Truth to Power - Episode 17

On this week’s episode of #TruthtoPower, IntelStor's Founder & CEO, Philip Totaro provides an analysis of the operational impacts for renewable energy assets based on a loss of PTC driven refurbishment & repowering.

Today, some renewable energy asset owners in the USA have enjoyed re- qualifying their projects for PTCs after their first 10 years in operation. This extra PTC revenue led many owners to become highly dependent on PTC revenue as a percentage of total revenue. The average across all wind energy projects in the United States is just under 24%.

That dependency has led to some O&M decisions which are now becoming unviable as the PTC goes away. If some asset owners who over-run their turbines do not change their operational or maintenance habits, they risk being stuck with a fleet they would need to repower without the benefit of a PTC. In order to do that, they will likely have to show their project has already achieved a net positive return on capital, or else get very close to breakeven.

Increasing demand and limited supply of power will make asset refurbishment or repowering more attractive if a PPA can be renegotiated at a higher price, even without the PTC benefit. A desire to lock in a long-term fixed PPA in the face of a potential surge in power prices will lead corporate power buyers to try to firm up more lucrative deals sooner rather than later as they anticipate these price increases.

Have a listen today, and get in touch with your best questions about the renewable energy market in the USA, or any other country around the world.

This show examines data driven insights for the energy sector, with a focus on renewables. To subscribe to IntelStor Research Notes and get early access to our latest content as well as these Truth to Power weekly editorials, visit https://lnkd.in/grfixJn