BOT mode is expected to support large-scale development of solar-thermal power projects

Polaris solar PV net news: recently, Israel has two solar-thermal power generation projects to complete BOT business model for project finance, Israel Government to protect investors in solar thermal power station power station power station operating income within the first 25 years, but in return, 25 years after the solar-thermal power plants came to Israel Government. This was in the era of climate change issues, through BOT this typical case of old-fashioned ways to solve new problems.

BOT financing mode (that is, build ~ business ~ transfer) is one of the many ways of project financing, also known as concession on invest and financing mode in our country. General has host Government or local government through chartered right agreement, will project grant project sponsors for dedicated of project company, by project company is responsible for project of voted financing, and built, and operating and maintenance; in provides of Chartered period within, project company has investment built facilities of ownership (but not full meaning Shang of ownership), allows to facilities of using who charged appropriate of costs or using the facilities obtained proceeds, to this recycling project voted financing, and built, and operating and maintenance of cost costs, reimbursement loan and obtained must proceeds Franchise expires, the project company will be facilities transferred to the host Government.

BOT mode is often used for infrastructure such as bridges, roads and other public facilities in the project. For most renewable energy developers, that when investment project free delivery will be to the project’s business model seems to be unattractive by the local government. Once investors to recover items after they have invested project is located, is likely to usher in a new era of very low electricity prices. For developers, it no longer has the right to operate the project sustainable access to long-term gains.

But the BOT is to assist with better approaches to project development and financing issues, with government participation and commitment of the Government to project a certain income, the project’s risks are much lower, conducive to the party financing the project. BrightSource and abenge company recently came to this kind of BOT model in Israel completed Ashalim two solar-thermal power project financing.

Abenge will develop a total investment of about $ 1.2 billion, installed capacity 110MW, including storage system the trough solar thermal power generation projects. The project initially through the overseas private investment Corporation financing of $ 250 million. BrightSource will develop a capacity for 121MW does not contain thermal storage system of solar thermal power Tower, which projects a total investment of about us $ 820 million, composed of Alstom, BrightSource and Israel NOY energy infrastructure investment fund funding three joint venture companies, the three parties in proportion to the amount of Alstom (25.05%), BrightSource (25.05%) and NOY energy infrastructure investment fund (49.9%).

In this BOT’s business model, these solar-thermal power project, in the project put into operation within the first 25 years of operation rights and achieve recovery of funds and certain income, ownership of local government after the expiration will be withdrawn without compensation projects.

To sum up, solar-thermal power BOT business model is actually done by the developer is responsible for financing and construction of thermal power stations, and then have the right to operate the power station for a limited time, proceeds obtained through the sale of electricity to repay investors, certain operating period is over and then deliver the power to the Government.

Was used for hydropower project

Usually BOT business model is often used, such as the building of roads and other public infrastructure. But in fact as early as in the early 20th century, the most famous country began construction of this model a number of renewable energy generation facilities, such as water and electricity, and so on.

BOT model for countries that want access to cheap energy more attractive. As one expert described it: “developers in the absence of government funding to support independent projects under construction, and provides operations after the time limit is up, the developers would have the right to free return of your project to the Government. Government can continue to operate through the project access to cheaper electricity prices. ”

Finland Vaisala (VAISALAOY), global Manager for energy services PascalStorck said: “in the past, there are many places that have some State-owned infrastructure operated by private developers or returned to the country’s infrastructure. “The company’s recent acquisition of Seattle 3TIER 3TIER designed specifically for photovoltaic and wind energy forecasts and assessments, but also for BrightSource solar thermal projects company in Ashalim service.

PascalStorck added: “If these solar thermal power stations operating life is very long, BOT business model would bring long-term social and economic benefits, because of the construction of these power stations are using private money, and power delivery of local Government to provide cheap electricity supply. ”

Storck says himself from these by BOT benefit business model construction of renewable energy projects. Boehner Mr hydropower station that run electrical authority is the United States currently sell electricity one of the cheapest power plant electricity price. Storck uses of power is provided by the State-owned hydroelectric power station. Storck said: “I live in United States Pacific Northwest, is a good example, we use starts at about 5 cents per kilowatt hour of electricity. ”

But is, unfortunately, is where we need to use this model to address public discontent when the national public utility services, need to resort to this mode when creating a liveable environment for the future, the application of BOT model in the field of renewable energy but was gradually abandoned. Precisely because of this reason, Israel innovative BOT business model to boost a new round of development of renewable energy projects is a very exciting idea, via which you can address the global financing of renewable energy projects.

Responsible Ashalim project financing Israel law firm believes that adopt BOT model to development of solar-thermal power project is not their intention. Israel BenNathan&Co UriNoy said, at first does not take into account the BOT business model to fund projects, this financing model more often used in road and bridge projects.

