NREL is a national laboratory of the U.S. Department of Energy, Office of Energy 

Efficiency & Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.

Contract No. DE-AC36-08GO28308

A Framework for Project 

Development in the Renewable 

Energy Sector

Robert Springer 

Technical Report

NREL/TP-7A40-57963

February 2013
NREL is a national laboratory of the U.S. Department of Energy, Office of Energy 

Efficiency & Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.

National Renewable Energy Laboratory

15013 Denver West Parkway

Golden, Colorado 80401

303-275-3000 • www.nrel.gov

Contract No. DE-AC36-08GO28308

A Framework for Project 

Development in the Renewable 

Energy Sector 

Robert Springer 

Prepared under Task No(s). 2900.3014 and WFC5.1000

Technical Report

NREL/TP-7A40-57963

February 2013
NOTICE

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iv

Acronyms and Abbreviations

BEPTC Baseline, Economics, Policy, Technology, Consensus 

COD commercial operation date

FC financial close

NEPA National Environmental Policy Act 

NPV net present value 

NREL National Renewable Energy Laboratory 

PPA power purchase agreement 

RFP request for proposal 

SROPTTC Site, Resource, Off-take, Permits, Technology, Team, Capital
v 

Table of Contents

Acronyms and Abbreviations ................................................................................................................... iv

List of Figures ............................................................................................................................................ vi

Executive Summary.................................................................................................................................. vii

1 Introduction ........................................................................................................................................... 1

2 Key Project Development Concepts................................................................................................... 2

2.1 Concept #1: Project Motivation....................................................................................................... 2

2.1.1 Pre-development ............................................................................................................... 2

2.1.2 Establishing Project Motivation with BEPTC .................................................................. 3

2.2 Concept #2: Project Development Framework................................................................................ 5

2.2.1 Seven Essential Elements of Project Development—SROPTTC..................................... 6

2.2.2 Project Development Environment................................................................................... 7

2.2.3 Iterative Approach/Incremental Investment...................................................................... 9

3 Process: Applying BEPTC and SROPTTC....................................................................................... 12

3.1 Further Assumptions...................................................................................................................... 12

3.2 Defining the Role of Project Host or Sponsor ............................................................................... 12

4 Generic Example of BEPTC and SROPTTC Framework and Process Approach ........................ 14
vi 

List of Figures 

Figure 1. General iterative process concept in project development ................................................... 5

Figure 2. Three phases of project lifetime and corresponding milestones.......................................... 8

Figure 3. Project stages with risks and unknowns ................................................................................. 8

Figure 4. Iterations of SROPTTC framework in the development stage ............................................. 10

Figure 5. Iterations of SROPTTC framework and incremental investment decisions ....................... 11

Figure 6. BEPTC, SROPTTC, and development phases ....................................................................... 13

Figure 7. BEPTC and SROPPTC process diagram with 10 steps ........................................................ 14
vii 

Prior to embarking on the 

specifics of any particular 

project, it is essential to gauge 

the fundamental market 

characteristics that create the 

conditions for success and 

provide sufficient support to 

generate what we call "project 

motivation."

Executive Summary

The development of renewable energy generation projects has become attractive to a variety of 

energy consumers, installations and large institutions, land and real estate owners, and others

(collectively referred to herein as the project "sponsor" or "host") who recognize the economic, 

environmental, and/or security potential of renewable energy. Whether the aspiration is for 

projects large or small, and regardless of whether the host will ultimately finance and build the 

project themselves, each will find it necessary to take on the role of project developer during the 

early stages of project development. 

The size and diversity of potential project sponsors is significant, including but not limited to, the 

federal government and the military (including all its agencies and departments, facilities and 

installations); public and private universities and colleges; local and state governments; tribal 

nations; private and public companies from sole proprietorships to Fortune 500 companies; real 

estate investment trusts to private individuals; nonprofits and nongovernment organizations. It is 

rare to have resident professional energy project development experience within the vast 

majority of these new market participants—many of whom have largely dealt with electrical 

energy by simply "paying the bill," and now are motivated to consider the relatively radical 

change of "producing their own," or at least participating in a project in some meaningful way. 

The concepts, descriptions, diagrams, and acronyms developed and described herein are meant to 

provide a contextual framework as well as a systematic, repeatable process to assist a potential 

project sponsor in understanding and navigating early-stage project development. Professional 

project developers will recognize these concepts and hold them as intuitive and even obvious, 

though the fundamentals of this specialized field are rarely written down and defined as they are 

here. 

