Shoreline Energy Advisors Completes Development Cycle for Bridgeport Microgrid
Unique Development Approach Mitigates Early Stage Risks for Permanent Investors
BRIELLE, N.J., June 14, 2021 /PRNewswire-PRWeb/ -- Shoreline Energy Advisors (Shoreline) announces the sale of all Partnership Interests in the Bridgeport Micro-Grid LLC. Shoreline was the initial developer for the City of Bridgeport's participation in the Connecticut Department of Energy and Environment Protection's ground-breaking Microgrid program, and later worked as an advisor to the original investors in the project during their divestiture of Membership Interests.
The recent sale completes Shoreline's conceptualization and implementation of a unique development approach starting with origination of project concept, feasibility verification, energy off-taker contracting, engineering and design, locating investors and lenders, construction oversight, commissioning, commercial operation and maintenance and marketing to take-out investors and lenders.
While development of true microgrids is still in its infancy, the Bridgeport project was a substantial pioneering effort requiring significant regulatory lobbying and modification even after the Connecticut DEEP's initial program launch. Shoreline's development model has proven to be applicable for any large energy project including, but not limited to, cogeneration, central thermal, district energy, storage, renewables, biofuels, and resource recovery.
A developer develops value at each stage of the development cycle. Sub functions of the development process particularly ongoing economic analysis and commercial contracting with energy projects determine the success or failure of development efforts. To date the role and importance of the "development" function, though widely used and accepted in real estate transactions, has been generally overlooked in the energy community. While many within the industry still focus on the critical technical aspects (design and engineering) of energy project development, these disciplines have evolved to the point of being fungible when integrated into the overall development process. Currently there are dozens of firms capable of providing competent and effective technical services which now need only take a supporting role in successful energy project development.
Shoreline's unique development process breaks down the development cycle and isolates the full range of development risks to specific portions of the project's evolutionary timeline. In so doing uncertainty among investors and lenders which discourage early financial commitment on legitimate energy projects are eliminated. Simply stated, when investors and lenders are required to commit financial resources to an investment that does not match their risk profile, development stalls and often, ceases.
The model used in the development of the Bridgeport Microgrid involved a pre-packed project design, pre-committed energy off-takers and definitive transition points for the phasing in and out, of investors and lenders. This approach allows traditional risk concerns of financial parties who prefer late-stage projects, to be "wrung-out" before their funding is required. Only after the project has met pre-determined milestones are long-term investors and lenders asked to commit financial resources. The approach provides validation that customary investor risks which discourage investment, are no longer present when they make their financial commitment.
As the project evolves over time, initial investors receive returns on the value of the project from its generated cash flow, but also from compensation received early in the development process that would normally be siphoned to non-financial parties. Their cash flow compensates for the higher risk they are assuming early in the development process.
With the Shoreline development model, after the project is built, operated, and maintained for a period of several years, risks related to energy sales, off-taker credit, construction, permitting, and operational break-in are no longer present. After these early concerns are demonstrated to be no longer present, project ownership and debt can be transitioned to either a pre-packaged investor and lender or can be marketed to longer-term, take out investors at a lower rate of return but one that is commensurate with the risks assumed at that point in time. This development model is an adaptation and expanded version of "mini-perm" arrangements which are often used in real estate development.
For more information on the Bridgeport microgrid project, and the application of the Shoreline Energy Project Development Model, contact Fred Fastiggi - Managing Director at (732) 528-1639 or email at [email protected]
Media Contact
Fred Fastiggi, Shoreline Energy Advisors, LLC, +1 732-528-1639, [email protected]
SOURCE Shoreline Energy Advisors, LLC
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