The New Economics of Renewable Power Projects


The Opportunities to Make Money from Renewable Power Projects are Changing: Learn How

Understand and analyse the new business case and financial considerations for ‘variable’ renewable power projects, as prices and subsidies shrink, but the value of flexibility grows and the revenue opportunities diversify.

Policy mechanisms such as generous, above-market-rate feed-in-tariffs have succeeded in driving scale for solar and wind power in particular. They have in turn created greater market shares for these sources, and – helped by competitive auctions – brought energy costs to or even below those of ‘conventional’ competitors. While undoubtedly a good news story for advocates of clean power, it also means that the economic and business playing field for new and future projects is very different. Policymakers are focusing less on subsidy and more on the need for system and market flexibility, creating new opportunities for value-creation in the renewable power business case.

This course provides attendees with a clear view of the evolving power system and the changing role of renewable power within it, seen from an economic, business opportunity and financial risk-and-return perspective. Together we will analyse the key changes taking place to create clean-yet-flexible power systems, focusing on how they create new revenue opportunities and market entry points, how these vary by market and how they are changing project development, design, planning and financing considerations.

Summary & key features

Key Training Outcomes:

  • Understand how the market environment for ‘variable’ renewable power is changing, what new requirements this will impose and which new opportunities arise as a result.
  • Identify the alternative approaches to developing new business and revenue-generation plans, including current examples and future needs.
  • Explore the opportunities for ‘revenue stacking’ from a renewable power project, including limits and practical constraints.
  • Discuss how key technology trends such as storage, virtual power plants and electrification of transport can be tapped to create value for renewable power generators.
  • Learn how operational challenges, regulation and energy mix competition contribute to different requirements and growth potential in different markets.

Who should attend?

This course is ideal for you if:

  1. You are working within the renewable power sector in a business development, project planning or portfolio strategy role. You need to understand how your competitive environment is changing – and how you can adapt and thrive.
  2. You are an investor in renewable power projects or associated technologies. You need to know which new variables and trends are impacting investments in the sector; not just new risks, but new opportunities too.

Course Takeaways:

  • Various illustrative, quantitative models (Excel)
  • Presentation slides (pdf included – hard copy at cost, on request)
  • Market Examples list
  • Further Reference/Reading list
  • Certificate of attendance (pdf included – hard copy at cost, on request)
Agenda details

(NB. Rest assured, real market examples are used throughout this course to illustrate the various agenda items and to highlight that the content is rooted in the real world, not just theory. Specifics aren’t included below for one simple reason: they are continuously updated, changing as required to keep the content up-to-the-minute relevant and reflective of the latest innovations and trends).

DAY 1:

The changing competitive environment for solar and wind power

  • Technology, auctions and the cost of energy
  • Policy and subsidy trends (distinguishing ‘subsidy’ from ‘support’)
  • Power generation competition and the energy mix
  • Drivers for growth, including both climate and non-climate influences

Selling electricity: the growing options

  • Auctions and tenders
  • Direct sales: corporate buyers and PPAs
  • Electricity markets
  • Pricing, risk and the business case (including the revival of carbon costs)

Understanding wholesale electricity prices

  • Levelised costs, marginal costs, long-term costs and the merit order
  • Curtailment, negative prices and the myth of “free electricity”
  • Peak prices and price volatility
  • The importance of understanding cost and price dynamics, even in markets without traded electricity markets

The economics of electricity for end-users

  • Wholesale vs retail electricity: why they differ and why it matters (to everyone)
  • The full costs (and value) of electricity for consumers: trends and new approaches
  • The economics of distributed vs centralised power generation
  • Selling to large (commercial & industrial) customers: who, why and what?

DAY 2:

The changing power system and new value-chain opportunities

  • What are the key challenges that solar and wind introduce into the power system (and how can they themselves contribute to solutions)?
  • Beyond rooftop solar: the biggest long-term impacts of distributed generation
  • Why aggregation and virtual power plants (VPPs) are so important
  • From consumers to prosumers: creating value from engaged customers

Understanding different timescales in planning and managing a power system

  • Electricity scheduling (day-ahead/spot)
  • Balancing markets (real-time): who pays and who makes money?
  • Coping with unexpected events (the value of reserves)
  • Long-term demand and system security (making money from firm capacity)

Understanding weather risk for solar and wind

  • A business person’s guide to natural resource variability
  • The practical impacts of weather patterns on project and portfolio finances
  • Mitigating resource risk
  • Who does (and should) bear the financial cost of weather risk within the power system? (Plus regulatory trends)

Dispatchable renewable power projects (the value of storage)

  • Why and where dispatchability is becoming an essential requirement for solar and wind, not just an option
  • The economics of integrated storage: balancing cost, time and revenue
  • Project planning for storage, either to integrate now or in the future
  • Current and emerging storage options: a competitive review

DAY 3:

Making money from grid services

  • A business person’s guide to ancillary services and grid operations
  • The impact of solar and wind growth on grid service requirements
  • Adapting solar and wind to provide (and benefit from) ancillary services: technical and regulatory approaches
  • Understanding market size, competition and saturation risk in ancillary services markets: why not everyone will profit

Financing flexible renewable power projects

  • Reviewing the cash flow and risk/return variables behind a successful renewable power project business case
  • The sources and costs of finance (and their impact on energy price competitiveness)
  • New technology, project flexibility… and bankability (how to achieve it)
  • Quantifying the issues discussed (costs, revenues, risks and returns)

Integrated renewable power projects, including microgrids

  • The pros and cons of combining solar and wind (and other assets)
  • Market drivers for microgrids
  • Land use and planning considerations
  • Not just for off-grid: the growth of urban microgrids and local electricity trading

The impact of electrification and ‘smart’ power

  • How much will electric vehicles boost electricity sales (and for who)?
  • The opportunities for, and barriers to, “V2G” (vehicle-to-grid)
  • What will be the biggest impact of smart meters?
  • The role of time-of-use tariff innovation in integrating and electrifying both transport and heat within the ‘smart’ home

Summary: analysing the competitive landscape

  • Assessing the future prospects for different revenue streams: electricity sales, capacity value and grid services
  • Competition for flexibility revenues (e.g. DSR, interconnection and conventional distributed power)
  • The practicalities and challenges of “revenue stacking”
  • How will policy evolve?
Availability & inquiries

Training for your company:

  • The course can be delivered at your company premises or preferred venue, for small groups
  • Pricing is on a transparent day-rate basis, according to location (inquire below)
  • The agenda above is the recommended “off-the-shelf” agenda, but limited customisation is possible (inquire below)

Training for individuals:

  • Grey Cells Energy does not currently organise open/public courses, but does work as an “associate trainer”, via larger 3rd-party event organisers. Contact info@greycellsenergy.com or inquire below for the latest calendar dates.
  • If you are interested in remote learning – covering some or all of the topics on a one-to-one basis via the Internet – inquire below.
Updates

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