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Creating energy projects that pay for themselves

Building any form of energy infrastructure requires major investment. If projects are created to plan, the commercial value of the energy generated can pay dividends. The major challenge however, is to understand both their financial and environmental impact.

The financial viability of traditional fossil fuel-based energy projects (for example), is extremely well-established; the Berket oil rig on the Russian Pacific coast cost approximately $12 billion to build and is estimated to make $9 billion in tax revenues over the next ten years alone¹. Yet, the environmental impact is huge and the cost of mitigating the damage – in the form of levies - will increase the bill considerably. 

We’ve been researching three recent international energy projects which are predicted to not only pay for themselves, but also create revenue and (in some cases), save money:

1.    Warrington’s solar energy project, UK 

Said to be the UK’s most advanced project of its kind to date, Warrington Borough Council’s new solar project will cost £62.34 million to build but will generate an estimated operating surplus of £150 million over 30 years². 

Construction is underway at the first solar farm site in York, and a second will be built near Hull during a later phase. Together, the two solar farms will produce green energy for 18,000 homes, including 100 percent green electricity for Warrington BC, with an annual saving of £2 million.

2.    El Dabaa nuclear power plant, Egypt

With construction set to start in 2020, the El Dabaa nuclear plant will help Egypt to branch away from oil and gas at an estimated cost of $30 billion⁴. Egypt’s president, Abdel Fattah el-Sisi was also said to be considering the construction of solar and wind energy facilities in order to generate another 4,300 megawatts of power⁵.

It is estimated that the power plant will boost Egypt’s gross domestic product (GDP), create up to 50,000 jobs and generate up to 50 percent of the country’s electric energy capacity. 

3.    Nachtigal hydropower project, Cameroon

Due to be operational in 2023, the new hydroelectric power plant on the Sanaga river in Cameroon will cost approximately $1.4 billion⁶. A two-kilometre long dam will be built to channel the water and drive a set of 60MW turbines.

Once complete, the hydropower plant should increase the amount of energy Cameroon can produce by 30 percent and save $100 million a year in generation costs. It will also help the country move closer to its goal of providing access to electricity for 88 percent of its population by 2022⁷.

Explore energy solutions that make fiscal and environmental sense

Investors will always look for a healthy monetary return on energy projects, but there’s more to assessing a project’s merit than pure financial gain. While the energy infrastructure of the future should continue to be profitable, it will also need to be sustainable and less damaging to the environment.

These considerations are explored in detail during the Assessment and Financing of Energy Projects module on our Online LLM Energy and Environmental Law. Students gain an understanding of how energy projects are designed to reimburse construction costs while striving to offset environmental effects. Alongside other key topics covered by the programme, this module uses real-world case studies to contextualise learning and prepare students for a career within either legal discipline.

Interested in finding out more? Request information today to discover the other essential subjects included on our Online LLM Energy and Environmental Law.

References:
¹HORTON, G. (2016) Engineering Feat of the Month: Berkut Oil Rig [online] Available at: < https://www.fircroft.com/blogs/engineering-feat-of-the-month-berkut-oil-rig-62352216030> [Accessed 16.08.2019]

²UNKNOWN. (2019) Warrington Solar Project Hailed as UK’s Most Advanced [online] Available at: < https://www.theengineer.co.uk/warrington-solar-project/> [Accessed 16.08.2019]

³LARSON,A. (2019) Nuclear Power Needed for Clean Energy Future [online] Available at: <https://www.powermag.com/nuclear-power-needed-for-clean-energy-future/> [Accessed 16.08.2019]

⁴UNKNOWN. (2018) Project Profile: El Dabaa Nuclear Power Plant, Egypt [online] Available at: <https://power.nrdigital.com/power_technology_nov18_special/project_profile_el_dabaa_nuclear_ power_plant_egypt> [Accessed 16.08.2019]

⁵ALSHARIF, A. (2016) Russia to Lend Egypt $25 Billion to Build Nuclear Power Plant [online] Available at: <https://www.reuters.com/article/us-egypt-russia-nuclear-idUSKCN0YA1G5> [Accessed 23.08.2019]

⁶UNKNOWN. (2018) Nachtigal Hydropower Project [online] Available at: < https://www.power-technology.com/projects/nachtigal-hydropower-project/> [Accessed 16.08.2019]

⁷UNKNOWN. (2018) Cameroon: World Bank Group Helps Boost Hydropower Capacity [online] Available at: <https://www.worldbank.org/en/news/press-release/2018/07/19/cameroon-world-bank-group-helps-boost-hydropower-capacity> [Accessed 23.08.2019]

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