Alternative Energy Funding

Interesting article from May 2011  in the WSJ discussing financing of large alternative energy projects. 

To date the DOE has approved financing for 27 major projects, totaling 30 billion in loan gauarantees.  Of these, 16 projects have been funded, including Brightsource's  Ivanpah project near Las Vegas, currently being constructed by Bechtel.  The Brightsource Ivanpah project is the largest solar thermal project currently under construction worldwide and it will nearly double the amount of solar thermal energy being produced today.  The 845 MW Shepards Flat wind farm in Oregon's Columbia River Gorge is sponsored by GE Energy Financial Services and is funded with a mix of bonds, floating loans, and equity capital, with an 80% DOE loan guarantee.  In the meantime, developers of Cape Wind (the irritant of Kennedys) are looking for a 20 percent equity stake from Barclay's Investments and an 80 percent loan guarantee from the DOE's program for innovative technologies. 

As government support for these alternative projects is bound to wane in the current budget picture, the question will be whether enough of these projects currently underway can prove themselves so private capital will step in to finance future projects without, or with fewer, government loan guarantees.  Let's hope so.

These projects are dominated by technology and financing.  Nevertheless, there is a valuable role to be played by those of us versed in construction delivery models in allocating the risks and responsibilities between the parties.