Renewable Power & the Energy Mix (the “MiniMBA”)


A Comprehensive Guide to the Renewable Power Business

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Can you 'see the wood for the trees'?

Do you understand the context of your particular company or market niche within the wider energy market context: the competition, the key trends and the disruptive changes ahead?

This highly interactive course provides a comprehensive and unique “big picture” understanding of the competitive dynamics, market and policy environments, project economics, risk factors and integration challenges associated with the large-scale transition to renewable power. It highlights how different renewable power solutions are positioned within current and future electricity generation systems, and joins the dots of the multiple , connected influences which determine opportunity and risk.

It has been presented across the globe for more than five years by Dr John Massey, to hundreds of senior energy business people including investors, policymakers and project developers.

It is regularly edited and re-developed, to ensure its continued timeliness and relevance.

LATEST UPDATES:  * All-new ‘Electricity Mix Explorer’ model * Enhanced ‘Power Project Economics Explorer’ model *

Summary & key features

The course provides clear, independent and business-focused guidance on market opportunity and risk to those deploying, investing in or regulating renewable power projects.

It is presented in language suited to non-engineering commercial executives and investors, so no prior technical knowledge is assumed or required.

Presented throughout in an interactive and market-focused way, the course connects the multiple market environment factors that need to align in order that renewable power can scale up and integrate: from the business, system and policy environment to the project development processes, finances, risks and returns.

Over five days, this course leads attendees through the key aspects of the renewable power business: from variables impacting the success (or failure) of individual projects, to the wider electricity market context and trends, to the integration and wider impacts of large amounts of renewable energy in transitioned energy markets. It highlights a market analysis approach that recognises that sustainable growth of the renewable power business requires balancing multiple, interconnected (and potentially conflicting) requirements including market fit, reliable service, investor returns and public/political acceptance.

The agenda will combine presented materials, plenty of opportunity for Q&A, interactive discussions, quantitative models and group exercises designed to illustrate and put into practice the main learning points.

Key learning points are practised and quantified by making use of two Excel-based models, exploring electricity mix outcomes and power project economics. 

Key Training Outcomes include:

  • Understanding of the key market and business environment requirements for the sustained growth of renewable power, including quatitative analysis of different electricity mix scenarios
  • Quantitative understanding of investment requirements and economic risks and returns for renewable power projects
  • A solid review of current and emerging solutions to large-scale renewable power integration
  • The development of an integrated approach to combining financial, technological, political and socioeconomic factors in renewable power market analysis
  • Being better equipped to converse with project partners, suppliers or investors; “speaking the language” of power markets
  • Knowing what to look for when evaluating long-term, sustainable renewable power market opportunities
  • Being better able to identify key investment, project development and policy risks
  • Knowing how to identify, analyse and critique competing market solutions

The course combines presented materials with plenty of opportunity for Q&A, interactive discussions, and the use of two quantitative models within a market transition exercise. Real current market examples and data are utilised to illustrate key learning points.

Who should attend?

This course is ideal for you if:

  1. You are working within the energy sector in a commercial, business development or policy role. You need a clearly-explained, multi-faceted understanding of how, where and why renewable power is disrupting existing markets, so that you can understand the new market realities, opportunities and risks facing your business.
  1. You are from the investment, legal or other commercial services community. Renewable power presents a new or growing customer base for you, so you want to gain an independent perspective on the business environment within which these investments and customers operate.

Course Takeaways:

  • ‘Electricity Mix Explorer’ model (Excel)
  • ‘Power Project Economics Explorer’ model (Excel)
  • Presentation slides (pdf included – hard copy at cost, on request)
  • Reference/Reading list
  • Certificate of attendance (pdf included – hard copy at cost, on request)
Agenda details

A full 5-day agenda is outlined below; A 4-day version is also available, which removes the group tasks.

DAY 1: The Business Case

Renewable Power Business Case Variables

  • The Economics of a renewable power project: the key variables & metrics.
  • Introducing a simple project finance cash analysis model (provided).
  • Present vs. future costs: contrasting different renewable (and conventional) examples.
  • Key aspects of investment risk, including internal and external risk factors.

Attracting Investment (& the Costs of Finance)

  • Sources of finance: who is providing the investment and what do they expect? (understanding their risk/return perspective)
  • Analysing the impact of financing structure and cost on project returns and energy prices.
  • Comparing the sensitivity of project economics to financing costs vs. technology costs (and other factors).
  • How can both project developers and policymakers help lower investment risks (and hence financing costs)?

Resource Risk in Renewable Energy

  • Comparing and contrasting resource variability and uncertainty issues in renewable power: solar, wind, geothermal, hydro, biomass.
  • Examples of year-by-year and seasonal natural resource variability.
  • Defining “P” metrics (P50, P90 etc.) and explaining their impact on the financial model (and investor returns).
  • Specific and future resource risk issues around different biomass sources, including wastes.

Costs & Prices

  • Levelised Cost of Energy (LCOE): understanding what it is – and what it isn’t (and why it can be misused).
  • Marginal cost, Merit Order and wholesale power markets: new challenges in a world of “fuel-free” renewables.
  • Examples of extreme pricing: price spikes and negative prices (including their causes and mitigation).
  • What end-users actually pay: wholesale prices, system costs, policy costs and retail prices

 

DAY 2: Building Projects

Project Phases & Key Contracts

  • Development, Construction & Operations: typical timelines, processes and risks for different renewables.
  • Requirements for bankability and financial close: key licenses, registrations and contracts.
  • Power Purchase Agreements (PPA): example off-takers, requirements and compliance risks.
  • Environmental Impact Assessments: typical requirements and potential pitfalls.
  • EPC, O&M and other key contracts

Regulatory Impacts & Policy Risks

  • The role of the regulatory environment in project economics and the relative competitiveness of different power projects.
  • Key policy mechanisms to influence: energy prices (tariffs), additional revenue streams (e.g. energy or capacity credits), project costs (e.g. tax credits and costs), financing risk.
  • The importance of policy mechanisms to reduce revenue certainty and market availability risks (e.g. curtailment)
  • Trends in renewable energy policy, including the move to auction-based markets and “subsidy-free” renewable power.