Project development is primarily viewed as an entrepreneurial activity, subject to significant 

risks and unknowns while requiring ongoing investment of time, financial, and even political 

resources toward output that consists of completed 

projects. 

Prior to embarking on the specifics of any particular 

project, it is essential to gauge the fundamental market 

characteristics that create the conditions for success and 

provide sufficient support to generate what we call 

"project motivation." A motivated project is one that has 

a clear pathway to success and enough opportunity that it 

simply cannot be ignored. It is driven by some baseline 

need or interest in completing the project, the fundamental 

economics of energy in the area, existing policy environment (both internal and external to the 

project sponsor), and available commercial technologies and renewable resource. This 

assessment and communication of fundamental project motivation is referred to using the 

acronym "BEPTCTM" for Baseline, Economics, Policy, Technology, and Consensus.1

 Consensus 

with project stakeholders is ideally built around the four previous characteristics. 

 

1 BEPTC is a trademark of the Alliance for Sustainable Energy, LLC, the operator of NREL. 
viii

To manage development risk, 

fatal flaws absolutely need to be 

identified and analyzed quickly 

and accurately to avoid 

investment of scarce risk capital 

into "bad projects" and to 

conserve these resources. 

With project motivation clearly established and communicated using the BEPTC framework, one 

can seriously approach a specific project with purpose and confidence that the first incremental 

investment in the project (in time, financial or political capital, etc.) is worthwhile. It is 

immediately clear that all expenditures are subject to the risk 

of complete loss, and this risk must be recognized and 

managed. In response, a key tenet of early-stage 

development is fatal flaw analysis. To manage development 

risk, fatal flaws absolutely need to be identified and 

analyzed quickly and accurately to avoid investment of 

scarce risk capital into "bad projects" and to conserve these 

resources. This concept shapes the process of moving a 

development project forward. 

Project development now begins in earnest; it is essential to have a clear understanding of the 

overall context and operating environment, a framework with which to organize and interpret 

information, an iterative process and fatal flaw analysis that mitigates risk while incrementally 

moving the project forward, and tools that support and inform decisions, monitor project 

motivation, and do so in a regular, repeatable, disciplined manner. 

NREL has defined the seven core subject areas of renewable projects to be: Site, Resource, Offtake, Permits, Technology, Team, and Capital—and describe each in more depth in the sections 

that follow. These core areas form the informational framework, and are the source of the 

acronym "SROPTTCTM," which has come to represent collectively all of the environment, 

framework, processes, and tools of project development.2

 

The principles and concepts represented by BEPTC and SROPTTC in their entirety are universal 

to the project development process and essential in successfully managing development risk. 

 

2

 SROPTTC is a trademark of the Alliance for Sustainable Energy, LLC, the operator of NREL. 
1 

1 Introduction To establish a common understanding and language around the fundamental principles of project 

development two concepts need to be developed—project motivation and the project 

development environment. This report details each of these concepts by using the National 

Renewable Energy Laboratory (NREL)-developed BEPTC and SROPTTC frameworks to 

highlight and support the predevelopment and development processes and activities each 

renewable energy project should undergo. 

The author is writing this for primary use by an employee or decision-maker in a project host or 

sponsor role who is considering the pursuit of an on-site renewable energy project of some 

significant scale. While larger-scale renewable project development is most obviously in need of 

an intensive development management scheme, the general principles and practices are 

applicable on projects of any size. 

The first concept is project motivation—a motivated project is one that has a strong basis to 

come to fruition and is built on economics and risks that are acceptable to all parties; supportive 

policies and an execution pathway; and project “bankability.” The five essential areas for strong 

project motivation—Baseline, Economics, Policy, Technology, and Consensus—are referred to 

as BEPTC. 

The second concept is developing a contextual framework and mapping an established, 

repeatable, disciplined process for project development that is consistent with professional 

commercial practices. The seven essential areas for strong project development—Site, Resource, 

Off-take, Permits, Technology, Team, and Capital—are referred to as SROPTTC. 

Section 2 details each of the key concepts of project motivation and project development in more 

detail.

