Selected Projects

Botswana: Development of a PSP Strategy for Botswana Power Corporation and the Electricity Supply Industry

The objectives of this assignment were to produce a private sector participation strategy in BPC and Botswana’s Electricity Supply Industry. PEEPA will use this as support for providing on-the-job training to PEEPA staff on core privatization skills illustrated by the BPC case. We were appointed to:

  • - Carry out a study to assess possible opportunities and options and develop an optimal private sector participation strategy through which the private sector can be involved in the operations of and services provided by BPC to deliver on the Government’s strategic objectives in line with the Privatization Policy of Botswana.
  • - Develop a detailed financial model. This model separated generation, transmission and distribution and also allowed for subsidy from Government for the Botswana Power Corporation.
  • - Provide training to PEEPA on core privatization skills, using BPC’s case as a support for both in-class and on-the-job training.

Nigeria: Baseline Losses Support to Nigerian Electricity Distribution Companies

We are advisors on regulatory, tariff, commercial and power market matters to the management and shareholders of many of the Electricity Distribution Companies in Nigeria. Support during the Baseline Loss study included fieldwork within the Discos’s franchise zone. We undertook large data extractions from the pre- and post-paid customer database platforms located at different Business Units. Models were developed to analyse and clean the extracted data and in turn quantify the levels of ATC&C losses and report on and present findings to the Regulator.

UK: Use of Novel Statistical Tools in Fuel Price Forecasting for DECC

In partnership with Heriot Watt University, we investigated the suitability of using a customised copula to capture the interdependency between fossil fuel prices. The copula will be used by the UK Department of Energy and Climate Change (DECC) to generate correlated samples around the central fossil fuel price projections for use in Monte-Carlo modelling to understand the uncertainty around fuel price projections based on historic data. DECC subsequently commissioned a further study into the suitability of Monte Carlo sampling approaches.

Cyprus: Privatisation of the Electricity Authority of Cyprus (EAC)

This project included the assessment of all possible scenarios and options regarding the future structure and ownership regime of EAC. We examined the retention of the EAC as a vertical integrated entity but with appropriate accounting separation and functional unbundling in place for its five current functions (either state controlled or privatized). We also assessed options for appropriate and effective EAC unbundling into separate legal entities that may be subsequently privatised.

Mexico: Solar IPP Development

The Mexican power system operator – CENACE – initiated a competitive tender process in December 2015 for the long-term (20-year) procurement of electricity exclusively from clean energy generators. MRC was hired by a Spanish solar power developer to assist in determining a competitive commercial and pricing structure for submission in the competitive bid that would allow for a profitable return on the consortium’s investment in the projects. The objective was to adapt the Client’s business model to the Mexican context by fully examining the bid requirements (and off-take agreements), in coordination with the existing and evolving) market scenarios in the country. We were involved in all regulatory, tariff, commercial, techno-economic, and financial aspects of the project.

Pakistan - Strengthening of Central Power Purchasing Agency

The license of the National Transmission and Dispatch Company (NTDC) was amended in May 2015 to separate the market settlement function to an independent Central Power Purchasing Agency Guarantee Limited (CPPA-G). The Market Operator Rules and the Commercial Code were approved by the Government and the National Electric Power Regulatory Authority (NEPRA) to govern the commercial transactions of the power market. CPPA-G has also signed a number of new and revised agreements to start its initial stage of operations. The objective of this project is to support and enable CPPA-G’s establishment and commencement of its operations. We are providing management support, capacity building, access to expert resources, and training for the CPPA-G management team and employees principally by embedding the required international and national staff in CPPA-G in advisory and supporting roles.

Brazil - Regulatory Support to Water and Sanitation Companies

The objective of these assignments was to prepare companies for the regulated environment. We performed studies recommending best national and international regulatory practices and proposed methodologies and support during the tariff setting process. This included modeling and recommendations of tariff structure adjustments and subsidy policy, including intensive in company training.

Brazil - Assistance to Distribution Companies (EDCs)

The objective of these assignments was to assist the (EDCs) to determine the revenue requirements of the companies and the end-user tariffs that will allow recovering the efficient operation costs of service (OPEX and CAPEX) during the 1st, 2nd and 3rd Tariff Setting Periods. This included discussion and modeling of methodologies to be applied by the Electricity Regulator ANEEL. We provided economic and technical assistance in various areas such as determination of efficient operating costs, technical and commercial losses indicators, bad debt analysis, development of an efficient investment plan, regulatory asset base, capital costs, market projection, productivity analysis and tariff structure.

Brazil - Tariff Structure of the Electrical Energy Sector

This project had great significance on the energy sector. We reviewed and recommended the best international practices and the problems related to the Brazilian tariff structure and recommended proposals to improve the actual tariff structure. This included modeling of a new tariff structure to include tariff charges, subsidies and risk analysis and suggestions for the transition period.

