Our Expertise:

Energy Security Analysis, Inc. (ESAI) is an energy research and development firm, which currently works with a large number of: power marketers; financial institutions; generators; regulators; developers; and end-users. The ESAI Power and Gas practice is well positioned to assist clients with valuable and practical insights into these markets.

Our understanding of the Northeast power markets, particularly with regard to the interplay between energy, capacity, transmission and gas issues is second to none. Changes in transmission topology, capacity market design, energy market heat rates and regulatory issues are all inextricably linked to one another. ESAI Power’s analysis, market expertise and guidance have been building blocks for our clients’ development of merchant transmission lines, conventional generation and renewable energy projects. We have conducted numerous asset valuations, assisting clients on both buy and sell-side transactions. Our analysis is used in real-time development and we know full well how the capacity, energy, and transmission market components interact in both the near and long term markets.

Our economic assumptions, forecasts and revenue projections formed the basis of the financial support for the Neptune RTS DC transmission line project, now in operation and transferring power from PJM to Long Island. Currently we are providing the same "market sensitive" analysis to other asset buyers and project developers. ESAI Power’s analytics and market insights can be applied to wide array of power applications including assessments of transmission congestion, renewable energy credit markets, CO2 and emissions issues, and demand response and energy efficiency.

The analysis and insight produced is used by an extensive client base, which relies on us for the precise application of our analytical results not only in large project development, but also in ongoing operations. ESAI Power’s intimate knowledge of the grid and our capacity to provide real-world results with practical insights, distinguishes us as a premiere market consultant able to apply meaningful market analysis to "real-time" business decisions.

Selected Projects:

Following is a short list of select projects conducted by ESAI Power in the last few years. The examples are intended to provide insight into the capabilities of our practice and some ways in which they can be applied.

2009

MIDWEST ISO & IOWA WIND QUEUE ASSESSMENT – IOWA

Completed

Client: Major Wind Developer

Summary: ESAI analyzed the current MISO interconnection queue for generation projects in and around central Iowa, encompassing some 7,000 MW. Developer was interested in ESAI’s view on the probabilities for completion of many of the projects, specifically:

  • A review of the proposed types, locations and production outputs.
  • A review of the major bulk transmission facilities in and around the development area.
  • Assessment for development of new transmission and potentially competitive wind projects in proximity.
  • Overview of risks; financial, regulatory, and otherwise.

Results: Report was well received and is being used as described by developer.


GENERATION PORTFOLIO VALUATION & MARKET STUDY – NEW YORK

Ongoing

Client: Generation Owner

Summary: ESAI advised client on the economics and value of its portfolio of thirteen (13) generation assets producing some 4,200 MWs of electricity in New York.

  • Provided: 10-year forecasts for energy clearing prices in specific zones, zonal price deltas, gas and fuel oil forecasts, capacity market forecasts, capacity factors, and EBIDTA cash flow analysis.
  • Conducted numerous data runs, phone calls with owners, and advised client over numerous months of work.

Results: Study and accompanying report still being developed and worked through in concert with client.


RENEWABLE TRANSMISSION DEVELOPMENT – NEW YORK

Completed

Client: Transmission Developer

Summary: ESAI authored a study assessing the potential development of a transmission line from upstate New York in Zone F to Manhattan and New Work City, Zone J. The line would carry renewable energy from Zone F. ESAI advised on status of transmission development in NY, the pros and cons of such, and the general willingness of various groups in New York state to support such development in concert with the leaders of a New York regulatory agency, and modeled impacts on the system from withdrawal and injection perspectives.

  • Provided analysis and insight based on ESAI’s understanding of the power, renewable, capacity and transmission markets in New York.
  • Worked closely with executives to develop themes and issues for the study in a clear and concise fashion.
  • Authored study to be presented to potential investors and financial partners.
  • Overview of risks; financial, regulatory, and otherwise.

Results: Report was well received and is being used as described.


2008

WHITE PAPER ON STATE OF TRANSMISSION – NEW YORK

Completed

Client: State Regulatory Body

Summary: ESAI authored a white paper on the status of transmission development, the pros and cons of such development, and the general willingness of various groups in New York state to support such development in concert with the leaders of a New York regulatory agency.

  • Provided analysis and insight based on ESAI’s understanding of the power, capacity and transmission markets in New York. Assessed neighboring pools transmission status as well.
  • Worked closely with executives at regulatory agency to develop themes and issues for the paper in a clear and concise fashion.
  • Authored report to be presented to senior leadership at a time of their choosing.

Results: Report was well received within the regulatory agency.


GENERATION PORTFOLIO EVALUATION & MARKET STUDY – NORTHEASTERN US

Completed

Client: Major Generation Owner

Summary: ESAI advised client on the economics and value of its portfolio of eight (8) generation assets producing some 5,000 MWs of electricity in New England and New York.

  • Provided: 10-year forecasts for energy clearing prices in specific pools and zones, zonal price deltas, gas and fuel oil forecasts, capacity market forecasts, capacity factors, and EBIDTA cash flow analysis.
  • Conducted numerous data runs, group meetings to discuss analysis, phone calls with plant operators and owners, and advised client for 4 months.

Results: Owner using analysis to assess best alternatives for the portfolio. Ongoing follow-up expected as market conditions improve.


2007

SELL-SIDE ASSET VALUATION – NEW YORK

Completed

Client: Major Investment Bank & Utility

Summary: ESAI conducted a full scale asset valuation and advised client on the economics around the divestiture/sale of a very large generating asset in Zone J in New York, providing some 20% of the power for New York City.

  • Provided; price forecasts for Zone J vs. ROS, gas and fuel price forecasts, capacity market outlooks, capacity factors, O&M costs, cash flow analysis and NPV based on energy/capacity revenues.
  • Conducted numerous interviews and walkthroughs with plant operators, investors, and traders.
  • Authored report to be included in Offering Memo to all plant bidders.

Results: Bank took asset successfully to auction and ESAI continues to provide updates to winning bidder.


MARKET STUDY & PPA ASSESSMENT/NEGOTIATION – DELAWARE

Completed

Client: Major Wind Developer

Summary: ESAI advised client on the economics around the building of a large wind farm in Delaware, as well as providing guidance and counsel as they negotiate a PPA with the local utility.

  • Provided: price forecasts for PJM East (DP&L Zone specifically) and specific local nodes, gas and fuel price forecasts, capacity market forecast/outlook, capacity factors, O&M costs, cash flow analysis and energy/capacity revenues.
  • Worked with developer and various state representatives on negotiation of long term PPA for the asset.
  • Conducted numerous data runs, phone calls w/ plant developers and potential investors.

Results: Developer took ESAI report public, negotiations for PPA are concluded, and permits are forthcoming for development of large offshore wind farm in Delaware.


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For more information about ESAI Power & Renewables, please contact Director of Business Development Tommy Sutro at tsutro@esai.com