ECA SERVICES / MARKETS & COMMERCIAL
Our energy markets are going through a period of substantial transition; we see greater interconnection and harmonisation between national markets alongside a growth in distributed generation and localised initiatives. This poses challenges to market operators and policy makers as well as opportunities to market participants. ECA supports public sector clients in the design of energy markets capable of standing up to this new landscape by – amongst others – defining trading rules, balancing mechanisms, and cross border access right mechanisms.
Leveraging our expertise in market design, we advise infrastructure investors and market participants on project proposals in power generation, electricity storage, and energy and water networks.
Our consultants – with the support of in-house and proprietary models (PLEXOS) – cover a wide range of investment assessment services including asset valuations, market and regulatory risk analyses, and economic impact assessment. As project development matures, we advise on business models and contractual arrangements such as power purchase agreements and gas sales and purchase agreements.
Our focus areas include:
- Modelling and simulating electricity and gas markets
- Market and regulatory due diligence for infrastructure investments
- Designing energy markets
- Power and gas sector reform assessments
- Advising on commercial contracts in the utility sector
SELECTED PROJECTS INCLUDE >
SELECTED PROJECTS INCLUDE >
European electricity forward markets
This involved the development of methodologies to evaluate market and product efficiency. We reviewed theoretical and practical literature and assessed volumetric data and price histories. We also developed a model of how the forward capacity allocation network code provisions would be implemented, and assessed and proposed methods for measuring and determining its effectiveness in promoting competition.
UK proof of origins
Information was required on how the rules for trading Levy Exemption Certificates (LECs) awarded to generation from outside the UK may change with current market developments. ECA analysed the current regulations on evidencing delivery in UK, assessed principles for potential revised rules and how they might work, set out a checklist of procedures required, provided example evidence regimes and advised on principal risks.
Intraday market rules, Ukraine
Ukraine, as a member of the Energy Community, is reforming its electricity sector to implement the EU Target Model. One element is implementation of rules for an intraday market to operate continuously from the closure of the day ahead market until the balancing mechanism takes over. This project is to develop detailed market rules compliant with EU regulations for operation of an intraday market price-coupled with equivalent markets in neighbouring EU countries.
CCGT revenue projections, Israel
ECA supported a project developer in assessing the commercial feasibility of a 500 MW gas fired power plant. This was done by applying our inhouse electricity dispatch model Wairoa. We projected electricity prices and calculated capacity factors for CCGT and OCGT units.
Electricity forward markets and liquidity, Ireland
Project to support the national regulatory authorities in Ireland (CER and NIAUR) on implementation of financial transmission rights to replace physical rights on interconnectors with GB in the new design of the single electricity market for Ireland (I-SEM) and to consider measures to promote liquidity in financial forward products within the market.
Wholesale electricity market advisor, Vietnam
ECA was appointed to advise the Electricity Regulatory Authority of Vietnam on the introduction of the country’s competitive wholesale electricity market, to start in pilot form in late-2015 and in full from in 2019. Tasks included overseeing and coordinating the work of the various workstreams of the wholesale market and supporting ERAV in determining its strategy for accompanying sector reforms.
Electricity load forecast, Oman
Development of a model for forecasting electricity demand disaggregated to the level of primary substation. The model is to be used by the planning department in Mazoon Electricity Company’s HQ.
Provision of balancing markets and ancillary services, Bosnia & Herzegovina (BiH)
The objective of this project was the analysis of gaps in the processes for provision of ancillary services in BiH and the development of a set of arrangements for their provision.
Gas sector restructuring, Pakistan
Pakistan is in the process of introducing LNG and providing greater incentives for increased domestic gas production. ECA led a team assessing the potential impacts on customers of the entry of higher-priced new gas supplies and how these can be best managed while still ensuring the creditworthiness of counterparties for new gas supply agreements. The conclusions of the project were presented at senior levels of Government and have become the basis for future Government policy.
Market study for solar power plant, Romania
ECA assessed the electricity and Green Certificate markets in Romania in light of an investment in a solar plant in Romania. This included an assessment of the regulatory environment for generation investment with a particular focus on renewable energy sources (RES) and solar specifically.
Electricity market rules, Kosovo
ECA advised the transmission company (KOSTT) on key aspects of market design and developed these as detailed Market Rules compliant with the design and operation of the market as well as modelling prices for balancing market bids and offers.
Dispatch audit for Sri Lanka
ECA worked with the Public Utilities Commission of Sri Lanka on an assessment of the efficiency of electricity generation operations. As part of this, the need for regular auditing of dispatching arrangements was identified. ECA is now assisting PUCSL in developing guidelines for these audits and supporting an initial audit.
Small scale LNG market study, Namibia
ECA supported the IFC in identifying possible usages of small scale LNG (ssLNG) in Namibia and the wider region. The assignment included an assessment of potential volumes, prices and locations of small scale LNG uptake. Together with a cost analysis provided by technical expert we were able to quantify the economically feasible volumes and offtakers of ssLNG in Namibia.
Power purchase agreements for wind farms in Tunisia
An EBRD project advising on the allocation of risks under the new Tunisian Renewable Energy Law with respect to Feed-in Tariffs. ECA advised on the legal, technical and bankability implications of the Law, the FiT Regulation and the model Power Purchase Agreement as well as drawing up a model PPA for independent investors (IPPs) as well as other contracts the new generator must sign.
Electricity distribution appraisal, Vietnam
In support of a proposed loan to funded new electricity distribution investments, ECA conducted financial and economic due diligence on the individual investment projects and on the financial capacity of the implementing distribution utilities. The investments reviewed were wide-ranging and included the introduction of new smart grid elements for which innovative appraisal approaches were required.
IPP due diligence, Ghana
Commercial due diligence study for in a proposed gas-fired IPP in Ghana. ECA prepared projections of the operation and costs of the power plants supplying the electricity market and assessed the revenues required by the transmission/distribution off-taker to satisfy future demand for the next 20 years. This included the impact on electricity tariffs and an affordability analysis to understand whether the resulting tariffs would be affordable for lower income electricity consumers.
Development of model power purchase agreements, Serbia and Montenegro
The assignment involved review of existing draft PPAs, revision and updating of those PPAs to ensure they are bankable, together with related securitisation agreements. While the PPAs are specifically drafted for wind power projects, other renewable energy projects would also require a PPA which could be an amended and reduced version of the wind power PPA.
Gas transit agreement, Georgia
ECA advised the Georgian government in relation to the negotiation of a gas transit agreement. The pipeline connects a gas field off the coast of Azerbaijan with the Turkish gas transmission system, passing through Azerbaijan and Georgia. ECA was actively involved in the negotiation process, advising on the economic and financial aspects of the transit fee and the value of possible contract conditions.