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Renewable energy project feasibility basics - Part 3
This is Part 3 of the Renewable energy project feasibility basics 5 part series. The
series will outline some basic aspects of a typical renewable energy feasibility
analysis, start to finish. The topics covered here is not aimed at providing site
specific solutions, but rather to guide readers through key aspects of an
objective, unbiased renewable energy feasibility analysis.
The 5 parts are:
1.
Introduction
2.
Technical and Technological aspects
3.
Organisational and Regulatory aspects
4.
Social and Environmental aspects
5.
Economic and Financial aspects
Review Part 1: Introduction and Part 2 Technical and Technological aspects
for context. Having these aspects fresh in mind will help with Part 3.
Part 3: Organisational and Regulatory aspects.
The Organisational and Regulatory aspects look at what drives a project, and
what hinders it. These are both important aspect to consider when doing a
feasibility analysis.
1.
Organisational factors: project drivers
2.
Regulatory aspects: project hurdles
1. Organisational factors: project drivers
Who is pursuing and/or driving the project investigation?
Who will develop, own and operate the project?
Who will be the shareholders and who will finance it?
The answers to these questions defines the organisation involved. Knowing
who the organisation is important in a feasibility study, because you need to
determine what the ability/ expertise/ capacity of the organisation is - in part
and as a whole.
Having collected al this information, you evalaute the scope of the project
against the ability/ expertise/ capacity of the organisation. The project scope
needs to fall within the capabilities of the organisation. If this is not the case
you have unacceptable high risk, and either the project scope needs to be
adjusted, or the organisation needs to be enhanced, or both.
This all sounds very tedious and boring - and it can be, but is critical to the
foundation the project rests on, and feeds right into the project business
development plan to come (discussed in Part 5: Economic and Financial aspects).
2. Regulatory aspects: project hurdles
Yes, this refers to red-tape, but not only that. First, regarding red-tape. When
you are investigating the potential viability of a renewable energy project, you
need to determine early on whether such a project faces any potential show
stoppers, and secondly, what the relevant regulations are. These can be make
or break aspects.
Each applicable law/regulation/restriction need to be identified and evaluated
according to the time and cost it will take to conform. Remember you are
dealing with bureaucrats here in may cases - stated time frame guidelines are
for you to adhere to, not them. The rule here is that it almost always take
longer, and cost more, than expected. Factor this into your cost projections and
development timeline.
The second aspect to take into consideration here ties into the next topic Part 4:
Social and Environmental aspects. In many cases you will deal with communities
and stakeholders that may have (or may feel they have) input into the project
and in some cases you may have a “duty to consult”. You need to take this into
consideration for your regulatory timeline and cost, because in most cases
regulators are lax to sign off on requirements when they are getting a lot of
public grief about it. This is one area where good advice and guidance can be
worth gold.
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