Legal Primers on Solar and Wind Projects

[Saluki]

I'm doing research on renewable energy to try to transition into that space since leaving my prior job (derivatives lawyer).  I found these two primers written by a law firm (as part of their marketing to position themselves as experts in this space).  One is 150pp and the other is 180pp.  Good references for anyone interested. 

 

https://www.growsolar.org/wp-content/uploads/2014/10/lawofsolarenergy.pdf

 

https://files.stoel.com/files/SR/Stoel Rives - The Law of Wind.pdf

 

[pricingpower]

Those look great.  I tempered my excitement on spending time on the space quite a bit back when the Texas freeze hit a few years ago... unexpected capacity swap uncapped losses in like 24hrs were larger than the NPV of some projects, hopefully people structure these projects better now

[Saluki]

5 hours ago, pricingpower said:

Those look great.  I tempered my excitement on spending time on the space quite a bit back when the Texas freeze hit a few years ago... unexpected capacity swap uncapped losses in like 24hrs were larger than the NPV of some projects, hopefully people structure these projects better now

 

Can you explain what you mean capacity swap losses?  I worked on capacity swaps when I was a young lawyer but those were Telecom swaps (indefeasible rights of use) where one guy with fiber in one part of the country gives some to another entity in another part of the country so they both have fiber everywhere instead of both of them overbuilding everywhere.

 

 

[pricingpower]

Not an expert but essentially the renewables developer would often lock in economics to cover cost of project by doing a long term power purchase agreement selling some % of their expected generation they felt confident they could produce (maybe 80% of what they are rated for).  As part of the agreements were that if they didn't operationally generate the minimum they promised the counterparty would buy power on the spot market to make up for it but that cost gets passed it through.  The core problem was the spot market in Texas went to a $9000/mwh cap compared to a normal $25 so if you weren't producing for a short critical icy period you were running deeply cashflow negative in a thinly capitalized project with rigid debt and tax equity requirements.