A leading player in the alcoholic beverage sector had ambitious production expansion plans for the next decade and sought to develop a strategy for investing in the energy infrastructure required to provide competitive, secure and sustainable energy supplies that would facilitate the expected production volumes. Key considerations were the uncertainty regarding future gas and electricity prices over the planning time frame, physical constraints imposed by the existing energy infrastructure and operations at the site, a proposed large-scale, third-party asset investment at the site, high opportunity costs associated with certain options and sustainability criteria.
Byrne Ó Cléirigh was engaged to evaluate these and other factors and inform the decision making process. Our work included:
- Development of energy demand and energy price projections over a ten year period.
- Identification and definition of seven strategic energy investment options for the site. Some options entailed optimising existing assets, others involved expanding additional capacity, while others still entailed embracing new and renewable technology options to exploit new revenue streams. The sustainable energy technologies considered included biomass, CHP and solar photovoltaic (PV).
- Development of capital and operation and maintenance cost estimates for each option and development of an investment appraisal model incorporating a discounted cash-flow analysis of the capital and operational income and expenditure associated with each.
- Identification and quantification of the key sensitivities for the options.
- Assessment of the strategic advantages, drawbacks and risk factors associated with each option.
- Assessment of the carbon footprint and sustainability of each option.
We identified a number of preferred options and made recommendations for how they could be progressed and how the risk factors associated with them could be better understood and managed.