PERSPECTIVES

Thorndike Landing, LLC is a management consulting firm specializing in financial, market and transaction-related services for the energy industry. Over the years, our team has been retained to perform a wide variety of special studies. Here is a sampling of the types of studies, some for strategy development, market assessment and trading, others for litigation support and testimony:

Fundamental Forecasts for Battery Storage Assets:

Clearly an asset type whose time has come, there are nonetheless questions on how to safely deploy capital in this field. With the opening of the RegD market, PJM has offered significant revenue opportunities, but other areas in the country with more renewable penetration are catching on.

The DG Solar Rate Question – Neither Side Is Right:

Is a rooftop solar MWh worth the full retail rate? In many circumstances: no, and net metering should reflect that. But it is clearly worth more than the wholesale price. Why that is the case and how ratemaking can adapt to deliver certainty for utilities, solar providers, and customers was the subject of this study for an industry participant.

ERCOT – Fundamental Price Forecasts Continue to Be Volatile:

The decision to forego a capacity market has, for now, worked out well for customers, and disastrous for generators. Even with major coal retirements around the corner, this market still needs strong summers to be profitable. If anything, this market has demonstrated that a rubberstamped forecast can really come back to haunt you.

Demand Growth in Texas and Alberta:

This short study looked at the immediate effects of the drastic E&P slowdown in two prolific oil and gas states and provinces: AESO and ERCOT. We looked at how hourly load is being affected since the 2015 ramp downs in both places, and how it will impact wholesale prices.

The Continued Case for PJM Combined Cycles on the Shale:

How much is enough? How far off is the overbuild? This work showed significant potential for more conversion capacity, especially given the surprising performance of some Utica wells. Yes, there is a risk, and, no, some of the current hedges will not protect you.

Marcellus Basis Collapse – Is It for Real:

On the surface, there is a great case to be made for Marcellus prices to normalize towards Henry Hub: new pipe in the ground, lower production parameters, and increasing direct use. However, the overall numbers make this conclusion much less certain. We looked at basis for one of the new PJM CC’s

Perspectives on Wind Generation Industry:

This study assessed valuations, regulatory initiatives, & players along the supply cycle, transaction market, macroeconomic drivers, and the value creation at each stage of development.

Projection of Renewable Energy Credits:

This study projected REC's in a burgeoning market and correlated them to power prices to project future revenue and financeability of a renewable business.

Hourly Wind and its Impact on Prices and Curtailment:

Curtailment, absent from ERCOT for few years, is starting to manifest itself not just there, but in many other pockets around the country. With this set of studies, we are quantifying pricing and production impacts.

Distributed Generation Opportunities – Back for its Third Round:

With the general increase of fixed cost charges customers see, be that from large utility baseload generation projects, transmission buildout, or just plain ratemaking moves, C&I’s are looking, again, at peak shaving and baseload CHP. This study was concerned with long range retail rate forecasts for several states, with interesting disconnects to be seen between wholesale and retail prices.

Re-contracting Older IPP’s and their Capacity Value:

With many first generation QF facilities still running well, albeit at now less competitive heatrates, what happens when contracts expire? Some are clearly scrap, but many former QF’s will have useful lives as mid-merit or at least capacity resources. We project revenue potentials with our fundamental models and derive potential counterparties for some of these plants – used in the course of refinancings and equity investments.

Refueling, not Repowering Coal:

Many obsolete coal boilers are close to coal fields, which, often, puts them right on top of inexpensive natural gas. Minimal investment is creating valuable capacity resources that, in many cases, even have energy revenues to rely on. Payback times are surprisingly short, and this strategy will figure nicely into many states’ Clean Power Plan compliance scenarios.

GenOn Model:

An ongoing quest to derive the value of the business behind the various GenOn bonds. Generation units are forecasted bottom-up using fundamental energy and capacity model runs. The investment decision remains with the client…

Bankruptcy Assessment:

Evaluated the then-current status of bankruptcy proceedings of a generation business, assessed the likelihood of emergence based on both market/creditor sentiment and estimated debt-to-asset values and estimated approximate timing of emergence.

Yieldco Models

NRG Yield, Terraform, Abengoa, Pattern, Nextera – these yieldco’s have lent themselves to bottom-up, PPA level modeling. Production matters, and we track it on a monthly basis. Minute PPA terms can make the difference. Ivanpah is not the only one.