How do you develop an energy generation plan that balances sustainability with commercial due diligence?
A major data centre provider had a plan to develop solar and gas power generation assets at one of their largest UK sites – delivering it demanded a major rethink of their energy strategy.
To provide commercial due diligence on the asset valuations, the company turned to Baringa. We were keen to reflect the client’s wider corporate sustainability strategy, which focused on limiting carbon emissions.
This meant taking multiple options into consideration, from optimising the running of the existing gas engine to assessing the potential for offsetting gas fuel with bio-methane certificates.
We performed detailed asset valuation and financial modelling
Our team quickly mobilised to map out the issue and assets in question. We looked at the financial impact of developing solar and gas generation assets. By taking a deep dive into where the market stood and projecting future price increases, we were able to provide a comprehensive retail price forecast. This allowed us to generate detailed asset modelling tools and financial models.
Next, we used those tools to develop a strategic narrative, reconciling the economic benefit of developing solar and gas assets with the need to limit carbon emissions. This also meant performing a detailed carbon emissions analysis of the data centre’s existing gas engine.
Running a thorough risk analysis, shaping a sound strategy
After completing the asset valuations and carbon emissions analysis, we turned our attention to outlining the risks and possibilities associated with the different asset options.
Returns were weighed to risk, with the gas engine at the heart of our asset risk analysis. With this, we developed a deep understanding of the different power generation assets – providing the foundation we needed to design the commercial power purchase agreement (PPA) structures.
Our final step was to provide the company with PPAs covering sale and delivery of power to their data centre site, aligning closely with their wider corporate sustainability strategy.
The Baringa team have brought critical expert insight to our energy strategy. They are helping us to realise strategic ambitions we have as a business, and opened the door to transformational energy opportunities truly unique to our firm. Their insight and flexibility has been really important to us in turning ideas into deliverable opportunities
Director of Energy and Sustainability
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