Examples of Work

IES has undertaken electricity market studies in electricity markets that include the Australian NEM, Western Australian SWIS, Singapore NEMS, Philippines WESM, and Vietnam.  Studies include generation, transmission, retail, spot and contract price dynamics, physical and financial outcomes and implementing risk capabilities.

Australia (National Electricity Market)

Examples of work IES and IES consultants have undertaken in the NEM include:

IES has undertaken energy planning studies for the purpose of informing policy development for Governments and other interested groups. For this purpose IES maintains a modelling capability based on the MARKAL / TIMES framework. IES has developed an Integrated Energy Model (IEM) for Australia which presently includes representations of the electricity and natural gas components of the energy sector. The IEM has been used recently in work undertaken for the Department of Resource Energy and Tourism (DRET) of the Australian Government, Australian Energy Market Operator (AEMO), Australian Energy Market Commission (AEMC), and National Generators Forum (NGF).

IES has undertaken Mergers and Acquisition work over many years.  This has involved work for both the buyer and seller sides on all the types of plant in the market (based load coal generation, intermediate and peaking gas generation, hydro generation, wind generation, transmission etc).  IES has advised on many of the transactions that have occurred in the Australian power sector.  IES has advised major international and Australian energy corporations and investment banks.

IES has undertaken market studies on NEM issues.  Depending on specific client requirements these studies provide analysis of past market outcomes and market projections on the basis of defined scenarios and assumptions. Projections are based on the use of the IES market simulation model PROPHET and national and regional energy models based on the MARKAL / TIMES framework. 

Recent work includes:

• A large study for the National Generators Forum on the transition path to a lower carbon economy.
• Studies for AEMO associated with the development of the 2010 National Transmission Network Develop Plan (NTNDP).

IES has undertaken studies on the development and projection of renewable energy prices.  Recent work includes:

• A study for the Clean Energy Council (CEC) on the proposed expanded MRET rules and their consequences.
• A study for the Office of the Renewable Energy Regulator (ORER) on the reasons for the decrease in REC process in early 2010.
• Many studies for clients on the RET and projected REC prices.

IES has undertaken studies to support regulatory work.  This includes:

• A comprehensive study into metering strategies and the requirements associated with the last tranche of retail deregulation in the Australian electricity market.
• Study for the AEMC on the impact of regulatory frameworks on transmission investment.
• Market power consequences of various arrangements. 

IES has been central to the reforms undertaken in the Victorian and national markets.  IES provides assistance to regulators and businesses subject to regulation in a number of matters including the provision of advice on market power issues, the form of price regulation, the application and development of regulatory investment tests, and the determination of wholesale energy allowances in retail energy price regulation.  This includes:

• From late 1993, IES was part of the core team that implemented the Victorian electricity industry reforms including market rules, vesting contracts, risk assessment.  IES also undertook studies on the need for interval metering and working of the capacity elements of the market.
• IES staff have been involved in writing chapters of National Electricity Code (which covers matters concerned with market spot price and dispatch rules).  IES was also the lead consultant in the development of the ancillary services arrangements in the NEM.

IES has undertaken studies to assist with Commercial Due Diligence.  Apart from being retained to provide electricity market price projections relevant to the earnings prospects of the target assets, IES also gets involved in commercial contract review and valuation.  This includes:

• IES has provided due diligence assistance to many organisations and in many electricity markets.  IES is well acquainted with the processes and issues that can arise during this sort of exercise and the response times and communication / explanation requirements.   IES has undertaken due diligence in all the electricity markets it operates in.  In these markets the assets IES provided advice on include new and old coal plant, CCGT, OCGT, cogeneration, wind generation, hydro generation, small plant providing transmission support services. 

IES has acted as expert witness and provided assistance with disputes based on its knowledge of energy markets in a number of matters including the dispatch of generating plant by market and system operators, revenue sharing arrangements between hydro-electric power generators and water authorities, and the potential for relocation of gas-fired generators.  This includes:

• IES staff brings a large variety of expertise in the dynamics and implications of policy to electricity markets, the mechanics of operating electricity markets and consequences of market operation errors, transmission planning and so on.
• A number of IES staff has undertaken expert witness work in a variety of issues such as the economic consequences of plant failure or market operator error, long run marginal costs in the market, and the economics of government policy such as the CPRS.  The services IES has performed include written statements and appearances arbitration / court.

Western Australia (Western Australia Electricity Market)

IES has been undertaking work associated with the Western Australian electricity market (know as either the SWIS or WEM) since before the market started.  This includes working with the former Western Power on market reform arrangements, and numerous studies on coal plant, CCGT and OCGT plant, and wind generation.  Examples of work undertaken include:

A senior IES person working within Western Power Corporation (WPC) on a variety of issues leading up to the market.  This and other work has had IES deal with issues that cover:

• Approach to modelling the proposed market being developed with WA.
• Vesting contract structure and impact to the generation unit of WPC.
• Projected market prices (capacity and energy).
• Economics of potential generation developments.
• Issues with renewable generation.
• Gas purchase issues.
• Using the IES market model PROPHET to gain insights into future market dynamics.

Since the WEM commenced undertaking numerous market study assignments for a variety of parties on issues such as:

• New wind generators.
• New peaking generators.
• New base load CCGT plant.
• Market dynamics and forward STEM prices.
• Training on the rules and operation of the SWIS.
• Long terms scenarios of the impact of climate change policies.

