Energy Pricing for Definitive Feasibility Study
Energy Pricing
PCS supported a mining client in determining an energy procurement strategy and anticipated energy pricing for a 20MW greenfield project in Western Australia.
PCS conducted the following activities on behalf of the client:
- Developed a typical daily energy profile
- Derived the upper limits for gas delivery quantities comparing against other projects
- Derived the typical gas delivery quantity allowing for project ramp up and shut downs
- Sought fuel pricing for diesel and natural gas, and forecast consumption
- Modelled a number of gas, gas-diesel and diesel engines and turbines to come up with an expected levelised cost of energy
- Carried out sensitivities to the above including solar and battery storage
- Engaged with a number of potential suppliers for the customer
- Introduced the customer and the suppliers
This project proceeded to Final Investment Decision (FID).
Evaluating Energy Options
PCS supported a small mining client in determining their viable energy supply options and providing indicative energy pricing.
PCS investigated:
- Connection costs to the local grid including capital costs for upgrades
- Connection costs to gas pipelines
- Costs for a mobile diesel powered power station
- Costs for delivered diesel and gas and electricity costs for grid supplied electricity
- Future costs in today's dollars and determined the most attractive energy cost
PCS recommended an energy procurement strategy, consistent with the customer’s objectives and the project is moving towards a Final Investment Decision.
Evaluating energy options for a small mine
Due Diligence on Acquisition
Due Diligence
PCS supported a special purpose vehicle established to buy oil and gas assets.
PCS :
- Conducted a review of the existing customers, potential customers an future customers for natural gas
- Provided modelling of the geographical supply envelope
- Evaluated competing gas suppliers, both existing and potential
- Considered potential expansions of the market via new pipelines
- Delivered a supply-demand profile for the customer including contracted revenues over the investment horizon
- Provided guidance on dealing with regulated transmission pipelines
Full Energy Procurement Service
PCS managed energy procurement for a mine and processing facility by:
- Developing a typical daily energy profile
- Deriving gas demand quantity comparing against other projects
- Deriving a typical gas demand quantity allowing for project ramp up and shut downs
- Seeking fuel pricing for diesel, natural gas, LPG, trucked LNG and crude oil and developing a forecast based on available data
- Modelling a number of fuel supply costs
- Carrying out sensitivities to the above including solar and battery storage
- Engaging with a number of suppliers to test their willingness to supply the customer
- Providing indicative energy costs for the project’s Definitive Feasibility Study
- Preparing Request for Quotation documentation
- Receiving responses and comparing all quotations on a like for like basis
- Recommending proposals based on total energy cost over the life of the project
- Carrying out clarification sessions with respondents as needed
Full Energy Procurement Service
ACCESS TO GAS PIPELINE SERVICE
Access to gas pipeline service
PCS supported a gas producer negotiating access to a pipeline for a new bespoke service.
PCS:
- Provided the producer with a strategy document, outlining the different approaches to negotiation to achieve the producer’s aim
- Outlined the terms on which the transmission pipeline would be willing to negotiate
- Outlined stakeholders and the consultation process
- Provided independent feedback into the regulatory process
- Outlined how the producer could engage with the regulator
- Participated as part of the negotiation team
- Reviewed draft contracts and provided expertise to the commercial and legal teams
The transport service was delivered consistent with PCS’s recommendation in the strategy.
Reviewing responses from a tender for electricity supply to a mine site
PCS assisted a client with reviewing tenders received after they had gone to market for power supply.
PCS:
- Took the responses from the tenderers and applied it to our own model
- Benchmarked the tariffs proposed and the tariffs PCS would have expected for the same engine technology
- Made inquiries to diesel and gas suppliers to verify anticipated diesel delivered prices and gas prices
- Recalculated the Levelised Cost of Energy for all proposals, so that they were evaluated on a like for like basis
- Calculated the Scope 1 green house gas emissions for each of the proposals
- Ranked the projects on a Levelised Costs Basis, cost per tonne of CO2-e emitted and according to the tenderer’s proposed tariff
- Provided feedback on the attached contracts
The project selected their preferred supplier.
Minesite Electricity Supply
