Professional Documents
Culture Documents
Scott W. Reynolds
Vice President
Jenkins Energy Group Leader
(925) 822-9003
License # 0648659
Agenda
• Q&A
2
Alternative Energy Businesses
Wind
Wind Biofuels
3
Factors Influencing the Growth of
Renewable Energy
4
Renewable Energy Risks
• Attractive Financing
• Catastrophic Capacity (Earthquake / Hurricanes)
• Corporate Governance
• Disallowance of Tax Credits
• Investment Return
• Investors/Joint Venture Partners
• Lack of Sun/Wind
• Limited Balance Sheet
• Performance/Warranty Guarantee
• Rating Agencies
• Risk Assumption Capability
• Supply Chain
• Environmental Risks
5
Solar
Solar Risks
• Economic
• Price competitiveness relative to other energy sources
• Cost overrun – equipment and labor cost escalation
• Investment Tax Credits
• Technology risks
• Efficacy
• Financing
• Warranty
• Supply Chain
• Silicon
• Mirrors
• Glass breakage during transportation
• Lack of sun / irradiation
7
Solar Technology:
Risk Mitigation Strategies
• Efficacy Coverage
8
Solar Risk Mitigation Solution
• Risks
• Unproven technology
• Attractive financing difficult
• Performance guarantee demanded
• Investors
• Customers
• Limited Balance Sheet
• Objective
• Improve financing terms and enhance sales
• Solutions
• Define risks of loss via Capital
• Project analysis
• Transfer to 3rd party insurer:
Performance guarantee
9
Warranty protection
Wind
Wind Risks
11
Wind Risk Mitigation Solution:
Supply Chain Insurance
• Traditional property/cargo insurance coverage
• Must be triggered by physical damage
• 2nd and 3rd tier suppliers usually not covered
12
Biofuels
Biofuels Risks
14
Biofuels Risk Mitigation Strategy:
Biofuel Producer with Construction Project Start-up
• Risk Issues
• System start-up
• Performance guarantee
• Financial market comfort
• Objective:
• Provide appropriate performance guarantee coverage
• Solution:
• Systems Performance Insurance covers start up failure
15
Being Green Has Its Risks and Its Solutions
Risks Solutions
• Attractive Financing • Irradiation/Lack of Wind Insurance
• Earthquake, Hurricanes • Performance Guarantee
• Corporate Governance • Power Price Protection
• Disallowance of Tax Credits • Risk Mitigation
• Investment Return • Supply Chain Analysis and
• Investors/Joint Venture Partners Insurance
• Lack of Sun/Wind • Tax Protection
• Limited Balance Sheet • Warranty Protection
• Rating Agencies • Weather & Energy Products
• Risk Assumption Capability • Traditional Insurance Products
• Supply Chain
• Environmental Risks
16
Questions?
17