Renewable + LawSM

#PTC Extension: Scarcity of Utility-Scale PPAs a Big Challenge for Wind Energy in 2013

In the wake of the extension of the production tax credit, my colleague Ed Einowski has analyzed a key challenge – the relative scarcity of available utility-scale power purchase agreement RFPs. Having a PUC-approved PPA in place is generally a prerequisite for securing financing for utility-scale wind projects. Here’s what he has to say:

The extension of the production tax credit (PTC) allows the wind energy industry to move forward with projects in 2013. But the last few years – especially 2012 – have seen relatively few utility-scale wind power purchase agreements executed. Without the assured revenue source of a power purchase agreement (PPA), wind projects will generally find third-party financing – whether debt, tax equity or cash equity – unavailable. And few developers – even those with the financial resources to do so – will likely be willing to risk proceeding with project construction in the absence of a financeable PPA. As a consequence, for most developers the PTC extension presents the immediate challenge of securing a financeable PPA to enable the PTCs to be secured. Given the time it generally takes to negotiate and finalize a utility-scale wind PPA as well as pursue other key items such as turbine supply agreements and engineering, procurement and construction contracts, it will be necessary to move expeditiously.

For a more detailed discussion of the issues involved, read the full article.
 

Trackbacks (0) Links to blogs that reference this article Trackback URL
http://www.lawofrenewableenergy.com/admin/trackback/292491
Comments (0) Read through and enter the discussion with the form at the end
Anchorage AK | Portland OR | Seattle WA
Vancouver WA | Sacramento CA | San Francisco CA
San Diego CA | Lake Tahoe CA | Minneapolis MN
Salt Lake City UT | Boise ID | Washington DC
Telephone: 800.887.8635
Facsimile: 503.220.2480