Table 1
Advantages and disadvantages of business models – the EU investor's perspective
| Model | Advantages | Disadvantages |
|---|---|---|
| Electricity market | Compliance with EU state aid rules | No offtake High price volatility, negative prices High investment risk |
| PPA | Offtake Stable selling prices | No compliance with EU state aid rules |
| CfD, CEAC | Stable selling prices State loan guarantees | No offtake EC acceptance required case by case |
| CfD (Czech version) | Offtake Stable selling prices State loan guarantees | Model waiting for EC acceptance |
| RAB | Stable selling prices Charging consumers from the beginning of construction State loan guarantees | No compliance with EU state aid rules (probably) No offtake |
| PTC | Fixed state subsidy for every megawatt hour (MWh) of electricity generated Regulatory risk insurance State (federal) loan guarantees | No offtake High price volatility, negative prices No compliance with EU state aid rules |
| ZEC | Relatively stable selling prices | No offtake No compliance with EU state aid rules |
| CES | A subsidy in market revenue | No offtake No compliance with EU state aid rules Subsidy value is set by (dynamic) market |
| CM | Covering of fixed production costs | No offtake (for energy) High price volatility, negative prices EC acceptance required case by case Short-term auctions Unfavorable to units with high fixed costs |
| Carbon tax/ETS | Increasing of costs for coal- and gas-based competitors Compliance with EU state aid rules | No offtake High price volatility, negative prices |
| Exeltium | Offtake Contracted sales of large electricity volume at relatively stable (indexed) price | Price volatility in the long term, dependent on the wholesale market price index Offtakers have a right to withdraw EC acceptance required case by case (probably) |
| Mankala | Offtake Selling price covers all production costs Compliance with EU state aid rules | High risk before and during construction The model requires a perfect cooperation of dozens of shareholders |
[i] Source: Own elaboration.
[ii] CM, Capacity Mechanism; CEAC, Carbon Emissions Avoidance Credit; CES, Clean Energy Standard; CfD, Contract for Difference; EC, European Commission; ETS, Emissions Trading System; EU, European Union; PPA, Power Purchase Agreement; PTC, Production Tax Credit; RAB, Regulatory Asset Base; ZEC, Zero Emission Credit.
Figure 1
Median of investment costs for various electricity sources (USD′2019, millions).
Source: Own elaboration based on [Projected Costs…, 2020, pp. 43–44].
CCGT – Combined Cycle Gas Turbine; mln, million; PV - Photovoltaics.
Figure 2
Predevelopment costs for various electricity sources in the UK (GBP′2018/MWh).
Source: Own elaboration based on Electricity generation costs [2020, p. 26].
CCGT – Combined Cycle Gas Turbine; PV - Photovoltaics.
Figure 3
Changes in the ownership structure in the SaHo Model at subsequent stages of the project (basic scheme).
Source: Own elaboration. SPV, Special Purpose Vehicle.
Figure 4
Changes in the ownership structure in the SaHo Model at subsequent stages of the project (detailed scheme).
Source: Own elaboration. SPV, Special Purpose Vehicle.