K&M Advisors Support Guam’s Ambitious Energy Transition Plans with LNG Infrastructure Development
K&M Advisors is proud to add another island to the list of islands where K&M is advising on energy transition. In this case, K&M is supporting the Guam Power Authority’s (GPA) transition towards lower costs and cleaner energy through the development of critical LNG infrastructure for the island’s Ukudu Combined Cycle Power Plant.
Under this contract, K&M Advisors is leading a team, including GHD (marine experts) and CH-IV (gas experts), advising GPA on the technical and commercial feasibility of developing an LNG import solution to supply natural gas to the 198 MW Ukudu power plant. The Ukudu plant will be commissioned in 2025 and will run on Ultra-Low Sulfur Diesel until natural gas is available. K&M’s scope of work includes a thorough demand analysis, sourcing and delivery options, site and configuration selection, conceptual design, and cost estimates for the LNG import solution. Additionally, K&M will assess possible business models and financial viability to ensure a robust foundation for the project. If the feasibility is confirmed, we will support GPA in procuring the terminal, negotiating a gas supply agreement, and overseeing the implementation phase.
Like other island economies undertaking energy transition plans, Guam has set ambitious renewable energy goals that would gradually displace thermal generation. This makes K&M’s work more challenging. The LNG/gas supply solution that GPA would develop needs to be commissioned as soon as possible to maximize fuel cost savings from switching from USLD to natural gas. However, this solution also needs to be flexible to accommodate a decreasing gas demand as renewable energy generation increases. The LNG/gas solution would also need to accommodate potential delays in the implementation of renewable energy projects or climate changes that result in higher electricity demand or lower renewable energy generation.
K&M has developed a set of tools to manage these challenges. For example, develop a gas demand forecasting model that estimates gas-fired power plant hourly dispatch for each year through 2050, considering factors such as electricity load, hourly generation from renewable sources, BESS charge and discharge, and the plant’s availability and heat rate curves. K&M’s model evaluates scenarios based on realistic assumptions on critical variables like renewable energy penetration. Similarly, K&M has developed contract provisions that ensure that GPA does not commit to onerous take-or-pay obligations but that the gas supplier recovers its fixed costs as volumes decrease. These and other tools developed by K&M are enabling the viability of LNG in small islands like Guam with ambitious renewable energy goals.
K&M sees significant potential for offshore wind to support the energy transition in countries with limited land for onshore wind development. In particular, several Caribbean islands located in regions rich in wind resources are increasingly finding it challenging to secure permits for new onshore wind farms due to land constraints. Offshore wind could offer a viable and cost-effective alternative for these regions.
Recently, K&M assisted a Caribbean utility in evaluating the feasibility of adding offshore wind to its energy portfolio. The company identified potential offshore wind farm sites within the country’s Exclusive Economic Zone that met several key criteria: suitable for either fixed-bottom or floating substructures, located outside of marine protected areas and wetlands, with wind speeds above 7 meters per second, and clear of major maritime navigation corridors.
K&M then analyzed HVAC and HVDC interconnection options and overall wind turbine configuration and estimated the levelized cost of energy (LCOE) for the selected sites across a range of installed capacities. The study revealed the optimal installed capacity for minimizing LCOE. It also found that while larger capacities could help the country achieve its 100% renewable energy target, they would result in energy curtailment and significantly higher LCOEs. However, the costs associated with these larger installations could be reduced if the excess energy is utilized for other purposes, such as producing e-fuels.
K&M was engaged by the U.S. Trade and Development Agency (USTDA) to aid in the analysis and development of activities that enhance the pipeline development for the Alliance for Green Infrastructure (AGIA) in Africa, a collaboration led by the African Union, the African Development Bank and Africa50, and including several global partners. The mission is centered on identifying and evaluating potential green infrastructure projects for project development.
Collaborative efforts between USTDA and Africa50 aim to expedite Africa’s transition to net-zero by preparing, developing, and financing green infrastructure projects, thereby accelerating and scaling priority climate resilient infrastructure development across the continent.
As part of this initiative, green infrastructure projects will be identified, screened and assessed across diverse sectors such as renewable energy, transport and logistics, water and sanitation, broadband and ICT infrastructure, health, and urban and rural infrastructure. Detailed project reports will be developed for up to 10 discrete green infrastructure projects for funding consideration by members of AGIA’s Project Development pillar, including USTDA and Africa50.