Russian Federation – Regulatory Framework for RES Development

We have actively participated in renewable energy development in Russia, drafting the new and adapting the existing normative and regulatory framework for RES energy development from 2013 until now (2016). The beneficiaries of these projects are the Ministry of Energy and Market Council of Russia, the Ministry of Economy as well as major renewable market players.

Russian Federation – Investment in RES Projects

We have performed a chain of consulting projects starting from 2013 until now to advise Russian and foreign investors on the effective introduction of RES investment projects including SHPP, solar PV, wind, landfill gas, biogas and biomass). We took into consideration the current RES legislation and normative support. Our clients include Windlife (Netherland), Vireo Energy (Sweden), Vestas (Denmark), Avelar Solar Technology (Russia), Solar Systems (China /Russia) and Nord Hydro (Russia).

Andean Community: Electricity Interconnection Planning and Regulatory Harmonization

The Inter-American Development Bank (IDB) engaged us to work on the regional electricity integration of all participating countries, to maximize the economic benefits of the whole region. The study was carried out considering the following analysis; Bilateral electricity interconnection solutions between countries; Regional electricity interconnection, including the previous ones plus necessary reinforcement works in the national networks to increase the whole transmission capacity; Sustainable alternatives of the Andean Electricity Interconnection by considering a multidimensional analysis (technical, economic, social, environmental, institutional, political, regulatory, etc.) resulting from a broad consensus among the actors involved. In addition, we developed a proposal for regulatory harmonization to allow the interconnection of the Andean countries in a non-discriminatory, efficient and sustainable way.

Argentina: Wind-Electricity Map of Buenos Aires

We developed a pre-feasibility tool that allows identifying regions with both wind energy generation potential and capacity availability in the electricity network. We analyzed the sub-transmission network and identified the nodes in the high and medium voltage systems that could be an opportunity to channel investments on wind farms of different scales. At the same time, we identified exclusion zones for the wind resource exploitation, those being determined by urban characteristics, natural reserves, national parks and protected areas of biodiversity.

Mexico: Economic Optimization of the Electricity Sector.

We provided recommendations and proposals for the new market structure proposed by SENER. This included the analysis of the following aspects; Regulation and payment process required to ensure continued operation of the electricity sector during the transition process; market regulations and other transitional rules; financial flow projections among the CFE business units, end users and other players in the electricity sector as well as the basic financial results of each CFE unit under the proposed market structure and during the transition period and estimates of tariff levels for end users during the transition period.

Philippines: Regulatory Reset Expert of the Energy Regulatory Commission

We have been providing advisory services to the Energy Regulatory Commission of the Philippines for several years for different regulatory resets involving different regulated entities. Among the projects we have undertaken for the Commission includes: Development of the Optimised Depreciated Replacement Cost Handbook for Private Distribution Utilities; Review of the Historic, Budget and Forecast Expenditure of the National Grid Corporation of the Philippines for the 3rd Regulatory Period under Performance Based Regulation; Review of the Optimised Depreciated Replacement Cost/Regulatory Asset Base Valuations of 1st Entry Group of Private Distribution Utilities (3 utilities including Manila Electric Company) Entering Performance Based Regulation for the 3rd Regulatory Period; Review of the Budget and Forecast Expenditure of the 4th Entry Group of Private Distribution Utilities (6 utilities) Entering Performance Based Regulation for the 2nd Regulatory Period; Development Transmission Planning Guidelines for the National Grid Corporation of the Philippines; Development of the Regulatory Asset Base Handbook (Roll-Forward Handbook) for Private Distribution Utilities and the Valuation and True Up Process Review of Manila Electric Company; and Overseas Regulatory Trainings for the Energy Regulatory Commission and Private Distribution Utilities.

New Zealand: RAB Valuation Review of Electricity Distribution and Gas Pipeline Business

Three separate reviews were undertaken for the Commerce Commission of New Zealand in relation to the Regulatory Asset Base (RAB) Valuation and Asset Adjustment Processes of Electricity Distribution Businesses (EDBs) and Gas Pipeline Businesses (GPBs).

Price-quality regulation (a form of performance-based regulation) is designed to ensure that EDBs and GPBs have similar incentives and pressures to suppliers operating in competitive markets and also aims to limit the ability of suppliers to earn excessive profits, while ensuring that consumer demands on service quality are met. A fundamental component of a default price-quality path (DPP) is the starting prices that are specified for each regulated supplier. A DPP reset is an opportunity to determine appropriate price and quality controls for the future. To inform the Commerce Commission on its decisions on any starting price adjustments for the DPP for the different regulatory periods, all the EDBs and GPBs were permitted to undertake an “asset adjustment process” for setting its initial RAB.

A total of 24 asset adjustment applications were reviewed by NCL: six (6) Exempt EDBs, fourteen (14) Non-exempt EDBs, and four (4) GPBs.