IDEA’s Energy Sector practice focuses on a few key areas which offer the potential to make a difference to the quality of human life on the planet in the medium term and the pursuit of which can be very attractive for the energy investor be it public or corporate.
Renewable Energy is one of our main areas of practice. We can provide advice and guidance to determine the feasibility of, mobilize investment for and help bring to market, innovative solar, wind, geothermal and other technology and capacity. For coal which is being marked as the fuel of choice in some major demand growth markets, we provide expertise for mining the coal more efficiently, cleaning and transporting it more benignly to the environment, and burning it more cleanly. As part of our offsets practice we help to source offset opportunities for US and other purveyors of nuclear power plant and equipment.
In electricity we also provide special expertise on distribution, transmission and system operation issues. This includes design and implementation of the legal and regulatory framework for high demand growth markets, tariff regimes for improving demand side management and social safety nets, wholesale power purchase agreements, competitive electricity markets, private public partnerships. In oil and gas our focus is transportation and storage and environmental remediation. DEA also has a small practice in ammonia and phosphate fertilizers where we do feasibility studies and transactions
DEA’s expertise in Renewable energy includes three areas of focus: Feasibility studies for the renewable energy investments, Legal and regulatory framework for alternative energy, mobilizing investors for alternative energy projects. We do feasibility studies for solar, wind and geothermal power projects and help with the choice of location technology, commercial agreement (power purchase agreements) and the mobilization of the required financing.
However, the feasibility of the project is dependent not on the technology or size alone but also very much on the legal and regulatory environment of the project. Several issues need to be resolved in the regulations for an investment to be viable, for example, net metering in a grid tied system requires a clearly defined regulatory framework on how a solar power system is connected to the grid, how solar-generated electricity is banked on the grid, who is certified to install solar power and who can allow or prohibit off grid or grid tied solar power installations. Regulations in some areas require grids to pay for excess power at avoided cost or wholesale cost but may also allow all power sent to them only at wholesale. The producer can then buy it back at somewhere above wholesale or retail. Some systems might impose a monthly reset so the producer can’t bank power in the low season to use in the peak.
These regulations could significantly impact the viability of Solar, Wind and mini Hydro (run of river) producers. We can help producers, local authorities and governments to work through these issues and find an optimum solution and help to make the investment viable. We can help mobilize the investors for renewable energy projects and set up power purchase agreements to support the financing at sustainable costs. Through our alliances with green energy firms, we can offer our clean development expertise to support the financing of these projects through carbon offsets and credits.
Coal is here to stay for the foreseeable future. Over 40% of US power production is from coal. The two major energy demand growth countries are reportedly following a strategy where coal is going to be the major fuel. In one country 80% of the over 100,000 MW of planned new capacity is predicted to be from coal and while major railroads are being built in some places to carry the coal to the power plants, shortages abound. To all this there is an environmental cost.
We offer the world class expertise needed to modernize existing mines and mobilize the investment and technology needed to achieve the required economies of scale for coal use at this scale. We can also help design the regulations which protect the environment while this coal is prepared and transported for power generation, without stifling the needed capacity growth. We advise on labor and social welfare issues for miners as well as expertise in SH&E best practices.
We can provide world class expertise to Governments and producers to help develop, finance and implement “Clean Coal” strategies. We help evaluate the feasibility of projects such as coal gasification, carbon recapture and fixing etc., but most importantly, we can offer our clean development expertise to support the financing of these projects through carbon offsets and credits.
- See also our page on: Mining & Metallurgyd
Distribution & Tariffs
No business can be viable unless the cash register rings. In Electricity the cash register rings in Distribution. Improving viability in distribution strengthens the financial and operational health of the system and can increase availability and access at half to one third the cost of new generation capacity per KW. Viable Distribution can support the investments needed in Generation and Transmission. DEA’s services focus on improving distribution. We bring a wealth of international experience to help utilities reduce losses, both technical and non-technical, and improve viability, service and delivery. We have helped several countries and utilities to mobilize private participation and related investment in Distribution through management contracts, concessions and full privatizations. The introduction of private participation also requires changes in the regulatory framework and especially in the way tariffs are set. We are experts in this. We can help design tariff regimes that yield basic viability for the system while providing the necessary social safety nets.
At the transaction level we provide advice to governments and public utilities worldwide on economic, regulatory, technical feasibility, managerial and legal issues ranging from: (i) Identification and preparation of feasibility studies for the private provision of renewable Power Project development; (ii) Preparation and operational and financial evaluation of BOO/BOT and BOOT projects; (iii) Legal and regulatory framework development for PSP program, drafting of utility and regulatory legislation as well as Capacity Building of regulatory agencies; (iv); Restructuring and privatization of State Owned Enterprises (SOEs);(vi) Drafting of tender documents and preparation of prospectus (v) Bid-Bond Evaluation Procedures and Business valuation of assets; (vi) Joint venture partnership agreements; and the preparation of Information Memoranda.
The electric grid delivers electricity from points of generation to consumers: Through the transmission system from power plants to distribution substations and through the distribution system from distribution substations to consumers.
As businesses and homes begin generating more wind and solar electricity, enabling them to sell surplus energy back to their utilities, for energy consumption efficiency, real time management of power flows and to provide the bi-directional metering needed to compensate local producers of power, it beomes necessary to increase the connectivity, automation and coordination between these suppliers, consumers and networks that perform either long distance transmission or local distribution tasks. This is what smart grids do. They apply digital processing and communications to the power grid, making data flow and information management central to the smart grid. Even in the absence of alternative generation sources, smart grids can significantly increase the efficiency of the grid by better balancing demand and capacity and better operational monitoring and response to help reduce both technical and non technical losses in the system. ( Diagram: US Department of Energy)
DEA helps to facilitate investment in smart grids by evaluating the feasability of these investments, helping to structure, and mobilize finance for, smart grid projects.
Source: US Dept. of Energy
Oil & Gas
Floating Storage & Regasification Unit (FSRU)
This approach involves use of a floating storage and regasification unit (FSRU), which could be either a converted LNG carrier or purpose-built unit with a vaporization systeminstalled onboard. The FSRU would be positioned alongside a shore facility or moored offshore with pipeline connection to shore. LNG carriers would come alongside the FSRU and transfer LNG to the FSRU. No special equipment would be required on the LNG carrier to perform the cargo transfer. LNG transferred to the FSRU would be stored in its cryogenic tanks until re-gasified. Once re-gasified, the gas would be sent out by pipeline.
Converting a 1970s Class LNG carrier to an FSRU has been found to be an economical solution for a receiving/regasification terminal. As earlier indicated, converted LNG carriers have been employed as FSRUs in four receiving/regasification projects to date. Based on the known pricing data for the eight FSRUs now in service or under contract, the annual cost of an FSRU should be in the range of $0.011 per M3 of send out capacity
Fertilizers and Chemicals
Bio Gas, Coal Gasification
- Learn more: CDM Web site