A private client contracted K&M to assist in evaluating the feasibility of integrating Offshore Wind resources in the Caribbean.

In this assignment, K&M is responsible for researching offshore wind design considerations, identifying offshore wind siting and configurations viable for the Caribbean, and calculating the levelized cost of electricity (LCOE) for various offshore wind scenarios. Topics covered in the offshore wind design research include siting considerations (water depths, distance to shore, wind speeds, spacing, and shipping routes), substructure types, wind turbine sizing, transmission options, and estimated CAPEX and OPEX for key offshore wind components. Based on these factors, K&M will perform a high-level siting analysis for the Caribbean and develop cost estimates for wind farms of three sizes, including a discussion of the indicative BESS capacity that should be added to the client’s grid to provide sufficient operating reserves for each scenario. Based on these results, K&M will estimate the LCOE generated by each offshore wind/BESS scenario. K&M will deliver its findings in a PowerPoint presentation to the client’s staff.

The Government of Morocco intends to increase the country’s energy security by reducing its dependence on imports and diversifying its sources of natural gas imports. The Moroccan Ministry of the Energy Transisiton and Sustainable Development has contracted the International Finance Corporation (IFC) to assist in the design and tender of an LNG import and regasification terminal and related downstream infrastructure. This includes a sustainable LNG import terminal in the port of Nador West Med, a gas pipeline to connect the terminal to the Maghreb – Europe Gas Pipeline (GME) to the south (140km), and a gas pipeline to connect the industrial zone in Mohammedia to the GME to the west (220km). In May 2024, IFC retained Rogan Associates to provide engineering services related to the infrastructure design and feasibility studies for the LNG import terminal and pipeline project. Rogan Associates retained K&M Advisors LLC to review and comment on the feasibility study and related reports for the project.

In this assignment, K&M is tasked with several key responsibilities. Firstly, K&M will review and provide feedback on various critical documents, including the inception report, draft final report, final report, and the technical inputs to the bidding documents. Additionally, K&M will participate in calls with the International Finance Corporation (IFC) as requested by the Client, ensuring consistent communication and alignment on project objectives and deliverables.

Guam Power Authority (GPA) procured a 198 MW Ukudu combined cycle power plant on an IPP basis. The plant is expected to enter commercial operation in third quarter of 2025 and will initially operate on Ultra Low Sulfur Diesel. GPA intends to develop an LNG terminal to convert the Ukudu plant to operate on natural gas. K&M was retained as a lead consultant to assist GPA in conducting LNG terminal technical and commercial feasibility analysis, and, if proven feasible, to assist in procurement of the LNG terminal and negotiating as gas supply agreement.

Currently, K&M works on the Phase 1 of the project, which includes such tasks as estimating the LNG demand, analyzing source and delivery options, selecting the preferred site and configuration for the LNG terminal and developing terminal conceptual design and cost estimate. The scope of work also includes analysis of the possible business models, financial analysis, determining project feasibility and developing recommendations on whether to proceed with procurement of the LNG terminal. If GPA decides to proceed, K&M will assist GPA in procurement of the LNG terminal and LNG, negotiating a gas supply agreement, and overseeing work during the LNG terminal implementation.

Biomass power generation is an attractive option for the Mauritian island grid because it offers dispatchable generation, uses agricultural waste as fuel, and has lower emissions than fossil fuel technologies. The climate rationale to transition the Omnicane Independent Power Producer (IPP) to 100% biomass is even stronger because it will displace CO2-intensive coal generation with local or imported biomass generation.

Despite its benefits, biomass power generation projects are risky and could be unpopular. One of the main risks is feedstock supply. Biomass supply can present significant seasonal variations, which, combined with storage limitations, can lead to significant supply-demand imbalances. Biomass can also have significant year-to-year supply variations due to variability in yield from biomass harvesting operations or reductions in cultivated land. Furthermore, biomass projects can be controversial and elicit local criticism.

