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development phase
Development Phase: Concept to Pre-Construction
Conception and Feasibility
The goal of conception and feasibility is to determine if there is an opportunity for renewable energy project and enough energy resource to justify the project, identify any potential supporters, confirm absence of major obstacles, and gauge the local community and utility’s receptivity to a project. A renewable energy consultant may be able to provide an initial review of the renewable energy resource and identify potential utility interconnections, as well as help with the fatal flaws review. The consultant may also have suggestions for sources of grant money and other funding.
Project Design and Development
If initial research reveals that a project may be economically
feasible, design and development begin. At this point a project manager
is often hired, the project’s specific goals are defined, and the
project manager identifies the tasks needed to achieve them. An initial
timeline and financial analysis are completed (these are later refined
as more information is collected). Site surveys for the permitting
process begin, long-term data collection is started, and the
range of project possibilities is narrowed down to a few “best” plans.
It is important to begin these processes early, because the actions and
studies involved set the future course of the project and can take
several months or years. Preparations for the formal utility
interconnection process should also begin.
- Renewable energy resource review
- Site inspection
- Investigation of interconnection opportunities
- Fatal flaws review
- Grant research and application development
- Investigation of site access
Project Design & Development Tasks:
- Obtain meteorologist recommendations and begin data collection
- Identify financial incentives
- Design and initiate wildlife surveys
- Begin interconnection evaluations
- Begin electricity sales discussions
Pre-construction Development
Once preliminary planning and analysis steps are completed, the project begins its Pre-construction and Site Development phase. This phase includes completing environmental reviews, applying for permits, and finalizing the interconnection agreement. Negotiations should begin on the Power Purchase Agreement (PPA), although this agreement is not executed until the project is close to receiving its construction financing and the final permits are ensured. Negotiations and a finalized PPA are immensely important to a renewable energy project. Not only is the primary revenue stream determined in the PPA, but the permits and the PPA, along with the revenue projections and interconnection agreement, set the basis for later financing negotiations. Major equipment orders need to be placed as soon as possible, but coordinated with assurance of financing, application for tax credits, and site suitability assessment. Long waits for turbines, towers, photovoltaic panels and transformers are not at all unusual due to high demand from project developers wanting to take advantage of the tax credits and incentives before the expiration deadline. The project team releases a Request for Proposals (RFP) and chooses a construction manager based on the proposals received.
Pre-Construction Tasks:
- Obtain permits (conditional use permit, road permit, building permit, NPDES permit)
- Finalize development plan
- Finalize interconnection agreement
- Negotiate Power Purchase Agreement
- Plan incentive use and complete applications
- Finalize financing
