In order to be able to make decisions, it is essential to have comprehensive information on the investment object and on the relevant economic conditions and constraints. FMC advises investors and financing banks all over the world in identifying and evaluating investment projects. Further, we provide support to regulatory agencies and other public institutions in developing an economic framework that promotes the attainment of national energy policy objectives.
⇨ How will the market for battery-powered energy storage systems develop by 2030?
⇨ Does converting a fossil-fired plant to biomass fuels make sense from an economic perspective?
⇨ What electricity and heat purchase prices can be expected in the future? ...
The long-term perspective – master plans and demand forecasts
Master plans are the foundation for national development plans in the energy, water and waste management sectors. Based on long-term demand forecasts, we develop a sequence of upgrade measures that are optimized with regard to costs and technology. We also identify areas and sectors with a great need for expansion. Investors can use this to derive future investment options.
The current situation – the regulatory framework and the market environment
Regulated markets require standardized rules and procedures for the interaction and also monitoring of market players. FMC supports regulatory agencies, for example in developing performance standards, calculating reasonable tariffs for retail consumers or determining feed-in tariffs for renewable energy.
As part of market studies, we examine the economic attractiveness of individual sectors, products or even services. By analyzing the competitive environment, the economic policy framework, the expected future price development as well as demand, we can derive future orders or revenues for individual market participants and investors.
Micro- and macroeconomic analyses and appraisals
On behalf of investors, we apply financing models to calculate the economic feasibility of their projects. Depending on how mature the project is, financing options are modeled in detail. For projects financed by development banks, we also prepare macroeconomic analyses and assess the impact of projects on the nation in question.
References for typical projects
- Support for the EBRD in identifying and assessing RE projects in the Ukraine
Support for the EBRD in identifying and assessing RE projects in the Ukraine
Fichtner is supporting the EBRD in implementing the Renewable Energy Direct Lending Facility (USELF). Under this facility, the EBRD provides debt financing for RE projects that meet certain technical, financial, environmental and integrity standards. All types of project for the use of renewable energy are eligible for funding, including hydropower, wind power, biomass, biogas and solar energy. Fichtner’s remit was to assist the EBRD in launching, implementing and monitoring the facility, as well as providing training, capacity building and implementation support for project developers.
- Commercialization of the facility and development of a pipeline of projects in the renewable energy sector, including hydropower, wind power, biomass, and solar power
- Screening, evaluation and due diligence of proposed projects, including technical, financial, legal, commercial, and environmental aspects, as well as project approval support
- Legal, commercial, and institutional evaluation of potential borrowers
- Assistance for borrowers and project developers in preparing energy projects, including drafting document templates and contracts to be used by developers
- Identification of training needs and training and capacity building for developers and local Ukrainian financiers
- Monitoring the implementation of RE projects receiving loans from the EBRD
- Support for local authorities on issues related to renewable energy development and renewable energy tariff setting
ClientEuropean Bank for Reconstruction and Development (EBRD)
- Calculation of appropriate electricity tariffs for the regulatory authority in Ghana
Calculation of appropriate electricity tariffs for the regulatory authority in Ghana
Fichtner was commissioned by the Millennium Challenge Corporation to prepare a tariff study for the regulatory authority in Ghana as a basis for determining electricity tariffs and their future development (tariff development plan). The tariff development plan includes various measures that will enable participants in the electricity market in Ghana to fully recover their operating and capital costs via the tariffs in future. In addition, adequate protection of vulnerable groups will be considered in the tariff plan. Following elaboration of the new tariff structure and associated regulations, Fichtner is developing an implementation plan taking into account the various requirements of the process participants to ensure that the program receives the necessary political support.
- Determination of the costs for the generation and transport of the electricity
- Allocation of the costs to the different voltage levels and customer groups
- Development of a tariff model
- Determination of the tariffs for the different customer groups
- Determination of the costs of non-supplied energy
- Determination of the minimum tariff for socially disadvantaged customer groups
- Definition of price adjustment requirements
- Recommendations for future tariff structures and the associated framework
- Preparation of a catalog of measures for implementation
ClientMillennium Development Authority (MiDA)
- Support of the Georgian grid operator in preparation for the further opening of the electricity market.
Support of the Georgian grid operator in preparation for the further opening of the electricity market.
The project will provide targeted training to GSE staff in preparation for the further opening of the electricity market in Georgia. GSE as grid operator is thus being prepared for its future role as a TSO within the “Energy Community” and the “EU Third Energy Package”. Furthermore, GSE is being supported in the development of cross-border electricity exchange agreements with neighboring countries. In this context, a comprehensive training program will be developed and implemented.
- Preparation of GSE for its role as a TSO in a liberalized market
- Support in regional and international cooperations (AGIR, ENTSO-E)
- Conducting of training courses for the employees
- Review of the performance capability of the Cape Verde electricity and water utility
Review of the performance capability of the Cape Verde electricity and water utility
In the last ten years, the electricity sector in Cape Verde has been experiencing financial deficits that have led to poor service quality and required repeated financial support from the government to Electra, the electricity and water utility. The government had therefore decided to implement a comprehensive restructuring plan for the electricity and water sector in order to provide Electra with the necessary resources to improve its operational performance. In order to formalize the mutual commitment, the government and Electra have concluded a performance contract. Fichtner's remit is to review the existing restructuring plan and performance contract, to develop an evaluation methodology, prepare a 5-year work plan, and conduct five annual audits.
- Review of previous plans to restore the economic and operational performance
- Review of the existing performance contract
- Elaboration of a method for reviewing the objectives defined in the performance contract
- Elaboration of the work plan for the next 5 years
- Conducting of 5 annual audits
- Presentation of the results to all stakeholders
- Training of selected Electra personnel
ClientUnidade de Gestao de Projetos Especiais Ministry of Tourism, Industry and Energy Directorate
- Review of the regulation for determining the water tariffs in Georgia
Review of the regulation for determining the water tariffs in Georgia
GWP requested Fichtner for support in the consultation process with the Georgia National Energy and Water Regulatory Commission ("GNERC") on the development of a new tariff methodology for the water sector in Georgia. In this context, Fichtner reviewed the draft methodology proposed by GNERC, as well as all relevant documents previously prepared as part of the consultation process, and prepared a model for calculating new tariffs. The draft methodology was commented on based on the results of the modeling, and a summary of the results was prepared for discussion of the consultation document with GNERC.
- Review of the specifications for calculation of water tariffs
- Preparation of a calculation model and calculation of tariffs
- Support for GWP in the consultation process with the Georgian National Energy and Water Supply Regulatory Commission
- Review of existing power purchase agreements (PPAs) and derivation of recommended actions for future PPAs
Review of existing power purchase agreements (PPAs) and derivation of recommended actions for future PPAs
Fichtner subjected KenGen's Power Purchase Agreements (PPAs) to a comprehensive analysis and evaluation. The entire process was considered, including PPA development, PPA negotiations and management of active PPAs. Documents and processes were compared with international standards and best practice. From this, recommendations for KenGen were derived, especially with regard to the optimum balance between risks and cost-effective procurement prices. The PPAs covered the purchase of electricity from geothermal, wind, solar and hydropower plants.
- Definition of criteria for the evaluation of PPAs
- Review and evaluation of current PPAs
- Development of strategies for making the power purchaser (KPLC), as well as the regulatory authority (ERC), accountable in minimizing risks from the PPAs
- Determination of factors influencing the agreed purchase price in the PPAs
- Derivation of suggestions for improvement in future PPA processes and negotiations
- Identification of improvement potential and training needs of KenGen's PPA team
- Development of a model PPA for future tenders