IFC is aware of these types of risks and concerns about biomass and the Omnicane project and wants to commission this high-level study to analyze the financial, economic, and climate implications of transitioning the Omnicane IPP to 100% biomass. The results of the study should show, with data and objective analysis, if this transition is a better economic and climate choice than continuing with the current biomass-coal operation or developing another technology that is dispatchable and has low carbon emissions.

The K&M team will estimate the levelized cost of electricity (LCOE) for the Omnicane power plant when burning biomass (sugar cane bagasse) and coal, as well as only biomass. In addition, K&M will seek to understand the biomass supply chain risks and mitigation options. K&M will then identify a shortlist of realistic dispatchable alternatives to the 100% biomass Omnicane IPP and to develop an estimate of the LCOE of these alternatives. To complete this work, K&M will develop an LCOE model to estimate the LCOE and CO2 emissions cost of all generation possibilities, including:

• Existing plant – bagasse + coal
• 100% biomass plant – local bagasse
• 100% biomass plant – imported biomass
• 100% biomass plant – mix of local bagasse and imported biomass
• Each of the alternative options identified and analyzed

In addition to these scenarios, K&M will run sensitivities on the power plant’s capacity factor, including 55%, 70%, and 90%.

Aqualectra is facing increased load growth and has recently retired its gas turbine unit, GT2, making it difficult for Aqualectra to meet peak demand. As a result, Aqualectra is requesting proposals for temporary power solutions to meet the growing demand in 2024 and 2025. The contract for temporary power would last approximately two years, starting around May 2024. Aqualectra requested K&M’s commercial and technical advisory services to determine the least-cost configuration of capacity and electricity from the temporary power units generating assets and the CRU gas turbine.

K&M discussed the scenarios and sensitivities that would be most informative to analyze with Aqualectra. Using the agreed-upon scenarios, K&M adapted its existing generation and cost models for Aqualectra to perform the temporary power analysis. K&M ran and analyzed the models and presented the results, including the levelized cost of electricity (LCOE) of the temporary power scenarios, the recommended configuration of the temporary power, the hourly dispatch of the generation assets, and all assumptions used in the analysis.

Fogging System Analysis

SEPCO has indicated the power grid in Jordan has had difficulty covering peak loads observed during high-temperature periods. As a result, SEPCO has reviewed potential solutions for its Samra Power Plant to increase power plant generation during these peak periods.

SEPCO intent is to modify all seven gas turbines installed at the Samra Power Plant by installing a fogging system in the gas turbine inlet. This modification aims to increase plant power generation to help the power grid cover the peak loads during high-temperature periods. To evaluate the technical and commercial viability of the fogging system installation, SEPCO engaged K&M Advisors to review the design of generating units’ and auxiliary equipment and systems to evaluate their ability to support the increased power output during fogging system operation.

The purpose of this study is to:

• Verify whether existing auxiliary equipment of each of the phases is capable of supporting facility operation with the fogging systems, and
• Determine the demineralized water demand required for the fogging system.

Fogging System RFP Development

Once the technical viability of implementing the fogging system has been confirmed, SEPCO will need to develop an RFP for suppliers to submit their proposal for design that meets the requirements of applicable standards and good engineering practice. K&M will develop the RFP documentation for suppliers to ensure that the design of the system is adequate and technically sound.

Fogging System Analysis

K&M developed GateCycle models of combined cycle plants to calculate 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 impacting operation of HRSG, steam turbine, ACC, and other auxiliary equipment that could be impacted by the fogging system. To analyze the demineralized system requirements, K&M calculated the fogging system demineralized water requirements and the total daily demineralized water demand and compared it with the demineralized water system capacity. We evaluated whether there is a deficit of demineralized water with fogging system operation and suggested the required additional demineralized water system capacity.

Fogging System RFP Development

K&M will assist SEPCO in developing the fogging system RFP. The RFP document prepared by K&M will include instructions to bidders, functional technical specification including the scope of supply and services and general technical requirements, and forms to be submitted by bidders. It is expected that the draft supply contract will be prepared to be included in the RFP will be based on the standard SEPCO’s supply contract, so no draft contract preparation is included in K&M’s scope. SEPCO will provide K&M with any available technical and commercial information received to date from the prospective fogging system suppliers.

