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Post by jevans4949 on Sept 2, 2014 9:41:55 GMT
As I understand it, the wind turbine industry depends on selling their product at an inflated price, determined by the government.
So, the whole thing is dependent on government whim. Granted that all political parties have guaranteed existing projects into the future, it depends how much you think you can depend on them. To a certain extent, Green Energy policy is being driven by EU targets; if Britain were to come out of the EU, would Britain keep to them anyway?
Most, if not all of the loans being offered on Assetz are for 3 years only, so what happens after that need not concern Assetz investors now. The question is, what will happen in the next 3 years.
Probably the (r)UK government will be able to, and want to, carry on the subsidy. (Actually, it's not a government subsidy, but a rule imposed on energy retailers, so they take the blame for inflated energy costs.)
However, if Scotland does go independent, what is the likelihood that their government budget will fall apart, and that they will have to start slashing expenditure all over the place? For that reason, I'm holding off Scottish turbines until after the referendum.
For the (r)UK, the main danger I foresee is that Ed Miliband, flushed with the popularity of the freeze on retail energy prices, decides to have a go at the Fat Cats who are making Excessive Profits on wind turbines - given they will get little sympathy from a lot of "countryside lovers" anyway.
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Post by Ton ⓉⓞⓃ on Sept 2, 2014 11:05:37 GMT
As I understand it, the wind turbine industry depends on selling their product at an inflated price, determined by the government. So, the whole thing is dependent on government whim. Granted that all political parties have guaranteed existing projects into the future, it depends how much you think you can depend on them. To a certain extent, Green Energy policy is being driven by EU targets; if Britain were to come out of the EU, would Britain keep to them anyway? Most, if not all of the loans being offered on Assetz are for 3 years only, so what happens after that need not concern Assetz investors now. The question is, what will happen in the next 3 years. Probably the (r)UK government will be able to, and want to, carry on the subsidy. (Actually, it's not a government subsidy, but a rule imposed on energy retailers, so they take the blame for inflated energy costs.) However, if Scotland does go independent, what is the likelihood that their government budget will fall apart, and that they will have to start slashing expenditure all over the place? For that reason, I'm holding off Scottish turbines until after the referendum. For the (r)UK, the main danger I foresee is that Ed Miliband, flushed with the popularity of the freeze on retail energy prices, decides to have a go at the Fat Cats who are making Excessive Profits on wind turbines - given they will get little sympathy from a lot of "countryside lovers" anyway. Richard Martin is the introducer for several of the WT deals his last comments were on Aberdeen WT he said, Although most of the queries have been answered in replies to previous wind turbine loans, it may help if I deal again with some of the points that have been raised: FIT payments: The Government is committed by legislation to the payment of FITs from the date of commissioning for a term of 20 years indexed linked to RPI. Although FITs have and will continue to be reduced, the Government has repeatedly stated that it will not make any retrospective changes; indeed to do so, would be political suicide bearing in mind the huge amount of money invested in FIT based schemes ranging from domestic roof top solar to institutional infrastructure funds. Scottish Independance:The payment of FITs is an obligation of the UK government, which has stated that, in the event of independence, it will continue to meet these obligations. In any event, the Scottish parliament is strongly supportive of renewable energy - particularly wind - so it is likely that even after independence it would continue to encourage further development. Alternative Renewables:It seems probable that political and economic pressures will alter the emphasis of renewable subsidies, which could disadvantage on shore wind, although it seems more likely that this will apply more to large scale wind farms rather than individual turbines. The point, already made, is that any changes will not be retrospective or affect existing installations. These are very well secured loans supported by a long term index linked income stream which is effectively guaranteed by the UK government. Any operational risks are well covered by warranties and insurance provided by substantial counter parties. I think the economics of an independent Scotland are unclear meaning the income from WT and oil would be become more important.
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koba
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Post by koba on Sept 2, 2014 17:06:27 GMT
I think a substantial portion of the financial sector will move south in the event of independence making oil even more important. Even so, don't see macro-problems during the life of a loan so not too worried.
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pikestaff
Member of DD Central
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Post by pikestaff on Sept 2, 2014 20:17:38 GMT
...Even so, don't see macro-problems during the life of a loan so not too worried. Possibly a bit short-sighted. The assets have to be refinanced in order to repay the loans, so the real issue is what will lender sentiment be then? I'm not worrying about it too much, for the reasons given in RM's post, and I have lent on Scottish deals. However, I won't be adding more this side of the vote.
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koba
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Post by koba on Sept 3, 2014 16:47:18 GMT
I take your point but still feel the risk is manageable over the timescale involved. So long as the borrower can refinance - even if they need to pay a risk premium - I am OK. The first "tranche" of adverse investor sentiment will be taken by the borrower. Were this an equity investment I would be more circumspect.
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