Friday, April 28, 2017

Stories from the NewsWire: Solar and Wind Curtailments

Oversupply and the duck curve are of increasing concern as renewables make up more of the energy mix. In this article from the April 2017 Newswire, Keith Martin, partner in Chadbourne's project finance group, discusses solar and wind curtailments resulting from heavy solar penetration in California and the effects that these curtailments are having on the negotiation of power purchase agreements. 

Whether curtailment payments are excused in power purchase agreements can vary depending on the cause of the curtailments. If the curtailments are due to system operating problems, the offtaker usually does not have to pay. While economic causes of curtailments generally do not excuse payment by offtakers, a new trend is emerging in regions of the United States with higher curtailment risks.  In these regions, such as California, offtaker payments are being excused up to a certain capped monetary value or number of hours before the offtaker's payment obligations begin. Including such terms in power purchase agreements will likely continue as more renewables are added to the grid and lenders, generators and offtakers adjust to this new reality. The full article can be found here.

Tuesday, April 25, 2017

The Effect of FERC's Quorum Issue on Natural Gas Projects


Based on campaign pronouncements, the Trump administration was widely expected to be a proponent of oil and gas infrastructure projects.  This has turned out to be the case for oil pipeline projects such as the Keystone and Dakota Access pipelines. However, an unexpected turn of events has stalled gas pipeline and liquefied natural gas (LNG) projects.  

The Federal Energy Regulatory Commission (FERC or Commission) has final approval authority over interstate natural gas pipelines and LNG export terminals. To give final approval, FERC requires a quorum, which consists of at least three of the five commissioners being present. Since February 3rd, when demoted Chairman Norman Bay resigned, FERC's Commission consists of only two commissioners, thus lacking a quorum and the ability to approve gas pipeline and LNG projects. Until FERC regains a quorum with a third commissioner, many natural gas infrastructure projects will be stalled. Rumors continue to circulate with respect to names of potential appointees and the Senate Energy and Natural Resources Committee has indicated that it is poised for quick action. Nevertheless, the White House has yet to nominate a commissioner, leaving the natural gas industry in limbo.

Thursday, April 20, 2017

Oklahoma Ends Eligibility for State Wind PTC



Oklahoma Governor Mary Fallin signed legislation that ends the eligibility of new wind projects for the state’s production tax credit.  On April 17, 2017, the Governor signed House Bill 2298, which limits the eligibility of the tax credit to wind projects that are placed in to service no later than July 1, 2017.

The tax credit had been scheduled to expire on January 1, 2021. The credit is worth one-half of one cent per kilowatt hour of production. Plants currently in operation will continue to be eligible for the tax credit.

Thursday, September 29, 2016

Mexico: Second Power Auction Results


Mexico has awarded long-term contracts to 23 companies under its second power auction. Officials results were issued on September 28, awarding contracts to buy electricity, capacity and clean energy certificates (CELs) from projects representing 3,944.57 MW, of which 2,891 MW will come from newly installed clean energy sources. Solar projects represent 1,823.97 MW, wind 1,128.5 MW, hydro 68 MW, geothermal 25 MW and combined-cycle technology 899 MW.

Thursday, September 22, 2016

#TBT: Islamic Project Finance: Structures and Challenges



This post is part of an occasional series highlighting a project finance article or news item from the past. It is often interesting and thought provoking to look back on these items with the perspective of months, years or decades of further experience. 

With this installment, we turn to an article written by Richard Keenan, a partner in Chadbourne's project finance group. It was first published in the February 2010 issue of the Project Finance NewsWire.


Islamic finance is expected to make up 30% of the total project finance market in the Gulf Co-operation Council, or GCC, countries by 2012, compared to just over 12.5% in 2006, according to the latest estimates.

Thursday, September 15, 2016

#TBT: Secrets of the Biodiesel Market


This post is part of an occasional series highlighting a project finance article or news item from the past. It is often interesting and thought provoking to look back on these items with the perspective of months, years or decades of further experience. 

With this installment, we turn to an article written by Todd E. Alexander and Marissa Alcala,  partners in Chadbourne's project finance group. It was first published in the November 2006 issue of the Project Finance NewsWire.


The ethanol market showed signs of cooling this fall because of falling oil prices and fears about overcapacity, but interest in new biodiesel plants remains hot.

Thursday, September 8, 2016

#TBT: The Challenges Facing Renewable Energy Developers in Emerging Markets


This post is part of an occasional series highlighting a project finance article or news item from the past. It is often interesting and thought provoking to look back on these items with the perspective of months, years or decades of further experience. 

With this installment, we turn to a transcript of a panel moderated by Todd E. Alexander, a partner in Chadbourne's project finance group. It was first published in the November 2010 issue of the Project Finance NewsWire.

Chadbourne hosted a workshop for the multilateral lending and export credit agencies on renewable energy projects in emerging markets in September in its offices in Washington. The workshop covered a lot of ground. The following is an edited transcript of a panel discussion among three developers whose companies are working on renewable energy projects in Africa and Asia. The panelists are Aparna Rao, vice president of AES Africa Power Company, Brian Kubeck, senior vice president for development at Sithe Global Power, and Jim Scarrow, director of legal affairs for the Americas at SunEdison. The moderator is Todd Alexander with Chadbourne in New York.