Gas to Power: Business Fundamentals and Developing an IPP Project

This workshop provides international oil, gas, and power professionals with an overview of the international gas-to-power business and the opportunity to develop, with the guidance of excellent instructors and a challenging leaning simulation workshop, an IPP project in a West African developing country. After introductory lecturers on gas and power industry fundamentals the focus turns to gas supply options, including pipeline and LNG imports, and then proceeds to the key development needs of combined-cycle gas turbine power plants (CCGT), including the project management process from screening to operation, plant technology, siting, transmission, long and short term gas supply and power purchase agreements, permitting, project equity and debt financing, regulatory issues and rate setting methods, market liberalization, carbon emissions and the impact of competing alternative energy projects.

Additional information

Program Type

Key Benefits

  • Gain a solid appreciation of the international gas and power business fundamentals;
  • Learn the various sources and quality of natural gas, including LNG imports, and their competitive market prices;
  • Be able to describe the components and operating cycle of a combined-cycle power plant and why they are so efficient;
  • Learn the commercial aspects of CCGT projects, how they are developed and managed through a complete life cycle;
  • Gain an understanding of the legal agreements, sources of capital, regulatory compliance, markets for power and economic aspects of energy project development.
  • Learn how to work as a team to collect and analyse data, make project decisions and present results.
  • Appreciate the competing cost and value of alternative energy sources of power.

Who Should Attend

This program is designed for professionals from diverse backgrounds, who seek a comprehensive understanding of gasfired power plants and how the high efficiency of these plants and the availability of imported LNG or gas pipeline offer an ideal combination for countries who are seeking solutions to todays rapidly expanding power business.

Instructional Format

The instructional format consists of lectures by our very experienced faculty and team participation in our challenging power project business game. This unique design is the reason why IHRDC programs are consistently rated as the best in the industry today. The business game typically takes almost one half of the instruction time and has been highly rated by past participants for its effectiveness in internalizing learning and generating discussion among team participants. This combination of lectures and interactive workshop sessions has proven to be an ideal way for participants to learn the practical needs of todays international energy markets.

Program Location and Schedule

The program will begin on Monday morning and end on Friday afternoon. Participants may be asked to stay later in the evening to do workshop sessions.

Program Content

Power Industry Introduction

Power Industry Structure, Terminology and Units; Overview of the Electric Power Industry; Including Trends in Market Liberalization and Privatization of Assets.

Gas Market Analysis and Pricing

Structure of the gas value chain; regional gas markets in key world markets; analysis of gas market opportunities; five major gas pricing formulations.

Gas Production and Pipeline Systems

Gas field reserves, gas quality, field deliverability profile including swing; gas pipeline networks; pipeline and compressor design; capital costs; regulation and typical tariff; firm, interruptible and spot contracts; major contract terms; daily operations and nomination. Case studies.

LNG Supply and Imports: Liquefaction, Transportation, and Receiving Terminals

LNG value chain: supply, transportation, receiving terminals; key LNG measures, conversion and worldwide market; liquefaction cycle; supply options, long-term, spot contracts liquefy your own natural gas; receiving terminal design options and operation to meet power plant needs; annual nominations to meet power plant needs.

Overview of the Electric Power Industry Liberalization

Structure of a typical power value chain; models for management and regulation; markets and load profiles in various regions of the world; regulation of the industry with examples in developed and lesser developed countries; power supply, demand and pricing in various regions of the world; history of market liberalization In North America and the UK.

Introduction to Power Generation and Combined Cycle Gas Turbine Plants

Power Generation Fundamentals, Power Plant Terminology, Power Plant Thermal Efficiencies, Combined Cycle Gas Turbine Power Plants: Technology and Costs.

Overview of Other Forms of Power Generation

Coal and Oil-Fired Steam Turbines; Hydroelectric Plants; Nuclear Power Plants; Renewables.

Independent Power Projects Major Players

Identifying the key players in the project: Developers, Suppliers, Customers; Partners; Manufacturers, EPC Contractors, Regulators, Financiers.

Overview of Transmission and Distribution

Technology and Costs; 50/60 Hz; Synchronization of Plant to Grid; Instabilities; Relationship of Power Generation Costs to Price to Consumer; Economic Trade-off: Gas-by-Pipe or Electricity-by-Wire; Distribution of Electricity

Power Project Investment Screening, Selection and Project Development

Project Feasibility; Project Design and Development – Getting the Process Right; Project Economics; Legal and Regulatory Issues; Financing Structure; Risk Mitigation; Project Management Structure: Agreement Linkages, Project Development Phase Activities; Management of Construction and Operations; Typical Project Screening Process.

Least Cost Dispatching, Operation of Power Pools and Electricity Trading

What is a Power Pool? Power Pool Economics and Structure; U.K. Power Pool; Nordic Market and Electricity Trading; What is an ISO? U.S. Power Pools, NEPOOL.

Merchant Power Plants

Definition; Financial Viability; Projecting Market Demand and Supply; Merchant Plants Financing; U.S. and the U.K. Merchant Plant example.

Financing Energy Projects

Traditional vs Project Financing Fundamentals; Creditworthiness; Sources of Equity and Debt; Bilateral and Multilateral Financing; Investment Guarantees; Structuring and closing on debt and equity Financing.

Green House Gases and Their Impact on the Power Industry

Calculating CO2 emissions from power plants; regional and international growth of greenhouse gas emissions in the world; Carbon trading as an incentive to reduce – how do they work; the Paris Accords; Sustainability targets in various countries.

Global Power Trends and Rgional Markets

World Energy Trends; Projected global capacity growth trends; Investment and infrastructure trends; Energy efficiency targets; Government incentives; Optimization of generation portfolio; Smart grids.

Workshop

Power Business Learning Simulation

The Power Business Learning Simulations allows teams of participants to plan and build a 275 MW combined-cycle power plant, under a BOT arrangement, in a fictitious country in West Africa. Each team is asked to prepare and Implement a business plan for the project which includes identifying the best course of gas (LNG or pipeline imports) and confirming project fundamentals including market assessment, technical design, fuel supply and power purchase contracts, equity and debt financing, government guarantees, environmental assessment, risk analysis, obtaining regulatory approval, permitting and negotiating the EPC and O&M agreements. Once constructed the teams operate the plant until its transfer to the government. During this operating period they are also offered the opportunity to build a parallel and sell power into a competitive market. On the final day each team summarizes its decisions and presents Its financial results and he team with the best performance receives the workshop prize.

The sessions include:

  • Project Description, Gas Supply Analysis & Options
  • Project Fundamentals and Market Analysis
  • Project Economics and Proforma Analysis
  • Negotiating GSA, PPA and EPC Agreements
  • Negotiating Equity and Project Economics Arrangements
  • Securing Government Guarantees and Permits
  • Initial Power Plant Development Decision
  • Evaluation of New Capacity Additions
  • Fifth Year Development Decisions
  • Bilateral Contract Bidding & Power Pool Bids
  • Evaluation of Performance & Presentation of Results