Properly assessing mid-merit and peaking power plant operations

For a Fortune 500 client PA Consulting Group was retained to perform energy market consulting services as part of its budgeting process for 2007-2009. The team developed plant-by-plant financial projections for the annual budget through use of its proprietary stochastic dispatch models to capture generation associated with cogeneration and other contractual and operational parameters. A bottom-up modelling approach was utilised, which required close interaction with the company to derive and incorporate plant characteristics, contract terms and dispatch-related variables into the asset-by-asset forecasts. PA and the client jointly reviewed the forecasts through a rigorous review process involving multiple iterations to accurately forecast the plants financial projections. In addition, PA reviewed, developed, analyzed, and incorporated financial projections for the trading organisation, financing waterfalls, debt service, and other non-plant revenue and expense streams. 

PA was retained by a battery storage developer to provide strategic market guidance and valuation support. The project team summarised the market rules as they relate to battery storage technology, projected the energy and ancillary service market prices of several markets, and used its proprietary stochastic dispatch optimisation model to project the margins and operations of battery storage technology of given specifications, and assisted executive management in development and execution of a go-to market strategy for the technology.

Suez Energy North America engaged PA to prepare asset due diligence and plant projections. In support of Suez’s bid to acquire the Astoria plant, the team used a proprietary stochastic dispatch model to provide a gross margin forecast and incorporate futures market prices. Additionally, PA provided a NYPP Zone J market price forecast for the Astoria asset and possible expansion, including installed capacity prices (ICAP).