Public–private partnerships value in bioenergy projects: Economic feasibility analysis based on two case studies

Greece and Italy are facing serious energy challenges concerning sustainability and greenhouse gas emissions as well as security of supply and the competitiveness of the internal energy market. These challenges require investments by the public sector, while the countries have seen in the last years their debts rising. A solution to promote bioenergy business, without rising public debt, could be the use of PPP (Public–Private Partnership). This paper presents a methodology to develop agro-energy business using PPP in two rural areas: the municipality of Evropos (in Greece) and the municipality of Montefalco (in Italy). At first biomass availability is studied, then the optimal technology is selected. Once technological issues have been analyzed PPP value for money has to be assessed. Conventional methods to evaluate economic viability of a project are not enough and a Public-Sector Comparator (PSC) has to be calculated. Typical risks of bioenergy projects are identified, estimating their probabilities and consequences. This will lead to associate a monetary value to each risk. Then the identified risks are allocated among private and public partners, establishing synergies. The allocation of risks will have consequences on the preparation of PPP contract and on partner selection procedure.