68 MAKALE / ARTICLE looking for feedback on a proposed Renewable Energy Financing Entity- a new form of financing for renewable energy projects. it is expected to provide equity for smaller projects, as well as technical assistance to help cover the projeci preparation costs required in order to raise additional debt finance13. On the regulatory side, Brazil's 'Proinfa' offers 20- year power purchase agreements at set (adjusted) prices for commercially bid wind, biomass and CHP projects, enabling projeci developers to have a secure income stream, a key part of improving the bankability of projects. Meanwhile, China is developing its Renewable Energy Act, including developing mechanisms to meet its renewables target of 10% of installed power generationaround 60 GW-by 201 O, announced during Bonn. Of this, around 50 GW is expected from small hydro, and 1 O GW from wind and biomass: a 49 Euro billion investment opportunity, according to the Chinese government. How investors from ouitside China react will depend to a large extent on the Act that is put in place, and confidence in the reliability of investment contracts. CARBON FINANCE Carbon finance is one area gaining attention as a means to increase project returns by using the Kyoto mechanisms to reward the carbon benefits of small decentralized energy systems. Specialized carbon facilities have already been developed by a number of institutions- both public and private. However, a note of caution is due here. The London- based financiers consulted on renewable energy in emerging markets were somewhat sceptical about the role of carbon finance as a decisive factor in overcoming investment risk- particularly political risk and issues to do with scale and confidence in the projeci developers. it was viewed more as the 'icing on the cake', and most relevant for projects such as landfill gas capture, which can demonstrate high carbon savings, allowing carbon finance to exert a positive resul! on the internal rate of return of the projeci. This just means that, until the carbon price in the market is more certain, and transaction costs of accessing this carbon benefit are reduced, carbon finance may play a limited role compared to the impact of strong national policy frameworks. Taking a look at industrialized nations, the focus remains on the policy framework and incentive structures. The finance sector has some interesting observations on policy experience to date-for example, in the area of the often debated feed- in versus tradeable market incentive structuresfor renewable energy, relevant tora review of European approaches to renewables coming up next year14. Also relevant is the innovation in financing approaches and new product development, e.g. in risk management tools, that are starting to emerge- for example, the emergence of new firms such as Climate Change Capital15. LOCAL GOVERNMENT INVOLVEMENT The importance of municipal, local and state level government engagement in DE is now becoming more recognized, particularly given the innovative approaches now being rolled out at state level in the US. Local government has procurement options and property under management, as well as the capacity to underwrite risk and issue bonds to raise finance. Also, they often have a significant policy and regulatory madate. in California, tor example, the San Francisco Public Utility Commission (SFPUC) has required the solar industry to demonstrate maximized energy efficiency when bidding for state contracts. This has enabled the SFPUC to use the significant cost savings from energy efficiency to cross- subsidize high upfront costs of solar PV, also stimulating technical innovation as a side benefit. While several states are taking lead positions on DE, driven at present by high natural gas prices and concerns over energy and infrastructure security. Federal policy is ata standstill. it is likely to remain so until after the election: the vagaries of the Production Tax Credit tor wind power are stil casting a shadow. This is disappointing, particularly ata time when US finance institutions may be looking for scaled up investment opportunities in new energy technologies. Certainly an audience of 350 attending the Wall Street renewables financing forum16 in the US, indicates an appertite for learning more about market and investment opportunity. Bili Richardson, former Energy Secretary, now Governor of New Mexico, responded by calling fora 'new alignment' between Wall Street and state governments as he announced a 'West Coast' bi-partisan initiative on renewable energy led by himself and Governor Schwarzenegger of California. THETRUEVALUEOFREANDDE Financing is only one element in a wider picture of what is required to significantly scale up the DE, energy efficiency and renewables markets, in both developed and developing countries- from capacity building to regulation. Fundamentally, Tom Lord of the Distributed Energy Financial Group points out that the whole electricity system and market trading incentives and disincentives have to be reconsidered in order to value the full service provided by distributed energy and renewables17. For example, the 'grid cost' ofa consumer is currently not assessed fully, and energy plus infrastructure and reliability costs should all be incorporated. The fundamental failure to recognize the true value of DE and RE is also a conslusion of Shimon Awerbuch's assessment18. He uses finance and portfolio theory to assess the benefits these energy Technologies provide in reducing the overall costs of electricity supply. The volatility of fosil fuel prices exert a financial risk factor into conventional energy delivery that DE and RE can reduce overall, even if upfront costs are higher. Awerbuch comments that talking about generation without factoring in fuel price risk 'is like watching a moive with the sound turned off: you miss a big part of the story.' in conslusion, the level of interest and engagement in this complex area is reaching a new tier- where Money starts to hit the road. 1 EN ERJi & KOJENERASYON DÜNYASI ♦ "Kojenerasyon: Yüksek Verim, Temiz Çevre, Ene~ide Yeniden Yapılanma"
RkJQdWJsaXNoZXIy MTcyMTY=