utility-scale power in Texas
Looking for resources to prepare for a case study presentation.
There are some inputs which i can already think of that would influence the investment like interest rates, but I am looking for resources to learn about any other drivers that may not be so obvious, or where I can find a baseline to compare these types of projects' returns and drivers like permitting processes to those from other states or projects.
I assume the return required for investing in a project would be lower than the return required to acquire the whole thing, but I don't know by how much difference it would be.
Additionally, in general, how do construction companies/developers deal with construction overruns or delays getting permits etc? Do they need to get some special kind of financing? I assume they have some costs added if the construction is delayed.
For utility-scale power projects in Texas, here’s a breakdown of resources and insights to help you prepare for your case study presentation:
Key Drivers and Resources:
Interest Rates and Financing Terms:
Permitting Processes:
Construction Overruns and Delays:
Return Expectations:
Market-Specific Drivers:
Resources for Learning:
Addressing Construction Delays:
By focusing on these drivers and leveraging the resources mentioned, you’ll be well-prepared to tackle your case study presentation. Good luck!
Sources: Interviewing For Infrastructure Investment Roles, Interviewing For Infrastructure Investment Roles, Q&A: Director of Energy Trading, Renewable Energy PE Overview, Renewable Energy PE Overview
There’s a bunch of materials out there on Infra and Project Finance (the kind of financing used to develop most of these infra projects). Specific revenue drivers differ depending on what kind of project it is (gas fired, wind, solar, BESS, or something more exotic) but include production factors like wind speed/solar irradiance (in wind and solar), availability and cost of fuel (conventional power), offtake structure (PPA vs Merchant or some combination of both), PPA structure (ie how is it settled, is there upside sharing), as well as various O&M and operational aspects. Let me know if you have any specific questions and I’ll see what I can do.
Texas specifically has had some interesting stuff with negative power prices, which is definitely a risk you’d want to look into if you’re looking at a project relying heavily on merchant. Additionally you’ll want to look at availability requirements in the PPA and how those can lead to damages or events of default.
Thank you - very helpful.
I read that tax equity is typically 35% of a capital stack but I don't know how much is provided by back leverage and what benefits back leverage have - usually debt is paid before equity but in this case debt is paid after tax equity from whatever the sponsor gets
Sry meant to respond but getting jammed rn. I’d look for project finance & PUI primers as well as resources from agencies like NREL and state level counterparts like NYSERDA. Permitting and IX are all really sector + geography specific, so it might be harder to find exactly what you’re looking for but I’ve found the aforementioned resources to be very helpful.
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