In that case, this set-up basically has a built-in energy futures contract for the lifetime of the plant. Still sounds way to rigid to make business sense. But I am clearly not a papermill operator...
Or maybe it just works more smoothly their way. Instead of having money sloshing back and forth you just get your electricity at a very low price you know beforehand.
I guess I could mail and ask them. Peak oil is not an energy crisis. It is a liquid fuel crisis.
I don't see why the Public (not the State - I would use a "Custodian"/ Stewardship arrangement) shouldn't "own" such energy projects and raise money simply by selling future energy production for cash now.
They can simply do this by creating Units in an entity which has rights over the future energy production. ie "shares" redeemable in energy, not in Central Bank "fiat" money.
I call this "unitisation" as opposed to "securitisation": ie "asset-based" finance (based upon ownership), as distinct from "deficit-based" finance (based upon a claim over someone else's ownership).
The outcome is not dissimilar to an "energy loan" repayable over the life of the asset.
Service providers formerly known as Bankers - such as Jerome - would do the necessary due diligence to ensure that the project "stacks up". ie produces more energy over its life than it costs to create, and, of course, costs to run and decommission.
Other service providers would manage the development and implementation, and operate the plant, and here is where the other type of "Unit" - ie proportional shares in an energy production partnership - would come in to play to align the interests of owners and managers (which both the Company legal form and the Trust legal form are structurally unable to do).
Such Redeemable Units would be sold at the current energy market price, or at a discount.
The outcome is a "Pool" of future production "wrapped" in a legal framework (I advocate forms of Partnership, but Trusts or even Companies could work, albeit clumsily and with managerial conflicts).
To all intents and purposes this "Pool" constitutes both a form of "Exchange Traded Fund" invested in energy - as opposed to (say) gold - and an "ungeared" and undated futures contract.
If a punter wants gearing (as exists in margined futures contracts) then he can borrow to buy "units" or buy options on them.
Industrial users can lock in price by buying units, which they can then use instead of cash to pay for their actual consumption. The actual "market price" would be based upon spot supply and demand of electricity, and by definition no "investors" would be involved in that market, only producers and consumers.
Any excess energy from the asset after repayment of the energy investment would be available to fund future investments, or for use as an "energy dividend" to the Community.
Using this model renewables - whose inputs are free, and operating and decommissioning costs limited and known - will probably be self financing.