With the general concepts of project motivation and project development introduced, project 

hosts and/or sponsors need to take the time to consider the concepts in action and begin thinking 

about how to apply them. Section 3 provides details and examples for applying the BEPTC and 

SROPTTC concepts.
2 

2 Key Project Development Concepts

The two major concepts to establish a common understanding and language around the 

fundamental principles of project development are project motivation and the project 

development environment. 

A motivated project is one that has a strong basis to come to fruition and is built on economics 

and risks that are acceptable to both parties, and includes supportive policies, an execution 

pathway, and project “bankability.” 

The second concept is a framework and mapping of an established, repeatable, disciplined 

process for project development that is consistent with professional commercial practices. These 

concepts are discussed below in greater detail and address the high-level steps for government 

agencies and private companies (together known as a “project host”) to consider when 

approaching renewable energy project development. 

2.1 Concept #1: Project Motivation 

What we call “project motivation” is created through strong fundamentals and provides the 

source of commitment and clarity of purpose that are necessary to both generate the resources 

required to develop a project and the perseverance required to make it happen. Without properly 

establishing project motivation, the necessary resources (funding and skilled human resources) 

will not be brought to bear. A fundamental, but common, mistake in early-stage project 

development is to jump to technical or financial details prior to building consensus among 

project stakeholders and establishing project motivation that is sufficient to maintain a sustained 

effort backed by common purpose. 

2.1.1 Pre-development

As described earlier, to achieve its goals, the project host or sponsor is likely to engage a 

professional renewable energy installer or provider, and must be perceived as an attractive 

transaction partner to the renewable project developer community to mobilize the private 

investment necessary to move projects forward. 

Given the state of the industry and the current financing environment, there is a limited volume 

of project development risk capital and project finance capital available in the market (this is 

always the case, but markets are more restrictive in 2011). The entire energy market is 

competing for these same limited resources. Projects that are presented to the private sector with 

unacceptable levels of uncertainty stemming from undefined development risk, or fundamental 

project characteristics that are not commercially acceptable, will not likely proceed any further. 

To overcome the challenges of the competitive market, a project should go through a 

“predevelopment” process in which the project is qualified in accordance with industry (and 

financier) standards, thereby decreasing early-stage development risk. A properly executed 

predevelopment program will produce a very well-defined, attractive development opportunity 

that garners multiple competitive bidders willing to fund the remaining development activity and 

shoulder the remaining risks. Establishing the motivation and key factors for a project’s success 

is essential to generate the resources and expertise necessary to execute the project during this 

predevelopment stage. 
3 

Any entity, public or private, that is the sponsor, host, or contractual counterparty for the project 

needs to function as an early-stage project developer during the predevelopment stage, either 

through direct resources or in conjunction with the owner’s representative role. This effort will 

require financial and human resources and expertise, and may typically amount to 1% to 2% of 

the total project costs (including hard and soft project costs). 

2.1.2 Establishing Project Motivation with BEPTC

In simple terms, the five essential areas for strong project motivation listed below have been 

referred to using the acronym BEPTC, building off of the titles of Baseline, Economics, Policy, 

Technology, and Consensus. 

Although there is no particular magic in the acronym itself, it is used to refer to the collection of 

activities, essential data, and ultimate outcome of establishing a strong basis for project 

motivation. 

When the private sector engages in project development activities, “project motivation” is 

established using the principles of BEPTC but are referred to with the commercial term “market 

study.” As for-profit commercial enterprises, these companies invest in up-front studies to 

identify areas of opportunity in various markets, and then use the motivation and knowledge 

generated from that analysis to pursue project development activity (meaning investing further 

resources). 

We will use this convention throughout this document when referring to establishing project 

motivation. 

Baseline. First, state the fundamental reason(s) the project is necessary or desired. An 

objective analysis of energy supply reality and/or clear statement of specific goals are 

typically where this baseline can be found. The simpler the statement is the more powerful 

and useful it is. A colorful example for the state of Hawaii might be, “For energy and 

economic security, we can no longer rely on burning tankers of foreign sourced petroleum on 

a month to month basis.” In this single statement, the motivation is clearly articulated and 

very hard to get away from—this type of clarity captured in one sentence provides a 

grounded, fundamental statement of purpose. A general rule of thumb would be to define the 

baseline within one or two sentences. 

