Developing and financing merchant power plants in the U.S.

Conference · Wed Jul 01 04:00:00 EDT 1998

OSTI ID:20050579

Ryan, M J

Limited recourse financing for merchant plants in some areas of the world such as Latin America has become almost commonplace in the recent past. Limited recourse project financing for merchant plants in the US, once almost unthinkable, has already been achieved with the frontier-breaking Calpine Pasadena project. While long-term power purchase agreements have historically provided comfort to lenders and developers alike, they are increasingly becoming a thing of the past as utilities are reluctant to lock themselves into a fixed price, which may turn out to exceed the prices available in the open market. So, it seems that the trends toward merchant plants in Latin America will soon take hold in the domestic market. With the market for limited recourse project financing still in the embryonic stage, and the strong likelihood that long-term power purchase agreements will not be available, it is clear that successful domestic projects will have to be well conceived, properly structured and capitalized to secure debt and equity funding commitments. This paper will focus on opportunities for developing merchant plants, the major risks present to developers and investors and the most appropriate strategies for structuring finance for a project.

• Research Organization: Black and Veatch (US)
• OSTI ID: 20050579
• Report Number(s): CONF-971214--
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
FINANCING
MARKET
POWER PLANTS
PRICES
USA