GROUP TASK: power project economics compared

  • Using a provided cash-flow model to quantify the economics and business cases for power project alternatives in a market.
  • Evaluating the impacts of variability in resource qualities, current and future costs, financing availability and more.
  • Comparing modelled and market prices to identify requirements for policy support or subsidy: is renewable power competitive?

GROUP TASK: policy & competitive bidding

  • Defining short, medium and long-term policy requirements, targets and mechanisms.
  • Evaluating the competitive positioning of different project types in a market, now and in future.
  • Comparing decarbonisation solutions, from an economic and financial perspective.

 

DAY 3: Market Context & Competition

The Power Generation Supply Matrix

  • Power options compared using various factors, for example emissions, sustainability, operation, economics and more.
  • The big picture: history and trends in world primary energy use and consumption, including key demand drivers.
  • Changes in the contribution of renewables to the global energy mix (both electricity and total energy).
  • Global vs. local: contrasting different country examples (and the lessons learned).

Power supply flexibility and security

  • Exploring “variability”: demand and supply side comparisons
  • Keeping the lights on: peak demand, supply and capacity margin
  • Oversupply, curtailment and negative prices: causes and mitigations
  • Evaluating system flexibility and security: why the mix matters to policymakers and investors alike.

Technology trends i.: Solar & Wind

What’s new in power generation, both now and emerging (to enable continued growth)

  • Solar PV, e.g.: efficiency, energy maximisation, location & installation
  • Solar CSP, e.g.: cost-reduction, thermal storage
  • Wind power, e.g.: energy maximisation, reliability & materials
  • Offshore wind (and other offshore power), e.g.: installation, floating, offshore grid

Technology trends ii.: Hydro, Biomass & Geothermal

What’s new in power generation, both now and emerging (to enable continued growth)

  • Hydropower: e.g. locations, scale
  • Biomass: e.g. sustainability and feedstock, efficiency, hybridisation
  • Geothermal: e.g. cost reduction, drilling technology, field management

 

DAY 4: Large Scale Integration

Renewables & the Grid

  • The operation and key metrics of the grid system (transmission & distribution, T&D).
  • Challenges in maintaining the power supply/demand balance at high renewable power penetrations: macro and local impacts.
  • Issues for scalability and growth, including barriers around legacy infrastructure, existing business models, new infrastructure deployment.
  • Short timescale power matching requirements for grid reliability (ancillary services), including example

Electricity Storage and Alternatives

  • Understanding where storage sits within the supply and demand mix.
  • The pros and cons of available storage solutions in future growth, including pumped hydro, battery, thermal, chemical and more.
  • Matching storage capabilities to power system stability and energy-shifting applications: what the market tells us and how it is changing.
  • Alternatives to storage, including grid interconnectivity and demand management / demand response (DSR) mechanisms.
  • The economics and business cases for electricity storage (examples).

GROUP TASK: power mix pathways

  • Analysing market demand and supply using a simple energy mix model (provided).
  • Compare a current power generation mix with future market requirements (including demand growth, carbon reduction, domestic supply security).
  • Exploring the impacts of future growth projections and/or demand reduction.
  • Assessing system reliability risks (under- and over-supply).

GROUP TASK: power shift outcomes

  • Combining potential power mix pathways with previously quantified economic and financial considerations.
  • How do future power mix options compare in terms of reliability vs. cost?
  • Total investment costs vs. ongoing costs of energy.

 

DAY 5: Energy Transitions

Electrification of Transport & Heat

  • Why electrification of transport and heat are key facets of all 100% renewable energy scenarios.
  • Assessing the impact on electricity demand (and hence supply requirements), including a review of Electric Vehicle (EV) growth.
  • Electric vehicles and the grid: integrating and managing EVs in large numbers.
  • Electric vehicles and renewable power: can you charge your EV from your domestic PV? (and other questions)
  • Options for the efficient electrification of heat, including the integration of electric heating into smart demand management strategies.

Socioeconomic Considerations

  • Social and economic factors in making the transition happen, including affordability, skills and economic multipliers.
  • Addressing public concerns and common objections to the energy transition.
  • Identifying key social and economic drivers to ensure sustainable public and political support.
  • DISCUSSION: the policymaker’s dilemma and the challenges of balancing different aspects of the market environment.

GROUP TASK: Transition Planning & Risks

  • The possible impacts of electrification on previously modelled power mix scenarios.
  • Applying real-world constraints and concerns to previously proposed transition pathways: public and political acceptance
  • Conclusion: proposing a realistic and sustainable market evolution which integrates consideration of electricity delivery, financial performance and socioeconomic outcomes.
  • Presentation of integrated group task findings.

GROUP TASK: Transition Pathways Compared

  • DISCUSSION & EVALUATION of presented results.
  • Closing comments and summary of key course takeaways.
Screenshot examples

Example ‘Electricity Mix Explorer’ Screenshots:

Example ‘Power Project Economics Explorer’ Screenshots:

 

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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