The cost of capital is among the most important variables determining the feasibility of investment in renewable energy projects. In Australia's National Electricity Market, the ability of new variable renewable energy (VRE) plant to arrange requisite project finance at favourable rates largely determines project viability. Such financings are typically only achieved when VRE projects are underpinned by long-dated Power Purchase Agreements (PPA), under which prices are guaranteed by an investment-grade counterparty. In this article, we quantify the relationship between PPAs, counterparty credit quality and the cost of capital in the context of Australia's energy-only wholesale market under conditions of policy uncertainty. Our analysis benefits from the application of confidential data from Australia's capital markets. We find higher credit quality drives higher gearing, and somewhat counterintuitively, lower expected returns to equity. This in turn produces a lower cost of capital and by implication, higher post-construction VRE plant valuations. This outcome may appear to be at odds with Modigliani and Miller's classic 1958 article but of course it is not, risk has merely been repackaged and reallocated.

资本成本是决定可再生能源项目投资可行性的最重要变量之一。在澳大利亚国家电力市场，新的可变可再生能源 (VRE) 工厂以优惠的利率安排必要项目融资的能力在很大程度上决定了项目的可行性。此类融资通常仅在 VRE 项目以长期购电协议 (PPA) 为基础时才能实现，根据该协议，价格由投资级交易对手担保。在本文中，我们量化了政策不确定条件下澳大利亚能源批发市场背景下购电协议、交易对手信用质量和资本成本之间的关系。我们的分析得益于澳大利亚资本市场机密数据的应用。我们发现更高的信用质量会推动更高的负债率，并且有点违反直觉，会降低预期的股本回报率。这反过来会产生较低的资本成本，并暗示建设后的 VRE 工厂估值较高。这一结果似乎与莫迪利亚尼和米勒 1958 年的经典文章不一致，但当然不是，风险只是被重新包装和重新分配。