Well, if you have access to zero-cost capital, I can put you in touch with investors who want to develop windfarms...

But you yourself admit you don't:

These units may be sold at the existing market price, or at a discount, which would give an implicit return on capital. The market would decide what, if any, return that would be.

Unless I'm mistake, the "return" on capital is a "cost" of capital.

These "units" would be redeemable against energy consumed, and therefore comprise what is essentially an undated and ungeared futures contract allowing a "hedge" against energy price rises. ie if prices fall, the investor loses on his units, but pays a lower energy bill to compensate him.

You assume, again, that investors are interested in lower energy bills. They are not. They are interested in a return on capital, and the sale of the natural hedge you mention to outside parties is not so simple over the very long term required for capital-intensive investments like wind farms. That wasprecisely the point I was trying to make in my diary above.

Provided that the asset produces enough energy to redeem the units sold forward (an "Equity" risk for the investors, requiring the services of investment bankers and so on), then the project has been "self-financed" at zero cost.

That "provided" is the biggest project risk, and you just push it aside casually. It doesn't work like this.


In the long run, we're all dead. John Maynard Keynes