By J. Michael Powell, President, Renewable Technologies Corporation
These days, we hear a great deal of rumbling about the lack of a well-defined government renewable energy policy and the anticipated expiration of tax incentives (i.e. energy credits) and other programs that will ultimately slow the progress of new renewable energy efforts in this country. Overlap that news with the current risk-averse investment atmosphere and the future looks very dim, if not ultimately discouraging for the prospect of getting new renewable energy projects launched in the future. Why not consider another route, namely, changing the evaluation process and evaluation criteria of potential new projects - whether they are biomass, solar, wind, thermal or other? A fresh approach to securing financing is to obtain a front-end engineering and feasibility study which can offer several benefits at a fraction of the cost of a total project. A few of the benefits this approach would provide include: Provides a definitive or at least a closer indicative budget for the implementation of the project; Identifies the technology and addresses any technical and financial risk up front; Schedules the time line in a clear concise manner for investor, owner/operator and contractor; and Offers early decision making tools.
At The Renewable Technologies Corporation, we have considerable experience in providing "Level One" early engineering, which can be funded through governmental incentive grants allowing for the developer to recoup these costs in the project financing phase. The deliverables for this phase include general arrangement drawings, process diagrams, electrical one line schematics, equipment itemized costs, construction costs based on scope of work definitions, start up and training costs providing the end-user client a very clear indicative picture of the total project cost in real terms. Creating front-end engineering and feasibility studies would lead to the entire approval process becoming more transparent and efficient because the "questionable" projects would have a very difficult, if not impossible, time getting off the ground. And most developers and lenders would be able to avoid the projects that so often go "under water" thus, avoiding negative impact on the image and reputation of projects within the renewable energy sector. This process would enable our government to feel more confident in renewable energy initiatives, and with that confidence, would be more willing to provide genuine incentives and tax exemptions for the initial outlay of funds. This strategy would also be very helpful when drafting and verifying the pro forma justifications for lending sources. All in all-- a better, more innovative and streamlined approach to renewable energy financing will reap many benefits for the environment and the consumer.
Mr. Powell is President of The Camelot Technologies Group, Inc. (CTG) and its wholly owned subsidiary companies located. CTG is a privately held energy services company and respected international leader delivering a diversity of energy management services focused on providing new, decommissioned and refurbished heavy electrical power generation equipment and turnkey EPCM services for commercial, applications and global companies operating in the energy sector.