Power & Renewables Consulting

Challenge

The power market in Guangdong Province, China, is experiencing rapid market reforms, and the South regional power spot market has initiated trial operations, including new settlement processes. In this evolving landscape, a major international oil company, which operates across multiple energy sectors, engaged CERA Consulting to provide insights into the power market in Guangdong. Our client’s interest spans their roles as an electricity consumer, an LNG provider, and also as a potential investor.

Solution

We conducted a comprehensive analysis of Guangdong's power market design, which included a thorough review of current market rules and an assessment of the milestones and directions of national, regional, and provincial market reforms. Our retrospective analysis of the five-year plan revealed the influence of policies on market development and capacity expansion. To address our client’s needs, we developed a capacity expansion and hourly dispatch model for the South Region, covering the period from 2023 to 2050. This model was based on aligned inputs, including demand projections, fuel and carbon pricing, policy outlooks, and technical conditions of power equipment. 

Additionally, we modeled two scenarios to reflect the impact on power systems of higher demand growth versus GDP-driven economic transitions and the accelerated development of renewables to meet Net Zero carbon targets. Our final deliverables included detailed output data tables illustrating trends in wholesale pricing and demand for gas power, along with a comprehensive analysis and calculation of retail pricing.

Results

Our work enabled our client's team to gain a comprehensive and in-depth understanding of Guangdong's power market. The market report and support provided through continuous communication and discussion, was crucial in refining their power procurement strategy and LNG sales plan.

Challenge

A leading global investment firm was seeking market advisory services for its commercial diligence of six utility-scale solar PV and energy storage projects located in California and Texas. The client required long-term inputs and guidance for its financial models and needed to deeply understand and assess key risks facing their potential investment(s) in two rather different US power markets.

Solution

We provided an outlook for energy and capacity revenues, as well as renewable energy credits (RECs), to support initial investment committee decisions. Our team performed long-term nodal basis risk assessments for California and ERCOT, utilizing S&P Global’s Planning Case and custom downside case assumptions developed in collaboration with the client. We explored sensitivities by varying macroeconomic variables, including federal carbon policy and price assumptions, natural gas prices, and detailed transmission variations. 

Additionally, we evaluated the target’s 7X16 hedge structure for its solar PV and energy storage projects in California, assuming near-optimal storage dispatch logic to capture current and future price arbitrage opportunities. Finally, we documented and contextualized the study’s findings in market reports for both the California and ERCOT assets.

Results

S&P Global’s quantitative analysis directly supported the client’s financial model and valuation; the accompanying market report provided the basis for the client to decide to invest in over 500 MW of solar and 200 MW of energy storage in two key US power/renewables markets.

Challenge

An Infrastructure Investor requested a commercial and technical review to identify opportunities for developing new private interconnectors in the Northern part of the Southern African Power Pool (SAPP). CERA Consulting was asked to provide an overview of the electricity market in each of the relevant countries, together with an assessment of the typical commercial framework within SAPP.

Solution

CERA Consulting analyzed demand, capacity, and generation for selected Sub-Saharan Africa countries, providing visibility into import/export opportunities within SAPP under various scenarios.  Our team evaluated commercial SAPP trading opportunities, considering power availability, wheeling costs, and likely import/export routes, identifying potential transmission infrastructure needs.  We also assessed risks associated with new interconnector development, considering SAPP's evolving trade landscape, liquidity constraints, network planning expectations, and regulatory transparency challenges.

Results

CERA Consulting identified economically viable routes for new interconnectors and risks associated with each, ultimately informing our client’s investment strategy and impending decisions.

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.