S2NRG
the power facility , and the industrial host in return for allowing the company to use the underutilized assets . This business model has proved hugely successful thus far for S2NRG .
“ The hosts like it because it comes to them as EBIT , the very purest form of economics that you can get – they have no cost of capital , no operating costs and no COGS . The private equity firms like this model because it gives them interesting new distributed power plants to invest in that they wouldn ’ t normally have access to ,” says Bauer .
“ They also like it , because since we are not having to acquire land , we are able to reuse permits that our hosts have in place , our interconnect costs are much lower because the hosts have back connects to the grid . This allows us to connect in and back feed to the grid from interconnections already in place . Our cost of fuel for all intents and purposes is nearly zero
– because we are using energy that is being wasted by the process anyway .
“ It ’ s a subsidised cost of fuel because the host gets a royalty , but the cost of fuel is essentially zero so it makes these plants very
80 September 2016