Economics. A reasonable and objective analysis of fundamental energy economics must be 

established both in terms of the total costs of acquiring energy from existing sources (selfgenerated or utility based) and from the proposed sources as comparison. If there are 

negative economic differences between the existing and proposed sources, even just in the 

initial years of operation—and those differences are not acknowledged and dealt with 

upfront—the project will suffer later in the process. Relying on the project development 

process and/or a financing miracle to overcome the economics will rarely, if ever, result in 

success. As a rule of thumb, if a project does not have 20% to 30% of margin above general 

cost estimates to accommodate profit and uncertainty at the concept stage it very well may 

not have supportive economics. Should this be the case, mitigation steps or a strategy to 

alleviate this must be established. 
4 

Policy. Federal, state, local, and regulatory policy environments must be examined for 

barriers and addressed prior to expending significant resources pursuing a project. The 

project and steps taken to mitigate, remove, or deal with these policies to create the 

conditions for success are imperative. Without identifying policy issues and, at a minimum, 

forming strategies and tactics to overcome these challenges, investing resources in a project 

is at best risky and needs to be acknowledged as such, and at worst, ill-advised and likely 

will be lost altogether. 

Technology. Fundamental technology assessments and analysis may be the most 

straightforward part of establishing project motivation. Resource assessments that 

characterize the renewable resource for a specific site might be available from a simple 

desktop study. Assessing commercial technologies, reliability, and bankability may require 

more, but still relatively minimal, effort. Once a portfolio of available resources and 

commercial conversion technologies has been established, it is necessary to defend against 

nonbankable or unrealistic early-stage technologies from confusing or distracting the project 

leadership or stakeholders from making decisions and taking action. 

Consensus. Building off of the final point of the Technology section above, communication 

and consensus-building among stakeholders of a project is vital. To generate buy-in, a 

common understanding of the project fundamentals, and a unification of purpose is essential; 

the project development process will involve many parties’ input, investment, and possibly 

compromise. Without consensus and communication efforts, precious resources will not be 

made available, and stakeholders can become adversaries to the project before it even 

begins—the stage when a project is most vulnerable. 

With project motivation established and defined using the principles of BEPTC, it is likely very 

clear that there is reason to pursue the identification and development of a specific project or 

projects, and because the motivation is defined and understood, support will be available to 

undertake this effort. Specific technologies (and therefore renewable resources) have been 

identified; policies examined or changed to create a pathway to execute projects, stakeholders are 

engaged and supportive of these details and there is a fundamental understanding of what drives 

the organization to pursue energy development. 

It is typical to measure or score project motivation in financial terms—net present value (NPV) 

is used commonly by industry. The theory is that all aspects of the project can be represented in 

financial terms and, through the use of a pro forma, can be measured and tracked over time. This 

is not entirely true in all circumstances, but it does generally provide a consistent, rolled up 

measure of relative project motivation. 

The process of developing a project from concept to completion is both iterative (see Figure 1) 

and cumulative as additional information is acquired and unknowns are eliminated. The 

confidence level associated with project motivation increases as incremental investments are 

made and the project becomes more defined. In general, more motivation (higher NPV) is 

needed at the earliest stages of development to compensate for uncertainty. 

Project development can now commence in earnest, and as individual opportunities are identified 

the use of the SROPTTC framework (introduced next), recognition of the development 

environment, including risk profiles, and activation of a process that mitigates risk can begin. All 
5 

of this is taking place with the support of specific tools, like pro formas and development 

checklists. 

 

Figure 1. General iterative process concept in project development

2.2 Concept #2: Project Development Framework 

The second key concept we seek to introduce is a framework that provides the basis of an 

accepted approach to establish a regular, repeatable, documented project development 

methodology that has its foundation in commercial project development practice. One of the 

important drivers of this methodology is the risk profile of the development process, which 

differs from the other major stages of project evolution. This is designed to establish a common 

understanding of the process over time and the ability to map project progress, and provides 

context to decision makers. 

It is especially important to reiterate that the early project development steps are conducted and 

led by the sponsoring entity or project host. The risks of early-stage development may not be 

obvious, and need to be well-understood—this is the driver of using the SROPTTC framework 

and processes—to manage development risk. Without explicit acknowledgment and management

of this risk, poorly executed early-stage development activity and investment could lead to either 

the misguided execution of poorly performing projects or the unnecessary loss of investment that 

could be avoided and minimized early in the development process. 