Philippines

IES has been active in the Philippines for the past 10 years, with an increased involvement since the commencement of the Wholesale Electricity Spot Market (WESM) in 2006.  IES has provided a wide range of services to energy companies that have an interest in the Philippines power industry.

Some examples include:

• Comprehensive Philippines Power Industry Review.  A detailed study covering the regulatory framework history of the WESM, of the Electricity Power Industry Reform Act (EPIRA), review of the PSALM asset sales process, review of the present industry structure, review of the existing generators, transmission system and demand side, review of the fuel suply options in the Philippines and developing perspectives and projections of how the industry may evolve over the next 10 years.
• Technical Audit of the Philippines Electricity Market Corporation Market Management Systems.  In conjunction with Deloitte, IES conducted a comprehensive technical audit of the market software systems, including the Market Dispatch Optimisation Model (MDOM) and the Billing and Settlement software systems.  IES also provided advice to PEMC on general areas of improvement that could be made to the electricity market overall. 

For further details on IES capability in Philippines refer to Philippines page.

Singapore

IES has undertaken a significant amount of work in relation to the National Electricity Market of Singapore (NEMS), particularly since the commencement of the NEMS in 2003.  IES has provided advice to the regulator, banks and private corporations that operate in the NEMS as well as those outside who are considering market entry.

• Singapore Power Market Studies to Facilitate Investment Decisions. Including reviews of the existing state of the NEMS, review of current and proposed policy as it pertains to the electricity and gas sectors, assessments of likely industry evolution and detailed simulations of the power market. These studies have been conducted for a variety of corporations, including: existing market participants considering expansion, corporations within Singapore considering market entry and corporations located outside Singapore considering market entry. 
• Singapore Power Industry Review. IES completed a detailed study covering the regulatory framework, development of the NEMS, review of the asset sales process outcomes, review of the present industry structure and performance of participants in the industry, review of the existing supply and demand situation, review of the primary fuel supply situation in Singapore and the ASEAN region. From this perspectives and projections have been developed on how the energy sector in Singapore may evolve over the medium term.
• Review of Policy and Proposed Changes to Market Rules. IES periodically provides independent assessments and advice to existing participants on existing market rules, changes to industry policy and proposed changes to the market rules.  

For further details on IES capability in Singapore refer to Singapore page.

Vietnam

IES has provided advice on the Vietnam energy and electricity sector since 2002. IES maintains an up to date understanding of Vietnam’s power industry, with particular attention on the electricity industry reforms process.  

• Development of a Methodology for Determining Benchmark Generation Prices. IES developed a framework and methodology for the Energy Regulating Authority of Vietnam (ERAV) to determine benchmark prices for different generation technology options. 
• Review of the Existing and Proposed IT Systems Design for the Vietnam Competitive Generation Market (VCGM). IES conducted a review of the existing IT software and hardware systems to support the operation of the Vietnam Competitive Generation Market (VCGM) for the Energy Regulating Authority of Vietnam (ERAV).
• Vietnam Electricity Industry Studies. For a number of confidential clients, IES has performed comprehensive reviews of the existing state of Vietnam’s power industry and reviewed current and proposed policy as it pertains to the electricity industry and the energy sector in general. To support this work, IES has conducted simulation studies of Vietnam’s electricity industry and undertaken assessments of the costs of different supply-side technology options in Vietnam. 

South Korea

IES has been active in South Korea, particularly in the last 3 years. We have provided advice to a number of clients on Korea’s energy sector and electricity market.  

• Review of electricity market historical outcomes, current industry structure and assessment of potential future outcomes;
• Provision of analytical support to clients to assist in the valuation of power industry assets; and
• Modelling of Korea’s power market to provide independent assessments and projections of electricity prices.

For further details on IES capability in South Korea refer to South Korea page

South East Asia

IES has undertaken a number of long term projects that have involved assessing both the electricity industries and energy sectors of countries within the ASEAN region and Asia in general.  This has been complemented with other work on the power sectors of these countries. 

• Detailed assessment of investment and trade barriers and opportunities for energy market integration in the East Asia Summit (EAS) region.  IES consultants engaged in detailed discussions and assessments of the status of electricity (and other energy sectors) with key government and commercial entities active in the energy industries of the 16 countries in the EAS including: Australia, Borneo, Cambodia, China, India, Indonesia, Japan, Korea, Laos, New Zealand, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.  The study included country-by country reviews on the status of the renewable energy sector in each of the studied countries and an overview of energy trade in the region in general.
• Long-term AusAID-funded co-operative project designed to raise the energy policy modelling skills for eight ASEAN countries. Through the period 2003 to 2006 IES provided the project management and technical skills for an AusAID-funded co-operative project focused on the ASEAN region designed to enhance the energy policy modelling skills for eight ASEAN countries: Indonesia, Malaysia, Thailand, Vietnam, the Philippines, Cambodia, Laos and Myanmar.  The project required IES to assist these countries to build an energy production, processing, transmission, distribution and consumption model database to allow energy policy options to be studied. The project lasted for nearly four years with successful completion in 2006. Country participants include government policy analysts and energy modellers, representatives of the major utilities and academics. The assessment of renewable energy and schemes attractive to the Kyoto Clean Development Mechanisms (CDM) were a key part of this program. 

For further details on IES capability in other Asian countries refer to Other Asian page.