Dalkia Solutions Blog

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United Kingdom - carbon tax

What’s the escalation rate on your PPA?

picture-7-300x176Recently a customer had us model the energy production and financial return for a new 2MW cogen system at their manufacturing site in the United Kingdom.

Our analysis considered their contract cost for kWh and natural gas, the system’s energy production in kWh and therms, its full installation and annual maintenance cost and their UK tax benefits, including a reduced carbon tax from the UK’s Carbon Reduction Commitment.  All in, the capital investment had a simple payback of 2.3 years.

When we built the system’s 10 year PPA model there was one big question – what escalation rate for kWh and gas should we use?

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United Kingdom – new Carbon Tax impact on Corporates

A few months ago one of our customers told us that they were facing a significant carbon tax for their United Kingdom based operations.  With a newly implemented UK carbon taxation policy they expected to pay @ $750k for their 60+ facilities located throughout the UK.  I decided it was well worth a quick trip to learn more and now after a few days of meetings here in London, I understand a bit more about this program.

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