Investment Appraisal

Investing in energy projects is a significant decision for any business at any time, yet it is amazing how the process for evaluating investment opportunities continues to leave consumers passing up good energy investment projects, or worse, investing in sub-optimal projects.

The recent focus on carbon reduction has led to a number of organisations issuing arbitrary targets for reductions, often in excess of 20% within five years. As noble as these objectives may be, they often have no relation to the pipeline of projects available and the capital allowance hurdle rates in force.

M&C provides a comprehensive process for valuing available projects and monitoring those in progress as conditions change.  This ensures that your organisation focuses its resources and capital on the best projects available, that your project pipeline is consistent with corporate objectives and, most importantly, that any project meets your publicly quoted targets.

Project Pipeline Management

Many consumers have arbitrary targets for reducing energy consumption or carbon emissions.  But they often don’t know if they have enough potential projects to meet those targets, or if those projects meet investment criteria.

M&C manages and maintains a matrix of all potential opportunities at a site level, which for some consumers can be hundreds or thousands of projects.  We build valuation models of each project, so we can present a pipeline of projects by IRR, allowing you to see which are viable based on cost of capital, which return greater than a bond and which require subsidies to complete.

This list is re-valued each month, so you can focus your development resources on those projects offering the best return on investment, and stop focusing on those that do not.

Project Evaluation

Many clients consider investing capital in major energy projects such as Wind Turbines, EFW, Biomass, Solar or CHP.  These projects can involve investing your own capital or buying a long term PPA from a developer that provides the capital for the project.

M&C supports you by valuing the project from your perspective as a capital investor, your perspective as a buyer of a PPA and their perspective as developers.  From this analysis, M&C supports the negotiation of the project transferring value from the Project Developer to you.  Finally, M&C supports the negotiation of the contractual documentation that underpins the financial close of the project.

Investment Opportunity Management

Once our project pipeline management service has helped you approve a project, you must go through a number of due diligence processes, such as proving technology, identifying contractors and creating a fuel supply chain.  All of these processes demand market experience and spare resources that many consumers do not have.

M&C has the ability, the experience and the resources to support these processes until contractors are in place, and can even manage the project through to completion.

Wholesale Services

M&C Energy Pty Ltd tracks and studies the wholesale market activity for a range of modelling and analytical services.

Our hands-on experience and sound knowledge of the market means that we can hit the ground running when undertaking projects, reducing delivery time and cost whilst also ensuring that our solutions are practical and robust.

The types of projects we undertake include:

  • Spot price forecasting
  • Forward price forecasting
  • LGC forecasting
  • Portfolio optimisation
  • Gas optimisation
  • Revenue forecasting for generation projects
  • Cost forecasting for large consumers
  • Market analysis
  • Derivative valuation
  • Expert reports
  • Feasibility studies
  • License applications

M&C Energy Pty Ltd has provided these serves to large energy consumers for the purpose of:

  1. Assessing revenue for on-site and co-generation development projects including technologies such as gas plants and wind turbines
  2. Determining potential cost distribution associated with electricity procurement and electricity cost hedging strategies
  3. Providing hedging strategy advice for large energy consumers who manage their own electricity procurement within or independent of an electricity retail agreement
  4. Analysis and independent reports reviewing proposed regulatory or legislative changes for internal or public consultation use
  5. Daily/Weekly calculation and reporting of Cash Flow at Risk for energy consumers with partial or complete spot price exposure for their electricity purchases

For many of the analytical projects we employ our simulation modelling techniques that recognise the future is uncertain; including such factors as weather, demand growth, economic growth, generator strategies, generation plant performance, generation technologies and costs, wind speeds and regulation.