Gather Best 

Known 

Information

Measure Motivation 

(Calculate NPV) with Pro 

Forma

Evaluate Go 

Forward/Stop 

Decision

Make 

Incremental 

Investment

Gather New Data

Measure Motivation 

(Calculate NPV) with 

Pro Forma

Evaluate Go 

Forward/Stop 

Decision

Repeat iteratively, using 

development framework 

as guide and project 

motivation as driver.
6 

2.2.1 Seven Essential Elements of Project Development—SROPTTC

To establish a framework, we start by introducing the seven essential elements of the project 

development process and activity. The seven areas NREL developed and defined are referred to 

as SROPTTC building off the titles of Site, Resource, Off-take, Permits, Technology, Team, and 

Capital.

As with BEPTC, anyone can argue about the specific words and labels, but ultimately NREL 

maintains that the principles represented here are unavoidable, built from accepted business 

practices and professional experience in private project development investment and execution. 

It is on this framework of information and activity embodied in the seven elements that we hang 

the process, systems, and tools of project development, and will use as a convention throughout 

this document when referring to the project development process. 

Site. Without a physical location for the physical assets of a renewable power plant, a project 

will not happen. Beyond this simplistic idea comes the technical aspect of what financeable 

site control entails including, but not limited to, conveyed property rights, legal definition 

(through legal descriptions and/or accredited surveys), assignability (relating to financing 

requirements), length of tenure, terms and conditions, default and cure clauses, and other 

fundamental contracting issues. Furthermore, there are the obvious physical constraints of a 

site, which include but are not limited to: slope, vegetation, soil conditions, infrastructure, 

access, associated resource impacts, etc. All of these items must be considered in the context 

of site planning, highest and best use, and conflicting or competitive uses for the land that 

may relate to the mission of the facility itself. The level of detail necessary in all of these 

areas is on a sliding scale over time—starting at a broad level and ending with highly detailed 

information. 

Resource. The renewable resource being considered for the project needs to be characterized 

and understood at a level of detail and confidence appropriate to the stage of development the 

project has progressed to. For early feasibility assessments, a general assessment of resource 

availability is used, whereas for investment grade studies, highly detailed hourly or subhourly data and analysis may be used to establish and support resource availability, quality, 

and characteristics within a tight range of certainty. Developers may use maps generated by 

NREL for early-stage resource assessment, moving to technical correlation using 12 months 

of on-site data with long-term computer modeling of satellite-based datasets. 

Off-take. The buyer of both the energy and any other characteristics of output (like 

renewable energy credits) must be established and ultimately secured by contract, often a 

power purchase agreement (PPA) or other similar contracting method. Because of the 

complexities of financing and building renewable projects, we use the general term “offtake.” This term implies that there is an economic and executable agreement by the project 

parties, and that it is ultimately confirmed by written contract. If the project is in a regulated 

market, approval by a public utilities commission or other body may also be required. There 

are many details to off-take, many pathways to follow to a PPA agreement, and many 

financing implications along the way to generating a fully executed off-take contract. 

Embedded in this subject area is also the issues of transmission and interconnection, relating 

to the direct and ancillary infrastructure and agreements required to “get to market.” 

Confirming and ultimately consummating the financial relationships contemplated by the 
7 

original project motivation and concept in a PPA and related documents is a critical 

milestone in the process of project development. 

Permits. This encompasses all permits necessary for project construction and operation, 

including all federal requirements related to environmental regulations in the National 

Environmental Policy Act’s (NEPA) Environmental Assessment or Environmental Impact 

Study requirements; and state and local jurisdictional permits, including local entitlements, 

electrical contracting permits, and building permits. Generally, without strong development 

of the Site, Resource, and Off-take elements, significant investment is not made in permits. 

That said, it is an important element to understand from both a feasibility and risk 

standpoint—if a project has a high hurdle for permitting, and therefore includes significant 

permit or policy risks, it needs to be understood and executed with that knowledge in mind. 

NEPA risk, in the case of a federal project in particular, is generally unacceptable for 

renewable energy developers who may turn instead to the nonfederal market opportunities. A 

strategy to mitigate NEPA risk for the development community may therefore be essential 

for renewable energy project successes in the federal sector.

Technology. The technology area inherits the going-in assumption of technology developed 

in the BEPTC framework (i.e., this will be a photovoltaic, wind, or biomass project) and 

migrates to the investment in and engineering design, equipment selection, and procurement 

activities. Common stages of engineering design include conceptual and design development, 

and construction documents with full specifications for bid and contract procurement. All of 

this activity requires investment into the design process and evolves incrementally as further 

investment is deemed warranted for the project. 

