There are several reasons why capital funding based only on project viability is difficult to secure:
- refurbished turbines have limited track record to gauge risk
- good long-term Power Purchase Agreements (PPA) are not available
- short term PPAs are considered higher risk
- keeping the borrowing amount low, reduces lender interest.
Securing income will likely be through a PPA. This is because:
- short term PPA contracts often offer the best tariffs (6 months to 2 years)
- the Smart Export Guarantee is likely to be for a lower tariff
- Contracts for Difference tariffs are likely to be lower than a PPA
- direct or sleeved supply to a third party usually increases costs.