3 ms·
General phenomena like inflation (construction cost index rising) and interest rate (cost of capital) rises should affect all technologies proportionally. The
by tuatoru 4y ago
General phenomena like inflation (construction cost index rising) and interest rate (cost of capital) rises should affect all technologies proportionally.
The notable thing was that CCGT costs aren't rising to the same extent, despite broadly similar capital cost to utility scale PV (page 11). And longer construction time (pages 37 PV and 39 CCGT), which affects the risk premium.
I recall reading that there was a polysilicon shortage because of changes in China's energy policy. Not sure what's going on with wind. Nor why CCGT costs are continuing low.
- snake_doc 4y agoYes, though those effects are much less on an incremental basis for any technology already at scale. The mechanisms still exist, but delay is longer.
- 7952 4y agoCost of capital might vary between types of project. It is becoming common in battery storage to have sites funded by private equity. And non-recourse debt is common in offshore wind. Different sources of capital have different capabilities to assess risk. A battery storage site is easy to understand so can be funded my smaller groups. Offshore wind requires more modelling, due diligence, and technical understanding so needs the resources a bank has. And a nuclear site is too difficult for anyone but government. Also, inflation can vary across industries. For example wind turbines could be vulnerable to high steel costs. A fast project can better predict staff costs than a slow one.