Power & Renewables Consulting

Challenge

A loan provider was in the process of approving an application for $300 million USD to finance a portfolio of close to 185 MW of aggregated C&I, and community solar plus battery projects across the US. Market expertise was needed for the due diligence of the applicant’s business model to assure that the loan would be paid back.

Solution

We analyzed the market fundamentals and key drivers for the deployment of solar PV plus storage for commercial and industrial (C&I) and community solar customers, which included an assessment of the Virtual Power Plant (VPP) market. Our review encompassed the federal and state policy landscape, examining the Inflation Reduction Act (IRA), Renewable Portfolio Standards, net metering policies, rebates, and other incentives at the state level. We analyzed the applicant project's revenue streams based on outlooks for long-term commercial retail rates across 11 states and renewable energy credits (RECs) for relevant markets, while also assessing the VPP component of the project and estimating potential revenue from the capacity market. 

Furthermore, we validated the assumptions behind key financial variables, such as Power Purchase Agreement (PPA) and lease rates, RECs (and other incentives), as well as capital expenditures (CAPEX) and operational expenditures (OPEX) for commercial solar and batteries. Finally, we reviewed the applicant's business plan, key contracts, and the competitive landscape, all while assessing risks and identifying mitigation measures.

Results

S&P Global provided expert, independent opinion, and support in reviewing the applicant’s business plan, financial model, and market conditions to assess viability and achievability of the project.

Challenge

A T&D Utility in Texas sought support to understand potential load growth in their service territories, enabling them to effectively prepare, plan, and anticipate necessary infrastructure development and upgrades over the next 20 years.

The client needed to assess the future power requirements driven by the rapid and ongoing growth in the Gulf Coast and North-Central service areas in Texas

Solution

We established and validated baseline demand for all service areas by leveraging various data sources and created a census tract-level heat map to visually represent this baseline demand. Additionally, we performed regional economic modeling to understand the underlying drivers of residential, commercial, and industrial growth projected through 2045. 

Our analysis focused on key demand segments, including datacenters, chemicals and refining, hydrogen, and electric vehicles (EVs). To enhance our forecasting, we developed hot summer and cold winter scenarios based on weather-adjusted scaling factors. The S&P Global team then compiled and delivered a comprehensive technical report summarizing the methodology, key findings, results, and implications of the forecast.

Results

S&P Global's forecast enabled the client to gain a clearer understanding of their future transmission and distribution (T&D) planning needs, facilitating more effective communication of these requirements to ERCOT, the Public Utility Commission of Texas, and other stakeholders.

Challenge

Saudi Aramco was in the process of monetization of its current and future sales of gas, ethane, natural gas liquids (NGLs), and its condensate pipeline network along with related assets. Saudi Aramco retained CERA Consulting to conduct an independent Commercial Due Diligence (CDD) study aimed at potential investors for this transaction.

Solution

We executed a comprehensive, bottom-up commercial due diligence workstream that involved an in-depth analysis of sales gas in the Kingdom of Saudi Arabia (KSA), with a particular emphasis on its uptake by the power sector. As part of this effort, we developed production forecasts for KSA sales of gas, ethane, natural gas liquids (NGLs), and condensate to project flow outlooks for the operating assets’ perimeter pipelines. 

Specifically, we created an hourly dispatch model to assess the role of natural gas in the future power generation mix of Saudi Arabia. We also provided S&P Global forecasts for supply, demand, and pricing as inputs to the financial valuation model. Additionally, the project included conducting multiple investor sessions that featured extensive Q&A segments to address and resolve investor queries.

Results

The Commercial Due Diligence report was well received by Saudi Aramco and made available to prospective investors. The project resulted in a successful transaction with Saudi Aramco closing a $15.5 billion infrastructure investment deal with Blackrock and Hassana-led consortium.

Challenge

A multinational conglomerate engaged CERA Consulting on a project to evaluate the suitability of their clean technology portfolio for decarbonizing and electrifying Brazil's industrial sector. The client wanted to identify the most promising industry segments and assess the financial viability, competitiveness and decarbonization potential for each segment.

Solution

We shortlisted seven industry segments based on their sub-segment's process-specific heat requirements, operating temperatures, and decarbonization potential. For each segment, we evaluated the availability and infrastructure readiness of four clean technologies: biomass and biogas combined heat and power (CHP), electric boilers, and heat pumps. 

Additionally, we estimated heat and electricity consumption and calculated CO2 emissions by analyzing energy and CO2 emission intensities. The financial viability of the four clean technologies in the shortlisted segments was assessed, along with the total addressable market size. Furthermore, we reviewed the competitive landscape in Brazil, taking into account the capabilities of the company's subsidiaries, and provided a shortlist of potential customers and partners.

Results

Our results highlighted the most suitable industrial segments for leveraging the client’s capabilities and presented a compelling business case around the most appropriate technologies for each segment. These insights served as a foundation for the client’s decision-making process and played a crucial role in shaping their go-to-market strategy.