LNG-to-Power Feasibility Study
The Government of Kenya intends to create a domestic natural gas market for power generation and industrial use with the aim to help diversify the country’s energy mix, improve energy security, reduce the cost of electricity and reduce greenhouse gas emissions. The primary objective of this project is to conduct a feasibility study for the development and operation of infrastructure for importation of liquefied natural gas, conversion of the existing HFO (MSD) Power Plants and development of a natural gas power generation plant.
KenGen contracted K&M to analyze the technical, financial, economic, environmental and social feasibility of the development and operation of infrastructure for importation of liquefied natural gas, conversion of the existing HFO (MSD) Power Plants and development of a natural gas power generation plant to determine what, if any, options would be optimal for natural gas power generation in Kenya. As part of the study, K&M will complete the following tasks:
- Evaluate indicative LNG demand and where the demand is located
- Identify the least-cost LNG import and logistics solution to meet the demand
- Develop a business case for LNG at the cost estimated
- Evaluate LNG supply & infrastructure procurement strategy
- Develop preferred procurement option and conduct financial, economic and value for money analysis
- Conduct technical assessment of feasibility to convert 10 existing power plants from HFO/diesel to LNG
- Develop conceptual design and cost estimates for plants to be converted
- Carry out financial viability analysis for plants to be converted
- Prepare implementation schedule and risk assessment for plants to be converted
- Conduct technical assessment of a greenfield gas power plant
- Develop conceptual design and cost estimates for greenfield gas power plant
- Assess preliminary environmental and social impact of greenfield gas power plant
- Carry out financial viability analysis for greenfield gas power plant
- Prepare implementation schedule and risk assessment for the greenfield gas power plant
Oserian Two Lakes Power’s (OLTP) geothermal power plant is an important part of Kenya’s renewable energy and climate change prevention strategy. OLTP engaged POWER Engineers for support in ensuring a total load of 8 MW can be provided to industrial clients at Oserian via a high-voltage interconnection to Kenya Power and Light Company’s (KPLC) 33 kV distribution grid located nearby to avoid short-term use of diesel generation while OLTP further develops its geothermal resources.
K&M was engaged by POWER Engineers on a project to support the development of a geothermal/solar hybrid industrial park in Naivasha, Kenya by providing an analysis of the requirements for interconnection of the industrial park to the national grid of Kenya to supply backup power. This project will provide technical assistance for the specification and design of a synchronized interconnection between the nearby 33kV KPLC line to the OTLP 11kV mini grid.
K&M’s scope of work includes:
- Assessing the commercial and economic viability of the KPLC interconnection and its impact on the cost of power to OTLP’s industrial clients
- Identifying the factors that influence the economics of the project and of combined power provision by both geothermal resources and the KPLC distribution grid
- Recommending an operating procedure for decision makers to choose between OTLP geothermal/solar and KPLC grid-provided power
As part of its scope of work, K&M will consider a range of technical options coupled with capital and operating expenditures (CAPEX, OPEX) to assess the economics of grid-supplied vs. geothermal-supplied electrical energy. K&M will incorporate factors such as KPLC time-of-use and bulk rate electricity tariffs, expected utilization characteristics of OTLP electrical load (timing, intensity, duration), and estimate investment and operational requirements to model and evaluate the project economics. K&M will identify factors that influence the economics of the project and evaluate their sensitivity and impact during fluctuations. Lastly, K&M will provide clear recommendations and operating procedures that identify when to use OTLP-provided geothermal power and when to use KPLC grid-provided power.
K&M will compare the two (2) options (OTLP or KPLC supplied energy) on the basis of the lowest cost per unit of electricity under standard assumptions and produce a Cost-Benefit Analysis for the project.
K&M was contracted to develop a business plan for a rooftop solar company in Jamaica. This business plan will provide accessible financing and savings on monthly electricity payments through leasing and hire purchase rooftop solar models to residential, commercial and industrial customers.
K&M was contracted by a development bank to provide a global market assessment on floating solar projects and the potential development of a pipeline of such projects. This market assessment will expand across Africa, Asia, Latin America, Europe and Central Asia, but will primarily identify key markets in Africa and Asia. K&M will also suggest potential business models for the floating storage projects.
K&M was hired to advise on the submission of a bid to build, own, and operate 1-2 large LNG terminals and a gas-fired combined cycle power plant in the Dominican Republic. K&M supported the planning and implementation of a comprehensive prequalification, reviewed the Request for Qualifications of Prequal documentation provided by the procuring entity identifying submission and qualification requirements and evaluating qualification criteria and methodology, and established a plan to collate all documentation, produce submission documentation, and successfully qualify for the proposal stage for both lots. K&M also submitted a Request for Information (RFI) and submission checklist, and drafted all documentation required.
K&M was hired by one of the industry’s leading integrated waste technologies solutions provider in the region. The client’s 10 MW Waste to Energy pilot project innovation is a first of its kind in Kenya. The project is based on three specific forms of biomass: municipal solid waste, agricultural crop residues and livestock waste or manure. The WtE pilot which is also phase 1 of the project will be located in Kibera, an informal settlement in Nairobi. This is a single line facility with a capacity of 300 tons per day, and a total of 100,000 tpa. For this pilot phase, the output will be biomethane and electricity. The expanded facility will have a capacity of 250,000 tpa and the outputs will be biomethane, ethanol and electricity. K&M Advisors will provide financial / commercial advisory services with the primary objectives of (i) raising the necessary funds to complete project development and (ii) successfully achieving project financial close for the pilot project.
K&M was contracted to assist a private client on the negotiation of the Regasified LNG Sale and Purchase Agreement (RLSPA). A draft version of the RLSPA was submitted to the client on March 31, 2021. In addition to the RLSPA, the LNG supplier proposed that the client and themselves enter into a Pipeline Interconnection Agreement (PIA) that will govern the construction of the pipeline from the LNG terminal to WEB’s battery limit. K&M will review and comment on the RLSPA and PIA.
Africa GreenCo has retained K&M Advisors to advise on the development of the company’s procurement procedures and policies. In Zambia, Africa GreenCo will act as an intermediary offtaker and service provider, purchasing power from renewable IPPs and selling that electricity to utilities and private sector offtakers (i.e. commercial and industrial users) as well as other markets of the Southern Africa Power Pool (SAPP). Therefore, Africa GreenCo must have procurement policies and processes that reinforce its role as a credible, independent party. K&M is working closely with Africa GreenCo to develop procurement policies, procedures and documents; and a due diligence and appraisal framework through which Africa GreenCo determines how, and from whom, it purchases and sells power. K&M will: • Review, assess, and recommend changes to existing documents regarding procurement
• Develop procurement policies and associated rules and procedures best suited to meeting the evolving needs of GreenCo
• Develop project appraisal and due diligence framework, including bid documents and associated templates
CUC is considering LNG as a new fuel for power generation. There are several LNG import solutions that Cayman could consider, and the majority of them are likely to result in a cost of fuel that is lower than diesel. However, before proceeding with the development of a specific solution, CUC wants to develop an LNG-to-Power strategy that considers all the technically viable LNG-to-Power options, and narrows the options to two or three that have the lowest costs, a manageable level of risk, and could be implemented in a reasonable timeframe.
IFC has retained K&M Advisors to set up and manage a virtual data room (VDR) platform for the Shire Valley Irrigation Project, for which is IFC assisting with the procurement of the O&M contract and negotiation of water purchase agreements with off-takers. K&M is working closely with IFC to set up, manage and monitor activity within the VDR to help facilitate timely communication and information sharing with the bidders.