In accordance with the provisions of Article 15.1 of the BirAllah Exploration and Production Contract between bp and the Ministry of Petroleum, Mines and Energy of Mauritania (MPME), a collaborative examination must be carried out by the MPME and bp. The purpose of this examination is to evaluate the local natural gas (gas) outlets and the associated infrastructure for Mauritania’s possible domestic gas market.

The MPME made a formal request for phase 1 considerations of the BirAllah gas development project (the “BirAllah Project”), specifically for a supply of 105 million standard cubic feet per day (MMscfd) intended for the local market. A segment of this gas is planned to be transported to a 500 MW power plant, which is slated for construction in the Ndiago region, the same area where the onshore facilities of the BirAllah Project are proposed to be established.

K&M Advisors (“K&M”) was engaged by bp to conduct the evaluation subsequently referred to as the Joint Gas Market Study for the BirAllah Project (the “Study”). This evaluation will utilize the Mauritanian Gas Master Plan (the “Gas Master Plan”), previously conducted by EPCM, as part of the foundational framework. The primary objective of the Study is to reevaluate the local and international gas outlets in alignment with the resources made available by the BirAllah and GTA projects, before outlining a roadmap and assessing the impact of the BirAllah Project implementation.

The primary objectives of this work are to (i) provide an assessment of the feasibility and volumes of BirAllah gas that could be supplied to domestic power generation and mining demand as potential outlets, (ii) to present an assessment of other potential outlets to determine feasibility and their suitability to be supplied by BirAllah gas or otherwise, and (iii) to provide an initial overview of aspects of the global LNG market relevant for the potential to export BirAllah gas internationally. As part of the scope, K&M reviewed the following potential outlets:

• Power Sector:
  • Use Gas Master Plan and other sources to understand expected role of 500MW power plant
  • Analyze historic electricity demand and supply balance, types and costs of existing generation plants, and demand and supply forecast for the next 20 years—using data provided by the client, including size and timing of gas-fired capacity additions that are economically justified
  • Use inputs from analysis to determine dispatch and volumes (quantity) of gas needed for 500 MW power plant
  • Determine the major facilities necessary to supply gas to new gas-fired power plants for these sales, including pipelines, transmission lines, etc. This will include a high level analysis of interconnection options and cost estimates (CAPEX) for major components.
  • Estimate cost of delivered gas to the end users broken down by component (as feasible), and levelized cost of electricity. Client to provide cost of delivered and treated gas onshore (in $/MMBtu), to be treated as a key input.
  • Develop high level implementation schedule
• Gas to Mining:
  • Determine the potential demand from existing mining operations (including for power generation and substituting diesel for LNG as fuel for mining hauling trucks).
  • Identify location, fuel consumption, type of fuel used, and type of fuel-consuming equipment for a select group of the largest mines in the country—using data provided by the client
  • Identify the least-cost logistics solution to deliver gas/LNG to each mine and estimate the cost of converting to gas existing equipment and gas demand after conversion
  • Compare the cost of delivered gas to the cost of existing fuel and aggregate gas demand for those mines with a cost of gas below the cost of existing fuel.
  • Develop high level implementation schedule
• Gas for Transport:
  • Estimate existing fuel demand for different types of marine and road transport (trucks, buses, cars, etc.)—using data to be supplied by the client
  • Using CNG penetration rates in other emerging markets with indigenous gas resources, estimate the gas demand required to supply a potential CNG market in Mauritania
  • Using CNG distribution costs and the cost of converting vehicles to CNG, estimate the total cost of ownership of CNG -operated vehicles and compare to the cost with existing fuels
  • Develop high level implementation schedule
• LPG and Condensate:
  • Estimate existing LPG and condensate demand (location, volumes, types of uses)—using data provided by the client
  • Identify other fuels/products that could be displaced if LPG or condensate were more widely available in Mauritania
  • Perform high-level assessment of the infrastructure required to produce and distribute LPG and condensates
  • Estimate the delivered cost of these two products and determine if they are competitive with existing LPG and Condensate prices in Mauritania and of the displaced fuels
  • Develop high level implementation schedule

