Clean Energy Financing Forum
by Michael Puckett
Hurricane Sandy was a stark reminder of the fragility of our electric grid. Clean Energy Group (CEG) has produced a series of papers and webinars looking at how a new generation of resilient power systems can help to address this problem. Its Nov. 20 webinar, “Financing Resilient Power,” scheduled to follow the publication of the paper “Financing for Clean, Resilient Power Solutions,” specifically focused on strategies for financing such systems.
There has been a proliferation of distributed solar systems over the last decade. Henry Misas, senior project engineer at Bright Power, Inc. and webinar panelist, reports that the vast majority of these systems are grid-dependent and incapable of supplying power in the case of a blackout.
Facilities that depend on uninterrupted power, from hospitals to financial institutions, typically use diesel backup generators that sit idle until called upon in emergencies. Yet according to Rob Sanders, senior finance director at CEG and webinar panelist, over 50 percent of these generators failed during Hurricane Sandy, costing billions of dollars in damages.
CEG sees a better solution in the form of integrated solar power and energy storage systems. Depending on the system specifications, these systems can meet some or all of a building’s energy demand when the grid is down.
Such systems are ideally suited for affordable housing and assisted living facilities, which could operate on reduced load and allow residents to shelter in place during severe weather events.
Sanders points out that a key advantage of integrated solar and storage systems over backup generators is their ability to provide ongoing value in the form of reduced energy and demand charges along with ancillary services such as frequency regulation.
CEG’s paper identifies four financing strategies that have been successful in funding other clean energy projects and may be suitable for resilient power systems. These are public and private ownership structures; bond financing; clean energy financial institutions; and credit enhancements.
While these strategies are designed to engage all types of stakeholders – including government organizations, developers, financial institutions, and individual investors – one particular group has taken the initiative in recent years: state governments. For full article.