September 4, 2006
U.S.
U.S.
By Liberty Dones
Reporter
Tuesday, September 05, 2006
Despite the rise in popularity of alternative energy, fossil fuel is not about to bow out from the scene, at least not in the foreseeable future, said visiting financing expert Ven Medabalmi.
In his presentation during the recently concluded Marianas Roundtable – Focus on Energy, Medabalmi said the global installed renewable energy capacity is expected to more than double over the next 10 years from approximately 130GW to 300GW.
In Europe, a leader in alternative energy, the renewable energy market has a current annual value of 10 billion euros.
But Medabalmi said that alternative energy could only enhance and supplement existing energy infrastructure.
“I want to say a word of caution here. I know the excitement [over renewable energy or alternative energy] but it’s not the only solution. Practically, alternative energy would not alter fossil fuel use,” said Medabalmi.
He said it is important to note that “the existing power grid will never be completely replaced in the foreseeable future.”
As such, he said that, although focus is given on the options presented by alternative energy, the focus must also remain on the stability and reliability of the existing infrastructure.
In the Marianas, he said that alternative energy is significantly more attractive due to lack of fuel alternatives like natural gas, nuclear, or coal; high cost of transportation resulting in increased cost of fuel; and potentially abundant source of alternative energy sources such as wind, solar, and wave, which he said are subject to technical feasibility studies.
WIND AND SOLAR POWER
He said wind and solar technologies may be the most suitable for local applications.
He said the development of wind power, a well-established technology, requires a single installation with the maximum installed capacity feasible to achieve the right economics.
He said the private sector can provide financing with the right offtaker agreement.
He said solar arrays can be installed in one of several ways: large scale developments; micro installation for individual home and business; and micro site aggregators.
Medabalmi said large solar array installations are suitable for large scale private developments while micro installations can be financed by government loans or grants, tax incentives and abatements, tax deductions for capital costs, and government-guaranteed loans issued by equipment vendors.
He said under this setup, the utility should provide the ability to sell excess energy back up to the grid.
FINANCING OPTIONS
He said that financing for new energy developments falls into three categories: public; private-public; and private.
Public financing means that the development can be financed purely through cash on hand and issuance of general obligation sovereign debt or special purpose municipal bonds.
Public-private financing means medium- to long-term ventures with key contractual relationships between the public and private sectors, with financing provided primarily by private entity with varying levels of government support.
Full private financing options are less common but do exist in certain scenarios such as airports.
Medabalmi said that in the alternative energy sector to date, the vast majority of financings have been handled by the private sector in the U.S.
URL to article: https://www.wind-watch.org/news/2006/09/04/alternative-energy-wont-alter-fossil-fuel-use/