RESS 1 Auction Our market advisory offer A milestone for the Irish renewables industry The forthcoming RESS 1 auction in Ireland is an important milestone in the renewables industry. With the ‘70 by 30’ target for 70% renewable electricity by 2030 now in place, there is the political and policy direction for a major new wave of investment in clean generation capacity in Ireland. Baringa has been at the forefront of renewable electricity investment advisory in Ireland for over a decade. We have an outstanding track record in projecting the results of power market auctions. We are pleased to offer comprehensive market advisory services for RESS 1. Our offering Our core offering is a project-level view of the RESS 1 auction supply stack and bidding assumptions, along with our projection of the RESS 1 auction achieved prices and cleared projects from a detailed auction model. Optionally we can also provide projections of the key revenue / cost line items for your project level financial model. Detailed auction supply curve An auction supply curve at the project-by-project level Project level assumptions on all relevant costs, to allow calculation of auction bid price We provide our project level database Onshore wind Auction projections Solar Sophisticated in-house auction model adapted to RESS 1 rules We simulate the auction using our projections of project level revenues and costs We provide our projection of achieved prices, merit order, and cleared plant Offshore wind Biomass Wholesale price projections & report Our industry-leading wholesale electricity market projections for the period 2020-2050, including capture prices for wind and solar PV Hydro Projections of negative pricing 2020-50 Essential to model the post-subsidy ‘merchant tail’ Biogas Waste-toenergy Accompanying report covering historical trends, market outlook, transition to I-SEM, description of our assumptions, and more Projections of other revenues / costs A complete set of projections for the period 2020-50 for other key revenues streams and costs including: curtailment, imbalance costs, capacity market revenues, DS3 revenues Our approach Our proven approach builds on our extensive previous experience with competitive auctions in GB, Germany, France and Eastern Europe. Overview of our modelling approach 1 2 Build database of all renewable projects and determine timing Key Inputs Produce detailed project-level bid price using granular cost / revenue assumptions Key Inputs 3 4 Run auction simulation Key Inputs Derive and report auction outcomes Key Outputs Project name Technology costs Auction rules Auction prices Developer name Location specific load factors and costs Auction volume Cleared capacity Preference categories Successful projects: Capacity Economy of scale assumptions Location Planning status Financing assumptions Connection status – by developer type – by technology type Competition ratio Optimal bidding strategy by developer type Curtailment projections Merchant tail projections Bid price ‘headroom’ Our RESS 1 pricing model takes account of key financing constraints: Cashflow: Lifetime project return must Debt cover: Assumed minimum debt service cover ratio, Equity return: Assumed minimum be greater than WACC at both annual level and over economic lifetime rate of return over economic lifetime Why Baringa? High impact Team We have mobilised our team of industry-leading experts to provide the right combination of deep Irish market expertise, commercial experience, auction design and strategy know-how. Auction experience Baringa has an outstanding track record of successfully modelling and projecting the results of power market auctions – from renewable support through to grid capacity, system services and capacity markets. We have been voted No.1 management consultancy in the UK’s ‘Energy, Utilities and Environment’ sector by clients and peers in the Financial Times poll for 2018. 2019 and 2020. Independence Track Record We have an entirely independent view of the RESS 1 auction, providing a crucial market benchmark without favouring any particular technology type of asset class. Our clients use our analysis and reports to inform investment decisions and have confidence in the analysis we provide. Lenders frequently rely upon our analysis to make debt financing decisions. We were awarded Best Workplace 2018 (Large category) by Great Places to Work™ and have featured in the top ten for 12 years. We’re also proud of being a Times Top 50 Employer for Women 2019, and being a Race at Work signatory, as well as for having an ‘outstanding’ Net Promoter Score (NPS) customer loyalty rating. Interested? Contact us If our RESS 1 offering is of interest, please do reach out to discuss how we might support. We welcome the chance to discuss a bespoke service. Mark Turner Director, Baringa Partners LLP Luke Humphry Senior Manager, Baringa Partners LLP [email protected] [email protected] +44 7584 290310 +44 7739 966 691 Copyright © Baringa Partners LLP 2020.