Combined cycle power plant

Combined cycle power plant

by Alessandro Di Gioia

About project and Scope.

The project consists of the construction and operation of a new combined cycle gas fired power generation plant, including the production of heat for district heating.

The scope

Our customer, a sizeable public multi-utility company, was granted the right to take a financial and industrial participation in the project, that was promoted by a subsidiary of a major oil & gas company and that was carrying a significant goodwill value.

Our customer wanted to be assisted in the negotiations aimed at finalizing a potentially good deal.

combined cycle project

Our Approach.

We made a detailed evaluation of the capital expenditures of the project and made an estimate of the net heat and power production of the plant and of the operating costs.

We also made a market assessment aimed at predicting the cost of natural gas and the price of electric power in the lifetime period of the project, in order to develop a solid business plan.

All the evaluations were assisted by a risk assessment using the Montecarlo method, in order to evaluate the probability of the project to achieve the target profitability.

Business plan for combined cycle project

The negotiations with the Developer

We assisted our customer in the finalization of the following agreements:

  • Joint Venture and stock purchase agreement
  • tolling agreement between the the Joint Venture company and the supplier of natural gas
  • sales-purchase agreement for the supply of electric power
  • sales-purchase agreement for the supply of heat.

The agreements were positively finalized and the project has so far produced a positive outcome for the shareholders.