ENERGY FINANCE


ENERGY AS DEMAND


Energy generation out of the old (fuel based) energy system goes in decline. Governments, companies, neighbourhoods, households, individuals and of course the power companies certainly will be willing to sign for future energy demand to insure their supply. From finance perspectives this is very interesting: it inserts user demand guarantees (as in: purchase power) in to the finance case, insuring a contract protected cash flow to the financiers.. It draws the power of further income to the present finance case. Energy as Demand can be done in two versions: A fixed energy price model and variable energy price model. For energy users is the fixed energy price is very interesting. Than they know the energy price for several years to come. For energy project developers the variable energy price model is very interesting: it delivers the future payment security and on top of that the profits attached to future price rise of energy. These profits make the sales price of a project to an investor (like a pension fund). The Energy as Demand model is very interesting for both financiers (more payment security), insurance issuers (more payment guaranty), guarantee issuers (more payment guaranty) and project developers (huge project income and/or project sale margins possible). As stated above: Energy as Demand draws the power of further income to the present finance case and by this make energy project finance, guarantees, insurances and by this all energy project development much more easier. Energy as Demand is a concept capable of generating a massive energy transition investment wave.


Author: Gijs Graafland


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