ENERGY | Projects

  • Private Investment in Rural Non-Grid Power Supply, Philippines
    The Government of the Philippines implemented a reform package to attract private investment in small non-grid power systems to improve coverage, reliability, and affordability of electricity services in rural areas. Castalia worked as part of an IFC-team to launch a competitive bidding process for investment opportunities on three islands and was responsible for the technical due diligence within the tender documentation. The tender successfully engaged private sector investors to invest in electricity supply. Read more
  • Coal Generators Response to Proposed Cap and Trade Regulation, Australia
    The Australian Government proposed a carbon trading scheme that threatened to wipe hundreds of millions of dollars off the value of Australian coal-fired generation plant. Castalia advised the owner of Babcock & Brown Power on ways to negotiate with the Government on the availability of compensation, based on established legal remedies for regulatory expropriation
  • Development of US$60 million Hydro Generation Project, Nicaragua
    An infrastructure investor was developing a hydroelectric project in Nicaragua. Castalia advised the investor on optimal plant size and trading strategy by developing a comprehensive financial model of plant dispatch, financing costs and plant cash flows. Castalia also helped raise additional equity and debt for the project, which resulted in a joint development agreement with IFC InfraVentures
  • Valuation of Interests in Power Purchase Agreement, Tanzania
    The Government of Tanzania is involved in a long-running dispute over payments due to the private owner of a 100MW thermal generation plant under a power purchase agreement. Castalia provided expert advice to the Government on quantum issues related to changes in the capital structure of the power producer. The case leverages Castalia’s experience analyzing private investment in emerging power markets and advising on power purchase agreements
  • Purchase of Coal and Hydro Power Plants, Philippines
    AES expressed interested in purchasing the 600MW Masinloc coal-fired station in the Philippines. Castalia developed a model to forecast plant dispatch and wholesale prices in the Philippines wholesale electricity market. Castalia’s analysis helped to determine plant revenues and operating costs, which were important inputs to the successful US$930 million bid for the plant. AES then wanted to expand its electricity generation portfolio in the Philippines by acquiring 175MW of hydro generation assets. Castalia used its electricity market model to forecast the dispatch and prices for the plant, accounting for hydro inflow variability, turbine efficiency, reserve energy requirements and transmission constraints
  • Evaluating Tenders for 60MW of Renewable Electricity Generation, Jamaica
    To promote the development of renewable energy in Jamaica, the Office of Utilities Regulation called for tenders for renewable electricity developments that will be underpinned by power purchase agreements. Castalia helped the regulator develop a methodology for this first evaluation of renewable energy tenders, and provided external quality assurance throughout the evaluation process. The tender successfully achieved the objective of facilitating least-cost renewable electricity investment in Jamaica
  • Review of Powerco’s Gas Distribution Tariffs, New Zealand
    New Zealand’s Commerce Commission issued a draft determination cutting Powerco’s gas distribution tariffs by 42 percent. Castalia was engaged by Babcock and Brown Infrastructure, Powerco’s owner, to develop a strategy in response. We helped Powerco to address the Commission’s specific concerns, and to highlighting the public interest in continued investment in gas distribution. We also pointed out errors in the Commission staff’s calculations. Our work contributed to a substantial roll-back of the proposed cuts, with the final decision reducing tariffs by only 10 percent
  • Regulatory Advice to Transmission Provider on Grid Upgrades, New Zealand
    The monopoly electricity transmission company in New Zealand proposed an upgrade into the country’s largest city to serve growing demand. Approval of the transmission line from the sector regulator was required in order for the company to recover the costs of the investment from consumers. Castalia advised the transmission company on aspects of its submission to the regulator, including the impacts of transmission investment on technical losses and broader economic impacts such as business confidence. The transmission investment was ultimately approved by the regulator
  • Purchase of Major New Zealand Electricity Generator, New Zealand
    Edison Mission Energy decided to exit the New Zealand energy market through the sale of its electricity generation and retail business. The company held a diverse portfolio of over 2,000 MW of hydro, geothermal and gas-fired assets and had a retail market share of over 20 percent. Castalia analysed the possible effects of the transaction on market power for a potential buyer, and prepared a submission to the competition authority outlining the likely market impacts of the acquisition
  • Developing a Legislative Framework for Renewable Energy, Dominica The Government of Dominica wanted to develop overall legal and regulatory framework for renewable energy initiatives in the country, with a particular focus on geothermal energy. Castalia evaluated how renewable energy resources are developed internationally, and recommended policy and regulatory measures to help the Dominican Government achieve its objectives. We are also developing draft legislation and regulations to implement these recommendations.