Team. Assembly of a fully qualified team that address all business, technical, financial, 

legal, and operational aspects of a renewable energy project is an essential final step prior to 

raising debt, equity, and incentive/grant program capital. Proven experience and capability 

are key elements to most investment decisions by qualified investors. 

Capital. With all other elements in place, Site, Resource, Off-take, Permits, Technology, 

and Team, the project will attract the financial resources necessary for final development, 

construction, commissioning, and initial operations (through stabilized cash flows after the 

commercial operation date [COD]).. This is the final step as described in this framework, but 

it is important to reiterate that capital requirements do not begin at construction but are 

engaged at incremental points along the development process. Here, capital refers to both the 

predevelopment and development stages, and then in a financial closing that includes the 

financing required through construction and initial operations. 

2.2.2 Project Development Environment

Taking SROPTTC into a time-based process environment is helpful to see how to use the 

framework to organize and execute a disciplined project development process. First, for context, 

we’ll establish the three distinct phases of activity for projects, and the milestones that separate 

and define them. As shown in Figure 2, a project goes through a development stage, project 

finance (construction) stage, and an asset stage. 

Site, Resource, and Off-take are the core elements of project development. Together they 

create value that promotes further investment. Securing these three elements by contract is 

a significant milestone for a project developer.

_____
8 

 

Figure 2. Three phases of project lifetime and corresponding milestones

During each stage, different capital is employed due to the nature of the risk/return relationship 

in financial terms and the capital market segments that have an appetite for particular investment 

types and tenure. Between the stages are two key milestones—first is financial close (FC), where 

project financing transitions between development risk capital and project finance. Once the 

project has been constructed and is operating, it has reached its COD and enters the final stage as 

an asset. From this time forward, it can be traded and financed using asset finance. 

It is the difference in risk profile that begins to distinguish the capital involved in these stages, 

and therefore also distinguishes the methodology of dealing with risks in each of the three areas 

of a project’s life. The major sources of risks in projects are the “unknowns.” The level of 

unknowns in a project are very high in the early development stages of the project (far left of 

Figure 2), when compared to the far right side when the project is an operating asset with known 

characteristics and a proven track record. It is easy to assume that risk follows the same 

pattern—generally declining left to right over time as a project matures. This is a key element of 

departure, a nuance to the development process and milestones as described in Figure 2—in fact, 

risk begins to take on a different profile when mapped over time, as shown in Figure 3. 

Figure 3. Project stages with risks and unknowns 

Our intuition around risk and unknowns is not served during the development stage, resulting in 

the counter-intuitive adverse relationship between risk and unknowns as shown in Figure 3. The 

primary cause of this disconnect is that the capital investment in the development process is 
9 

made incrementally and cannot earn a return until FC. All funds invested in the development 

process have to be considered at risk for total loss; therefore the risk profile ratchets up as this 

investment is made. In contrast, investment in the project finance phase is made in full, or at least 

committed, at the financial closing milestone. It is accepted as a condition precedent that all risks

are well identified, allocated to, and mitigated by project participants at this point in the process. 

The unique risk profile of the development costs drives the process methodology, which we will 

discuss next. 

2.2.3 Iterative Approach/Incremental Investment

The nature of the risk profile for predevelopment and development investments drives an 

incremental, iterative approach to project development. Using the framework subject areas of 

SROPTTC, a project is put through an analysis of known and available information supported by 

necessary and reasonable assumptions. The nature of this work is a fatal-flaw analysis that seeks 

to determine fatal flaws and identify areas of significant risks to project completion. 

The first iteration consists of confirming and documenting what is known in the framework 

elements of SROPTTC, and then casting that information in a format that can be used to inform 

the decision of whether to invest further in the project or stop in favor of alternatives that deliver 

the same or similar results identified in the BEPTC analysis. 

Two core tools are typically used in support this analysis—a development checklist and a 

development pro forma. The development checklist provides a basis of issues to be checked and 

resolved, and typically evolves and grows with experience (such that new items are added from 

lessons learned on each project). The pro forma is used to begin to cast the information and data 

collected and organized within the SROPTTC framework in financial terms, which can then be 

used to measure and evaluate the project’s attractiveness throughout the development process 

relative to both project motivation and risk. These tools will be discussed in further detail later in 

this document. 

