The Renaissance of HVDC for a Low Carbon Future PART 2 - Structuring and financing HVDC transmission line projects
Long-distance energy interconnectors are needed for a low-carbon future, but face significant political, economic, and legal hurdles, especially in developing countries. Key financing models include integrated grids, merchant investments (based on price arbitrage), and independent power transmission (IPT) projects with long-term government contracts, each with their own challenges and regulatory considerations. The European model, with revenue support mechanisms like "cap and floor" schemes, demonstrates a path to attracting private investment, but geopolitical risks pose a potential threat to future projects.