“We’re excited to be working with USTDA and Africa50 on this important initiative”, said Derek Martin, K&M’s Managing Director of Transaction Services. “K&M’s work will identify candidate projects not only align with the strategic objectives of USTDA and AGIA but also significantly contribute to sustainable infrastructure development across Africa, fostering global green growth initiatives.”
This past week, K&M had the incredible opportunity to attend the 3rd Hydrogen Congress held in Colombia, highlighted several important takeaways that are shaping the future of hydrogen in the region:
1. Strategic Positioning for Green, Blue, and White Hydrogen: Colombia is leveraging its high availability of renewable energy resources to produce green hydrogen cost-effectively. With the potential to reach cost competitiveness by 2030, Colombia is focusing on developing blue, green, and white hydrogen technologies to meet future demands and stimulate local economic growth
2. Infrastructure and Market Development: The Congress discussed the need for regulatory and policy frameworks that support the hydrogen economy. This includes creating a conducive environment for pilot projects in various sectors, such as transport, industrial uses, and power generation, which are crucial for the practical deployment of hydrogen technologies.
3. International Cooperation and Technology Sharing: Colombia is actively seeking international partnerships to advance its hydrogen initiatives. The roadmap emphasizes cooperation with countries and organizations that can provide technological and infrastructural support, highlighting the importance of global collaboration in advancing the hydrogen market.
These takeaways illustrate Colombia’s proactive approach to integrating hydrogen as a key component of its energy strategy, focusing on both technological development and international collaboration to drive the adoption of hydrogen-based solutions
We are delighted to announce that K&M Advisors will be playing a pivotal role at the 16th annual Caribbean Renewable Energy Forum (CREF), taking place from April 24-26, 2024.
As proud sponsors and participants in this premier event, our experts from K&M Advisors are set to contribute to the dialogue on renewable energy in the Caribbean. Join Nils Janson, Alfonso Guzman, Lindsay Burkhard, and Cristina Cano as they lead enlightening sessions on the following:
- Cristina Cano will delve into “The Future of Large Renewables in the Caribbean,” offering insights into off-shore wind and geothermal energy from 3:15-3:30 PM.
- Nils Janson will be moderating an engaging panel from 4:00-5:00 PM, centering on the role of geothermal and offshore wind in securing clean and reliable energy for the region.
We invite you to engage with us as we delve into the data, assess project viability, and strategize on upscaling renewable energy initiatives in the Caribbean.
#CREF2024 #RenewableEnergy #K&Madvisors #SustainableFuture
Samra Electric Power Company (SEPCO), a power utility in Jordan, has indicated the power grid has had difficulty covering peak loads observed during high temperature periods. As a result, SEPCO reviewed potential solutions for its Samra Power Plant to increase power plant generation during these peak periods. SEPCO’s intent was to modify the gas turbines by installing a fogging system in the gas turbine inlet to increase plant power generation during high-temperature periods. K&M Advisors was engaged to evaluate the technical and commercial viability of the fogging system installation. The primary aim of the evaluation was to review the design of generating units’ and auxiliary equipment and systems to determine their ability to support the increased power output during fogging system operation.
Gas turbine inlet air fogging consists of spraying water droplets into the inlet airflow of the gas turbine cooling the air by evaporation. When the fogging system is operated, the mass flow of the working fluid (air) increases through the gas turbine due to the water evaporation in the gas turbine inlet and decrease in the inlet air temperature. The increased mass flow causes an increase in gas turbine power output as the gas turbine compressor is more efficient at lower air temperatures. In addition to gas turbine power output, the implementation of a fogging system increases HRSG steam generation and in turn an increase in steam turbine output and exhaust steam flow. This increase in steam turbine output impacts the Air-Cooled Condenser (ACC) operation.
To assess the adequacy of the auxiliary systems when implementing the fogging system, K&M first developed GateCycle models of combined cycle plants. Using these models, K&M calculated heat and material balances for different ambient temperatures without and with the fogging system. For each combination of the ambient temperature and fogging system status, K&M developed a spreadsheet summarizing the system power output and power output increase, heat rate and heat rate change, fogging system evaporation rate/demineralized water requirements, and other steam and water parameters impacting operation of HRSG, steam turbine, ACC, and other auxiliary equipment that could be impacted by the fogging system. In addition to the mechanical equipment, all electrical equipment on the power generation side was also evaluated for potential impacts.