Turning to Figure 4, we focus on the development stage of the project, and add the SROPTTC 

framework running left to right over time representing the development of greater amounts of 

detail (and less unknowns) over time as the project is fully developed. Using the SROPTTC 

framework and the help of a development checklist and experienced personnel, information is 

aggregated and captured through a financial representation in a pro forma. 
10 

Figure 4. Iterations of SROPTTC framework in the development stage

Figure 4 shows the major elements of each successive iteration: investment in the generation and 

definition of key information and data within the SROPTTC framework. This is done using the 

development checklist as a guide, the resulting pro forma as a consistent point of measure, and 

an ever-present fatal flaw assessment of what was learned relative to the risks and reward 

(project motivation) of the project. Each assessment asks the questions: 

• Has a potential fatal flaw been identified? If so, should the project be stopped, or would 

an acceptable investment potentially mitigate or eliminate the flaw? 

• Have major risk areas been identified? If so, how can these risks be better quantified and 

mitigated? What are the costs allocated to mitigate risks, and are they sufficient?

• Where are the unknowns, and how can they be further mitigated? 

• Where would the next dollar of investment in time and/or money be best applied to 

reduce unknowns, mitigate risks, and develop key information? 
11 

Should the project still be considered viable and worth pursuing further, the process is to 

evaluate the key areas of incremental investment that will most efficiently increase the chances 

of success—or limit the downside of failure through early identification of fatal flaws to end 

investment in a project with poor chances of success. This process is repeated iteratively, making 

incremental investments and judgments amounting to “Go Forward/Stop” decisions between 

each iteration. The result is a series of incremental investments followed by assessments that 

systematically evaluate the information organized within the SROPTTC framework subject 

areas, define key parameters of the project, and drive unknowns from the system (see Figure 5).

Figure 5. Iterations of SROPTTC framework and incremental investment decisions 
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3 Process: Applying BEPTC and SROPTTC 

With the general concepts of project motivation and our project development framework 

introduced, it is time to consider these in action and begin thinking how to apply them. Because 

of the many stakeholders and roles involved, it is a complex system; a simple, linear process is 

not entirely accurate—the system is complex and variable enough that it cannot be described in 

infinite detail without becoming cumbersome and unusable. We aim to take a simplified but 

balanced approach and introduce the reader to the fundamentals in a variety of formats, then 

build on those fundamentals and illustrate with a project example. 

3.1 Further Assumptions

As noted in Section 1, the information in this report is primarily for use by an employee or 

decision-maker acting for a project host or sponsor that is considering the pursuit of an on-site 

renewable energy project of some significant scale. 

It is our assumption in this section that the project is expected to be funded by private financing, 

using one or more finance mechanisms prevalent in the renewable energy market: PPA, or in 

federal or other government applications such as Energy Savings Performance Contracts, Utility 

Energy Service Contracts, Enhanced Use Lease, or others. It is assumed that the procurement of 

the project will occur through some form of competitive bidding framework, like a request for 

proposal (RFP) format (which we will use here as a proxy for the process of transferring the 

primary development risk from the sponsor or host to a third party). 

All of these stated assumptions are made to simplify this discussion, and the general process 

described applies to the many variations on this theme that are available. Engaging with a project 

development expert will help translate these elements for a given situation. 

3.2 Defining the Role of Project Host or Sponsor

As discussed earlier, to gain the benefit of third-party investment into renewable projects on 

public or private sites, the project must present an attractive opportunity to the renewable energy 

development and investment community. To do so, we maintain that only a well-defined project 

that has gone through a predevelopment process that mirrors the commercial development 

process should be presented for action through an RFP or other procurement methodology. Thus, 

we have developed the BEPTC and SROPTTC frameworks, which are built off of professional 

project development business practices, to provide guidance and a reference point for those 

leading the process. 

Predevelopment is made up of stages that are described many ways; we use due diligence, 

feasibility, and conceptual project development stages—followed by a fully engaged project 

development and investment effort in a highly qualified and well-defined opportunity. It 

represents the earliest stages of development, and the most risky investment for third-party

developers. By taking on the role of the project developer in the predevelopment process, the 

project host or sponsor effectively de-risks the project opportunity, providing a better-defined 

and more attractive opportunity to the market.

In Figure 6, we introduce BEPTC as well as more detailed descriptions of development phases to 

our series of process diagrams, bringing more clarity to the overall process. To this we will add a 
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representation of the host or sponsor’s role in transitioning to the renewable developer through 

an RFP process.

