Our renewable energy economic analysis provides the quantitative justification for the adoption and growth of renewable energy technologies.
Our work on the economic impacts of renewable energy helps you understand the benefits at a national and local level. Offshore renewables in particular provide a unique opportunity to stimulate economic development in regions that suffer from long-term decline in their traditional industries. We have led the way in establishing robust methods for quantifying local content and employment benefits.
Our market leading approach to modelling the levelised cost of energy has helped the renewable energy industry tell a coherent, long-term story of how it can become the most cost effective source of new electricity generation. It also helps individual players to articulate the benefits of their market offerings and enable R&D leaders to focus on the areas of greatest opportunity for cost reduction.
Our insight from this work has made us the leading player in the production of offshore wind supply chain plans for UK projects. We have helped project developers and their suppliers document clearly how they contribute to the sustainability of the offshore wind supply chain. We help project developers and their key suppliers to engage with the local supply chain.
We also inform policy development at a national and regional level by analysing its impact on factors such as market growth, RD&D and manufacturing investment, competition and cost of energy reduction.
Levelised cost of energy (LCOE) is a good way to compare generically the costs of energy from different energy systems and the impact of different innovations. It is a key tool for decision makers in renewable energy economics. There are five main levers that determine the LCOE:
- Energy production. Increasing this is a powerful way to drive down LCOE.
- Capital cost (CAPEX). Typically, along with related finance cost, it contributes 65-85% of lifetime cost.
- Operating cost (OPEX). Typically in renewables, it contributes the remaining 15-35% of lifetime cost.
- Lifetime. A longer operating life reduces LCOE by spreading the capital cost across more years.
- Finance cost (or weighted average cost of capital (WACC)). Reducing risk reduces the cost of finance. Removing the cost of finance (0% WACC) would halve the LCOE.
We have been at the heart of modelling levelised cost of energy for offshore wind and other energy systems for almost a decade. We deliver landmark analyses, reports and LCOE tools for governments and a wide range of enabling bodies. Much of this work stemmed from our ground-breaking “Offshore wind cost reduction pathways: Technology work stream” study for The Crown Estate, the first (and still the deepest) pan-industry exploration of future cost of energy in offshore wind.
We also deliver strategic LCOE analysis looking many years ahead for major developers and energy companies, taking into account new technologies (such as floating foundations) and supply chain effects (such as large project pipelines).
Our analysis of the spatial variation of LCOE across multiple national waters, coupled with merit order modelling addresses challenging questions, such as where to develop projects, and the future market for new technologies.
Our analyses of the LCOE impact of specific innovations successfully guides technology suppliers and investors in areas as diverse as installation processes, offshore foundations, condition monitoring technology, advanced blade designs, new wind turbine concepts and airborne wind systems.
Our approach is now the industry standard, and is used by BEIS (formerly DECC), Energy Technologies Institute, Innovate UK, ORE Catapult, in France and USA for offshore wind, and by KIC InnoEnergy for onshore and offshore wind, solar power (PV and STEG) and other technologies.
We provide renewable energy economics analysis of gross value added (GVA) and job creation for:
- The complete lifecycle of projects, making assessments before and after construction
- Individual companies under a range of commercial scenarios
- Whole industries, in given countries or globally.
Our detailed and robust methodology is founded on a deep understanding of the renewable energy supply chain, rather than relying on crude multipliers from other sectors. It has been developed and refined in discussion with our network of academic economists.
Our local content methodology captures only the value added by a given country or region, so you can use results as a direct input to our economic impact analysis. This enables provision of a self-consistent picture covering a wide range of economic impacts of renewable energy projects.
We are the leading consultancy for wind and marine renewable energy supply chain analysis and development. By providing these to both the public and private sectors, we help to accelerate progress towards regional and national renewable energy targets and the resulting job and wealth creation.
Our work for governments and enabling bodies across the world shapes and helps to deliver on their strategies to support the supply chain and incentivise innovation and investment. Many of our reports are valuable reading for new and established companies in the sector.
For suppliers, we advise on policy for renewable energy deployment and provide business development support for companies entering the industry or expanding their interests in the sector.
For purchasers, we advise on supply chain strategy for different areas of supply, recognising different market dynamics, lead times and levels of integration of design and supply.
Using our wide network and understanding of both technology and market environment, we provide you with decisive input on both strategic and tactical levels.
We provide market analysis, forecasting, cost modelling, sector understanding and economic impact assessment to inform industrial and R&D policy. We also model the impact of policy on industrial growth and cost of energy reduction, both at a national and regional level.
Working at arm’s length and in a secondment capacity, we play an important role accelerating the dialogue between governments, and industry, especially with regard to manufacturing and port infrastructure investment.
We provide thought leadership in policy through publications and analyses built on robust evidence bases.
We also break down barriers to deployment through supply chain gap analyses and other high-profile public reports.
We played a pivotal role in developing a robust methodology for measuring local content that is fair and robust while limiting the burden on the supply chain. Our approach has been adopted by the UK Government and wind industry, through the Offshore Wind Industry Council. The methodology has a huge potential for application to other energy sectors and to other countries.
We also provide:
- Support gathering and reporting local content
- Modelling of local content scenarios based on our understanding of the renewable energy landscape
- Advice and practical support for increasing local content, including through supplier engagement, filtering and events.
When clients want to do new things and solve tough problems, we are often asked to develop models to explore the solution space and advise on ways forward. We model in Excel and Python code, covering a wide range of financial, technical, market and economic applications. We work spatially (using GIS data) and temporally (looking a fair distance into the future) and hold the IP related to our modelling tools.
Not only do we work in the conventional renewables space, we also work with new technologies, such as offshore wind floating foundations and potential disruptors such as airborne wind.
We use our advanced modelling capability to support investments, define business strategy, and shape policy decisions.
We have developed methods for market and cost forecasting, taking into account technology, market, geographical, finance and other effects, looking on a project-by-project basis and at the national and global level. We deliver:
- Market forecasts, including of technology choices
- Analysis of total, addressable and obtainable markets
- Demand and supply analyses
- Cost of energy studies.