Virtual DisCos? Utilities might be stepping out,
but outsourcers could be cutting in.Wholesale competition and the prospect of competitive retailing are leading many electric utilities to turn...
capital are available to support the development of renewable projects.
While not a direct source of capital, the slow re-emergence of energy trading is worth consideration. Industry trading operations have been replaced and acquired by financial institutions that recognize the continuing need for liquidity and risk mitigation. Assuming these efforts are successful, merchant risk eventually will lose some of its stigma as investors regain confidence in the ability to hedge off-take price and fuel risk. It's still unlikely that a fully merchant power project with 80-percent leverage will be financed in the near future. However, carefully structured projects with a good fundamental story will be able to carry some element of merchant risk. A broad and reliable trading market will help accelerate this process. -R.P.
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