Figure 6. BEPTC, SROPTTC, and development phases

The question of roles and timing of the transition from host to project developer investment in a 

project opportunity does not have a simple, universal answer. There will be unique aspects to 

most projects in the near future that will drive the specifics of that decision. 

We offer the general guidance in Figure 6, which shows a transition point within the conceptual 

project development stage—with the host or sponsor developing project motivation to mobilize 

the resources required to get through the predevelopment stage, as well as ongoing participation 

as a transaction counter-party after the RFP date (an RFP being used here as a proxy for a 

procurement process). This acknowledges that an RFP does not define the end of the host or 

sponsor role—ongoing resources and expertise will be necessary to provide a strong and 

effective partner throughout the remaining development process. 
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4 Generic Example of BEPTC and SROPTTC 

Framework and Process Approach

As shown in Figure 7 below, it is possible to conceptualize a 10-step process to describe the 

major steps suggested by our BEPTC and SROPTTC framework approach. Note that when 

considering a large-scale renewable energy project using this outline of steps, experienced 

assistance and proven tools are essential to navigate the pitfalls of process and to inform key 

decisions throughout. 

Figure 7. BEPTC and SROPPTC process diagram with 10 steps

Step 1: Establish project motivation using BEPTC. 

Project motivation is essential to establish a firm foundation of purpose that is based on agreedupon fundamentals and will generate the commitment of resources necessary to attract private 

investment, both project development capital and project finance capital, into renewable energy 

projects.

Step 2: Initial project assessment for fatal flaws using SROPTTC framework as a guide. 

Concentrating on the issues of Site, Resource, and Off-take, and the related issue of economics 

and bankability, conduct a high-level assessment of the seven SROPTTC subject areas with the 
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purpose of identifying fatal flaws, significant areas of risk, and gaps of information. Engage 

experienced advisors to guide this process using established tools and professional opinion. 

Step 3: Incremental investment decision. 

With the assessment conducted using the SROPTTC framework, determine what has been 

learned and, using the output of a pro forma economic analysis, determine if sufficient 

motivation exists to continue forward with an incremental investment. If so, direct investments to 

most efficiently take the project forward to the next decision point. 

Step 4: Further predevelopment work deploying investment from Step 3, using SROPTTC as a 

guide. 

Invest time and resources to more fully develop information within the SROPTTC framework, 

concentrating on the incremental investment suggested by the prior iteration. Use SROPTTC to 

concentrate on verifying Site, Resource, and Off-take elements while continually seeking fatal 

flaws in Permit, Technology, Team, and Capital, and pursuing mitigating actions for risks across 

the project.

Step 5: Incremental investment decision. 

With the second assessment conducted using the SROPTTC framework, determine what has 

been learned and, using the output of a pro forma economic analysis, determine if sufficient 

motivation exists to continue forward with an incremental investment. At this point, it should be 

clear that Site conditions, Resource, and Off-take arrangements are bankable and economic.

Step 6: Further predevelopment work deploying investment from Step 5, using SROPTTC as a 

guide. 

The result of this iteration should be a project plan that addresses and defines the known 

elements of SROPTTC in preparation for delivery to the private sector in a potential procurement 

or RFP process. References and documentation of the existing status should be in hand, 

sufficient for developers to assess remaining risks and development activity, as well as a clear 

and defined pathway to final approval and contract execution. 

Step 7: Go Forward/Stop on RFP process initiation. 

Based on assessment of the output of Step 6, a Go Forward/Stop decision should be made. The 

project needs to be judged to include acceptable and financeable risks by the private sector 

development community, using industry interaction or advisory as a reference to establish 

criteria. 

Step 8: Pursue private partner through RFP process, communicating SROPTTC fundamentals. 

Conduct a competitive procurement of the project, acknowledging the continued development 

process and agreement to work as an active transaction partner to pursue project completion.
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Step 9: Select and negotiate with awardee. 

Qualify, select, negotiate, and award the opportunity. 

Step 10: Ongoing partnership with private sector developer as transaction counterparty. 

Actively participate, with the support of ongoing resources, the development of the project in 

conjunction with the selected private sector development team to carry the project forward into a 

completed deal, mutually beneficial to both parties, and/or other project participants or key 

stakeholders (such as the local utility).