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Power Market Studies

IEC specialises in producing detailed and comprehensive Power Market Studies, especially for countries located in the Asia/Pacific region.

COUNTRIES

IEC maintains comprehensive databases and has detailed simulation models for most Asia/Pacific grids including:

Japan

 

South Korea

 

Philippines

 

Indonesia

 

Singapore

 

Vietnam

 

Australia

 

Taiwan

 

New Zealand

 

China

Although our experience is primarily in countries within Asia/Pacific, IEC can also undertake market studies for other countries outside the region. We specialise in understanding deregulated Pool-type markets and hydro-dominated systems.

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USERS


Our detailed Power Market Studies are useful for:

Greenfield investors who may be seeking to understand a new market or identify opportunities

 

Asset buyers who need to assess the competitive position (ie. risk) and future revenues/costs (ie. valuation) of acquisition targets

 

Asset owners considering expanding their existing business or wishing to understand the impact of deregulation, future competition and/or carbon taxes

 

Fuel suppliers (LNG, gas, thermal coal) who wish to understand the market potential for their product (eg. volume, timing, pricing, customers, etc).

 

Large consumers (eg. Industrial users, distribution companies, retailers) who are seeking to optimise (minimise) their electricity costs

 

Traders who wish to identify medium- to long-term trends in the market

 

Investment banks who are advising their clients or need to assess the risk of lending to a project

 

Equity analysts who require a deeper understanding of specific markets and issues

 

Equipment suppliers and EPC companies who want to understand the markets trends for their products and services

 

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CONTENT


Our market studies (in presentation and/or report format) are individually customised for each Client but typically cover the following topics:

 

1.

COUNTRY OVERVIEW

Size, population, politics

 

Economy

 

Risks & attractions

 

2.

MARKET OVERVIEW

 

Generation

   

Capacity mix (MW %coal vs. gas vs nuclear Vs hydro Vs other)

   

Generation distribution (MWh% coal vs. gas Vs nuclear Vs hydro Vs other)

   

Major plant location map

   

Ownership structure

   

Load & dispatch curve(s)

 

Transmission & Distribution

   

T&D network description

   

Transmission map

   

Ownership structure

   

T&D costs

 

Retail

   

Ownership structure

   

Market share

   

Customer breakdown

   

Retail tariff structure

 

Regulatory

   

Regulatory framework

   

Industry structure

   

Deregulation & privatisation

   

IPP market

   

Pool market description

 

3.

LOAD

Historical growth

Load factor

Consumer breakdown

Peak load forecast

Seasonal load distribution

Daily/weekly load curve

 

4.

GENERATION MARKET

 

Detailed plant description

 

Role of hydro

 

Marginal cost curve(s)

 

Historical expansion plan

 

Reserve margin requirements

 

Spinning reserve

 

Future expansion plan (Official & alternatives)

 

New capacity requirements (size, type, timing, etc)

 

5.

NEW ENTRANT ANALYSIS

 

New Entrant options (size, type, fuel)

 

New Entrant assumptions

 

New Entrant financial analysis

 

6.

FUEL SUPPLY

 

Historical fuel use

 

Fuel costs

 

Fossil fuel (oil, gas & coal) reserves & production

 

Fuel demand forecasts

 

Future fuel supply options

 

7.

KYOTO PROTOCOL

 

Current status (emissions, regulations, etc)

 

Future CO2 emissions

 

Impact of carbon tax

 

Calculation of carbon credits

 

8.

MODELLING

 

Analysis

   

Simulation model description

   

Base case assumptions

   

Sensitivity testing (load growth, fuel prices, expansion plan, hydrology, carbon taxes, etc)

   

Base Case results (whole system plus existing & future plants)

 

Scenario Analysis (20+ year projections for each scenario)

   

System reserve margin

   

System marginal price

   

Base load Pool price

   

Plant capacity factor

   

Plant revenues & costs

   

Comparison of PPA vs. merchant capacity factor, revenues & EBITDA

 

9.

PROJECT/COMPANY EVALUATION

 

Project/Company Overview (history, location map, financials, technical summary)

 

Generation profile (position in merit order, seasonal/annual output)

 

Regulatory status (PPAs, Pool exposure, hedging, etc)

 

Other business (fuel supply, T&D, retail, non-power)

 

Fuel supply (current & future)

 

Revenue/EBITDA projections (Scenario Analysis)

 

Risk analysis

 

Future growth prospects

 

10.

SUMMARY & RECOMMENDATIONS

 

Summary of key results & conclusions

 

Opportunity description

 

Recommendations for next steps

 

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SCENARIO ANALYSIS

An integral component of our market studies is a comprehensive Scenario Analysis which identifies the key variables or sensitivities in the particular market and quantifies their respective impact on the Client’s relevant metric.

Following questions are examples of real questions asked by IEC’s Clients:

i.

How will future oil prices affect the operation of a particular LNG-fired plant in Korea?

 

ii.

How will future load growth affect the timing of new capacity requirements in The Philippines?

 

iii.

How will unusually wet or dry years affect annual gas demand in (hydro-dominated) New Zealand?

 

iv.

What level of carbon tax would cause LNG-fired plants to run ahead of coal-fired plants in Japan?

 

v.

How will the fixed/variable cost structure of LNG affect the load factor of a new LNG terminal in Taiwan?

 

For each market, we rank the key factors according to their relative and absolute impact on specific projects and suggest possible mitigation strategies against downside risks.

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TIMING

Depending on the Client’s required level of detail, a typical market study may take between 4-8 weeks to complete, excluding any travelling time. The preparation of a market study includes the following steps:

Scoping. Meet with Client to discuss goal, scope, deliverables, schedule, budget, etc

 

Data acquisition. Update existing database or collect data for new market.

 

Model construction. Customise simulation model to meet Client’s specific needs

 

Model calibration. Calibrate simulation model to fit with historical data

 

Scenario analysis. Run model for multiple scenarios

 

Interpretation. Collate and interpret results to identify trends, opportunities and risks

 

Presentation & Discussion. Interactive session with Client

 

Ongoing Support. Establish facility to enable to Client request additional analysis

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COST

The cost of each market study depends on the level of analysis required, although the initial scoping phase (generally a visit to the Client’s office and 1-2 days discussion) is waived from any fee.

IEC always recommends and encourages the Client to participate in the analytical process, wherever possible, to provide feedback and ensure that the deliverables are in line with expectations.

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International Energy Consultants

E-mail International Energy Consultants jmorris@energyconsultants.com.au
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