Microgrids – Luxury or Necessity?
December 9, 2020 1:00 – 5:00 PM ET
A Summit on Microgrid Financing
Due to the elevated investment cost of microgrids relative to the level of individual equity availability, most projects require debt financing. The rate of interest on that debt is determined by market rates, the creditworthiness of the borrower and on the risk associated with debt recovery upon default. Higher rates of interest imply a greater chance of default and, therefore, a higher level of risk. While higher interest rates help to compensate the lender for increased risk, they can also significantly increase the total cost of project capital and lower its payback rate to borrower.
Microgrid investments are often considered high-risk due to some combination of the lack of long-term track records, challenges in evaluating individual or community payback value, maturity of technology, asset standardization and transferability, energy demand over time, service resiliency and a host of other unique characteristics of each community and project. As a result, many investors have difficultly valuing microgrid projects and/or assigning risk levels to their debt financing and automatically default to extremely high interest rates as compared to traditional rates for utility scale investments.
Topics in this unique session of microgrid financing will focus on risk reduction and include:
- Lowering risk by achieving higher levels of cost saving resiliency
- Lowering risk by using the ‘right’ combination of technologies
- Lowering risk by demanding standardization and future proofing
- Lowering risk by pooling applications and physical networking
- Lowing risk by increasing owner creditworthiness
Other topics will include reducing the project’s capex, better value realization of lowering demand premiums, and by better asset utilization. Several pilot and production use case will be reviewed and critiqued for these characteristics. The session will be as provocative as it is practical in its advice.
The summit will be conducted for utility and third-party power providers’ upper level management and decision makers. Invited stakeholders will include industry experts and management, investor and financing professionals including regulators, ISOs, utilities, technology providers, financing experts and academics.
- Assigning risk factors to microgrid financing
- Impact of ownership credit worthiness on interest rates
- Effect of technology maturity
- Asset standardization and transferability
- Community underwriting – ESOP/Co-Op
- Electricity future demand forecasts
- Business model impact
- Partnering opportunities
- ESCO & Utility top management/decision makers
- Municipal management
- Renewable energy finance experts
- System equipment and service suppliers
- Energy investors
- Technology providers
- Finance academics
- NGOs and industry standards organizations
- Finance industry subject matter experts
- Microgrid and ISO technology experts
- ISO & Co-Op finance management
- Use case microgrid installations
- Industry OEMs and service providers
- Finance academics
- Community business developers
- Length: 4 hrs.
- Speakers/panelists: 6-8 experts
- Content outline:
- Introductions – 10 min.
- Opening Keynote – 20 min
- Speaker presentations – 60 min.
- Panel Discussion/Town Hall – 120 min.
- 25% moderator questioning – 30 min.
- 75% audience questioning/comments – 90 min.
- Speaker/panelists summary comments – 25 min.
- Closing Comments – 5 min