The study must consider, among the Mauritanian gas master plan outlets, those that are feasible with regard to the Bir Allah project (Gas to industries, Phosphate fertilizer, etc)

FortisTCI plans to increase the amount of electricity generated with solar PV that it uses to supply its customers in TCI. K&M has been engaged by FortisTCI to develop a robust estimate of the amount of electricity that can be generated with solar PV systems that are economically feasible in TCI. This will inform: (i) the targets FortisTCI sets for generating electricity with renewable energy (RE); and (ii) the energy and capacity FortisTCI will need from other sources, such as natural gas, to reliably meet the demand from its customers. As part of an initial assessment of solar PV on TCI, K&M will conduct a review of the existing GIS data and other relevant information, conduct site visits to Provo, North Caicos, Middle Caicos, South Caicos, Gran Turk, and Salt Cay, and will develop a dynamic financial model for solar PV. This will inform FortisTCI on the total amount of land available that can be used to install utility-scale solar PV systems, the total amount of electricity that can be generated with economically feasible solar PV systems, and the average levelized cost of electricity (LCOE) generated with economically feasible systems.

In this assignment, K&M holds several key responsibilities. Firstly, they are tasked with conducting a comprehensive review of the existing Geographic Information System (GIS) data and other pertinent information. Secondly, K&M is required to carry out site visits to multiple locations, including Provo, North Caicos, Middle Caicos, South Caicos, Gran Turk, and Salt Cay. Additionally, a pivotal aspect of their role is the development of a dynamic financial model tailored for solar photovoltaic (PV) systems. This model will serve to inform FortisTCI about crucial factors, such as the total available land for utility-scale solar PV installations, the potential electricity generation capacity of economically viable solar PV systems, and the average Levelized Cost of Electricity (LCOE) associated with electricity produced from these economically feasible systems. These responsibilities collectively contribute to the strategic planning and decision-making process regarding solar PV initiatives.

Utilities Aruba is undertaking several transformational initiatives to decarbonize the energy and water sectors in Aruba. These initiatives include a proposal to create a Hydrogen Valley where energy from a new solar PV facility would power the grid and produce green hydrogen for local uses and eventually for export. Green hydrogen would be used to power fuel-cells in buses, taxis, port and airport vehicles, hotels, and public buildings. The green hydrogen would also be blended with natural gas to power reciprocating engines that supply power to the grid.

K&M will conduct economic modeling of the solar PV plus green hydrogen project proposed to understand its impact on the energy cost to Arubans. K&M will also perform independent due diligence on the technology proposed. K&M will provide assistance exploring and applying for capital grants that could reduce the solar PV + green hydrogen project’s costs. The economic modeling work will also estimate the grant amounts required to make the cost of the green hydrogen project competitive with the alternative options.

A large renewable energy developer engaged K&M to provide strategic, market, and regulatory services to support its preparation in submitting an initial non-binding expression of interest to invest a minimum of US$50 million of equity in facilitating the growth of a battery energy storage solution provider and technology company that combines its proprietary software with end-to-end project delivery for C&I and generation customers across Latin America.

As part of the project, K&M completed the following tasks:

• Review relevant materials provided in the data room for Round 1 and recommend clarification questions for the sell-side advisors
• Provide quantitative and strategic analysis and participate in discussions designed to reach a decision regarding participation in the investment process. The analysis was focused on the attractiveness of core markets, the attractiveness of other selected markets, regulatory changes and risks, assessing and commenting on key investment criteria, identification of any key critical commercial and regulatory market risks and opportunities with respect to target markets, pillars for growth and uses of funds, and review of relevant technologies.

Review and comment on the sell-side financial model, with expected targeted returns from an investment in the company and targeted return and valuation for the AssetCo business model.