The overall conclusion of the study is that each phase of the plant experiences an increase of approximately 7-8% power output with the fogging system active which is a substantial output increase to the grid. The mechanical and electrical equipment for each phase of the plant was evaluated and verified to be capable of handling implementation of the fogging system. The major impact to current plant operation when implementing the fogging system is the water usage required for operation. The demineralizer system was analyzed to calculate the water requirements for the fogging operation for two modes of plant operation (non-cycling and cycling). The conclusion of this analysis is that the existing demineralizer system requires a combination of modifications to the demin water storage tanks, transfer pumps, and distribution piping to increase the capacity of the demin system to supply the fogging system. An alternative option is to add demin water production capacity along with additional storage. The additional water required also impacts the waste water capacity and could create an impact to the waste water treatment system.
As the procurement of the system developed, quotes were received for the fogging system installation, and it was determined that adding the fogging system is a very cost-effective way of getting peak power as compared to the construction of a peaking plant to handle peak loads. The total cost of modifying the gas turbine air inlet with the fogging system and additional demineralized water storage and pumping equipment is approximately 8% of the total cost of a new peaking plant with minimal impact to the existing plant. As a result of this comprehensive evaluation of all relevant equipment and systems along with the cost comparison of a fogging system against a new peaking plant, K&M recommended implementation of the fogging system for all four phases of the Samra plant.
K&M Advisors attended the Powering Africa Summit on March 5-6, where they had many engaging discussions and productive meetings with industry colleagues. The event was a wonderful platform for collaboration and knowledge sharing among governments, investors, developers, and technology providers in Africa’s energy sector. They also co-hosted a dinner with partner White & Case, Martin Menski and Suzanne Perry. Thanks to those friends and colleagues who spent the evening with us Alfonso Guzman, Derek Martin, Nils Janson, Natalie Natsumi Tsukano, Anneliese Gegenheimer, Stephen Mallowah, Erik Granskog, Jay Ireland, Kweku A. Awotwi, Vickson Ncube, Evans Twaambo, Tanyaradzwa Angela Gumbo, Yusuf Umar, Bassem Abou Nehme, CFA, Abiodun Aina, CFA, Alan Townsend, and Erica Koszalka Ehst.
K&M is looking forward to attending the Powering Africa Summit next week in Washington D.C. As we gear up for the 9th edition of this impactful event, we’re looking forward to engaging in meaningful discussions and exploring innovative solutions under this year’s theme, “Capital Flows Underpinning the Energy Transition.”
If you’re attending PAS, be sure to connect with our K&M colleagues Derek Martin and Anneliese Gegenheimer.
Let’s collaborate and drive the energy transition forward, creating a brighter, more sustainable future for all. See you there!
#PAS24 #PoweringAfricaSummit2024 #SustainableEnergy #EnergyTransition #CleanEnergyInvestment #K&MInitiatives
We are thrilled to share the latest update on our collaboration with KBR on the Singapore Ammonia Project. K&M has been working closely with KBR to support the commercial work stream in the design of an RFP for a cutting-edge clean ammonia project in Singapore.
K&M is advising the Singapore government on the commercial structuring of the RFP process. Our team has been actively involved in shaping this sustainable ammonia project by providing insights and guidance on critical commercial aspects.
Key Areas of Involvement:
- Assessing candidate PPP (Public-Private Partnership) models suitable for this project, weighing the pros and cons of each option.
- Delving into government funding and ownership options, considering their implications under different timing scenarios.
- Exploring termination/buyout concepts, ensuring a comprehensive understanding.
- Identifying funding support mechanisms and incentives and evaluating their feasibility and impact.
- Advising on the use of a Contract for Difference (CfD) concept, with a thorough analysis of its pros and cons.
- Providing guidance on how to structure key funding and commercial parameters within a Request for Proposals (RFP).
K&M is dedicated to making a meaningful contribution to the success of this sustainable project. We are excited to play a crucial role in shaping forward-thinking solutions for Singapore’s clean energy market. Join us on this journey toward a greener and sustainable future! We look forward to sharing more updates as the Singapore Ammonia Project continues to evolve.
K&M is elated to be part of a game-changing development in the Caribbean region. Water utilities across the Caribbean now have access to parametric insurance coverage against extreme weather events like hurricanes, tropical storms, and excess rainfall. This groundbreaking initiative, known as the Caribbean Water Utility Insurance Collective (CWUIC), is nestled within CCRIF SPC (Caribbean Catastrophe Risk Insurance Facility).