Noy told journalists: “Israel is the first to apply this model to the solar-thermal power project on the country, over the past many years Israel will finance this model successfully applied in a number of other renewable energy projects and in the construction of public facilities. ”

On BOT pattern in the renewable energy project development success stories

If a landlord development project has been in operation for 25 years to be delivered to the State, so the owners can also benefit from the project? BrightSource, Vice President of Government Affairs JoeDesmond said: “whatever the mode construction of the project is to realize a profit, only in this context that we will start work on finance, all proceeds from the credit company’s perspective on the project assessment. ”

Commercial model construction projects using BOT is a huge advantage: due to government involvement in the project and makes it easier to review and approval of the project. Such as BrightSource company, in the United States have endured countless torture for clean-energy development almost hostile attitude, resulting in three-fourths of project proposals after a multi-year approval failed eventually to give up, on those who abandon the project has become a relief.

Although easier for project review and approval, but the BOT business model works on the premise that the project in the first 20-25 annual operating profits have to be enough to offset the investment cost of the project and have some benefits. Also because of this, the development of a potential hazard, is if the operating period of the project revenues are too low will not be able to repay the initial investment of the project. For example, toll charges may not be enough to reimburse investors highway construction costs.

But Israel for solar thermal power plants in the first 25 years of operation provides a high purchase price, about 76 shekels (about 21 cents) per kilowatt hour, the price Israel currently much higher retail prices of electricity, this is to ensure that investors in power plants to deliver before the country can obtain a certain amount of revenue. In return, Israel 30-60 taxpayers in the future years to get into the very low and low-carbon energy era.

Profits from Government

Noy says: “BOT business model construction of solar thermal power stations in operation 25 years after that, the Government will not pay a penny, you can buy it, this is a very good deal. In addition, the transferee must begin before the acquisition of the project is responsible for the operation and maintenance of power stations, at the same time to conduct a thorough check on acquisitions. But in fact the Government is very clear, solar-thermal power plants to run longer than 25, so of course the Government is willing to accept this model of project construction. ”

Noy explained that development by BrightSource company formerly known as Luz company, located in the United States SEGS power plant in Bakersfield, California after a long run of more than 30 years and still can be a normal power generation. Because of this precedent, Israel Government light thermal power plant life has a lot of confidence.

Desmond to the light construction of thermal power stations with BOT business model has been endorsed, he said: “this is a very interesting idea. If you recall, you will now find the BOT business model solar-thermal project and used in the construction of the model construction of renewable energy projects are very similar, such as during the great depression in 1930, Hoover Dam built by major infrastructure projects. ”

In the past decades, hydro-electric and geothermal power generation projects adopt BOT model to build. Because it was used to generate electricity, has a longer operational life of solar thermal projects have adopted similar pattern-building potential.

Just like hydropower and geothermal power, solar thermal power plants also using conventional power to drive a steam turbine to generate electricity. Use of steam turbines for power plants often because of their relatively long operating life of BOT and appropriate business models for construction.

Although both drives a steam turbine power generation, renewable energy generation is actually making use of solar, hydro and geothermal energy instead of conventional fuels to power is not only sustainable, but also more environmentally friendly and clean.

The good long-term performance of solar-thermal power station

Many renewable power projects and electricity do tend to last for decades, but only a low operation and maintenance costs. This is also reason why many renewable energy projects adopt BOT financing pattern. In fact, several hydroelectric and geothermal power generation project has put into operation a century still in normal operation and power supply.

For example, installed capacity of 354MW SEGS solar thermal power plant built in the 80 ‘s of last century, is also the world’s first commercial solar thermal power plant put into operation, and SEGS IX series of solar thermal power plants in the United States continued to supply electricity in California is the 25-year-old, the longest has been running for over 30 years.

Last year, the SEGS power plant with California public utilities companies signed a second 25-year power purchase contracts, into the second contract finished SEGS power plant turns 50 years old. Has withdrawn investments of the investors of the power station, now they signed after removing power plant operation and maintenance costs can reach an average of 5.57 cents/kWh electricity sales price.

But the plant’s generating capacity but not decline. According to EIA (United States information agency) provides data on SEGS power plants 2011 a total generating capacity of 646521MWh.

United States Department of energy renewable energy laboratory (NREL) solar-thermal power generation technology research department MarkMehos, head of the SEGS power plant performance and very understanding, he said: “it seems to me, with the passage of time, SEGS power plants not only failed to show any signs of decay, generating performance has been significantly improved. ”

MarkMehos said this explanation: “first of all, power plant operators to use more efficient next-generation heat-collecting tube to replace the old tube. Secondly, the power level of the overall operation and maintenance through the years of operation has also been greatly raised, those favorable conditions end their power plant operation and maintenance costs are lower while energy output was increasing. ”

Like many hydroelectric plants and geothermal power station after regular maintenance can last many years like power generation, solar thermal power plant to achieve this effect. But because of solar thermal power stations initial investment higher than PV and wind power projects, solar thermal projects require the Government to provide more support to enable them to make large-scale development.

In light hot power field, BOT commercial mode can provides a practical of project financing and construction method, it can makes project developers constantly obtained project development opportunities to achieved technology aspects of constantly upgrade; can makes investors obtained stable of investment returns; can makes taxpayers in investment party recovered project investment zhihou enjoy to very low of power using cost; can makes national can through construction and run mass of can renewable energy project to achieved should climate changes target.

For the development of solar-thermal power generation projects in China, you can also consider drawing on the pattern.

Original title: BOT mode is expected to support large-scale development of solar-thermal power projects

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