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This article never even mentions the real problem, which is doing good risk assessment. Suppose I'm a bank, and you come to me and ask for $3 billion to build a

This article never even mentions the real problem, which is doing good risk assessment. Suppose I'm a bank, and you come to me and ask for $3 billion to build a solar farm. If you work very hard for the next five years, you might (might) turn that $3 billion into, say, $6 billion. Or you could just grab the $3 billion and run, and have more money than you could ever spend anyway. The second option is so attractive that I know lots of people might take it. I could sue to get it back, but that's years of expensive hassle, and a lot of it will probably be gone by then anyway. So I don't make the loan, unless you're an enormous corporation like GE that can put up collateral, and has enough to lose that grabbing and running isn't worth it.

endswapper 10y ago
Policy is the issue, not risk assessment. I'm not dismissing the need for "good" risk assessment, but that should be a part of any investment analysis. A given. What's interesting is the objective view that this is something we need to do, as stewards of the environment, as countries, as a civilization, while acknowledging it will be expensive. This is the beginning of a post-denial era. It's impressive to discuss opportunities in terms of billions and trillions. I think this presents a tremendous opportunity for the most universal, collaborative solutions.
- dmead 10y ago
  Did you finish any thoughts, or am i just dumb?
Retric 10y ago
A little oversight can make it very hard to steal the full $3 billion. Sure you can walk away with say 200 million, but at that point going for big money is much more attractive. Or better yet skim 100 million and go for 5.5 billion. PS: There is also no need for green specific finance solar and wind are already cheaper than coal without subsides in much of the world. And they are only getting cheaper so that 90 trillion is going to be 80 trillion before you know it.
philipkglass 10y ago
Those are nuclear-sized dollar numbers. I don't know of any solar PV farm that has been built in a single $3 billion phase. Flexible scaling is one of the big advantages of PV projects over other types of electricity generation projects. There are economies of scale as solar projects go up to (IIRC) 20 megawatts, but above 20 MW costs per unit are pretty flat. So investors can take a much smaller risk with e.g. a $50 million project of 25 megawatts, see how it performs over a few years, and invest in larger projects (or a larger number of tens-of-megawatts projects) if they like the results. 5 years is also an unusually long timeline for constructing a solar PV project. The largest PV project in the US, the 579 megawatt Solar Star in California, was completed in 3.5 years. It also began supplying (partial) power to the grid about a year after construction started. Since a big PV project is practically a bunch of little projects tiled together on the same site, energy payback and financial payback on a big PV project can begin well before construction officially completes. That's in contrast to big "chunky" generating investments like a traditional storage-backed hydroelectric dam, or a nuclear reactor, where you have to build in large increments and can't turn on parts of the plant as you finish them. If small nuclear reactors ever get commercialized -- and I hope they do -- they too should offer more tolerable financial/schedule risk than today's gigawatt-plus reactor designs.

endswapper 10y ago

Policy is the issue, not risk assessment. I'm not dismissing the need for "good" risk assessment, but that should be a part of any investment analysis. A given. What's interesting is the objective view that this is something we need to do, as stewards of the environment, as countries, as a civilization, while acknowledging it will be expensive. This is the beginning of a post-denial era. It's impressive to discuss opportunities in terms of billions and trillions. I think this presents a tremendous opportunity for the most universal, collaborative solutions.

dmead 10y ago
Did you finish any thoughts, or am i just dumb?

Retric 10y ago

A little oversight can make it very hard to steal the full $3 billion. Sure you can walk away with say 200 million, but at that point going for big money is much more attractive. Or better yet skim 100 million and go for 5.5 billion. PS: There is also no need for green specific finance solar and wind are already cheaper than coal without subsides in much of the world. And they are only getting cheaper so that 90 trillion is going to be 80 trillion before you know it.

philipkglass 10y ago

Those are nuclear-sized dollar numbers. I don't know of any solar PV farm that has been built in a single $3 billion phase. Flexible scaling is one of the big advantages of PV projects over other types of electricity generation projects. There are economies of scale as solar projects go up to (IIRC) 20 megawatts, but above 20 MW costs per unit are pretty flat. So investors can take a much smaller risk with e.g. a $50 million project of 25 megawatts, see how it performs over a few years, and invest in larger projects (or a larger number of tens-of-megawatts projects) if they like the results. 5 years is also an unusually long timeline for constructing a solar PV project. The largest PV project in the US, the 579 megawatt Solar Star in California, was completed in 3.5 years. It also began supplying (partial) power to the grid about a year after construction started. Since a big PV project is practically a bunch of little projects tiled together on the same site, energy payback and financial payback on a big PV project can begin well before construction officially completes. That's in contrast to big "chunky" generating investments like a traditional storage-backed hydroelectric dam, or a nuclear reactor, where you have to build in large increments and can't turn on parts of the plant as you finish them. If small nuclear reactors ever get commercialized -- and I hope they do -- they too should offer more tolerable financial/schedule risk than today's gigawatt-plus reactor designs.