy Investments Group at State Street where he was responsible for leading a team in originating, structuring, and executing tax equity investments in the U.S. renewable energy sector. Santosh previously worked at Deutsche Bank and Lehman Brothers in Principal Investment areas. He holds two Master of Science degrees, one in Technology and Policy Program from the Massachusetts Institute of Technology and the other in Electrical Engineering from Arizona State University, as well as a BS in Electrical Engineering from the University of Mumbai. Santosh also teaches a graduate course titled “Renewable Energy Investments” at Boston College.
Affiliations and expertise
Managing Partner and Head of Renewables, Silverpeak, New York, NY, USASA
Seabron Adamson
Seabron Adamson is a Vice President at Charles River Associates, a global economics advisory firm, and was formerly a member of the energy and commodities group at Tudor Investment Corporation, a major alternative investment firm. He has advised a wide range of developer, banking, government, and private equity clients on green energy projects in the United States, Canada, and the European Union. He has taught classes on energy finance and economics at Tulane University and on renewable energy finance at the Carroll School of Management of Boston College. He holds graduate degrees from MIT, Georgia Tech and Boston University.
Affiliations and expertise
Vice President, Charles River Associates, USARead Renewable Energy Finance on ScienceDirect