Providing clean energy to billions of people at an increasing rate will require trillions of dollars in capital investment. Decarbonization also represents the best medium-term option for enhancing energy security. The 1970s oil supply crunch spurred Europe’s nuclear development. We similarly expect security concerns to motivate additional capital investment into hydrocarbon alternatives this time around. But can investors earn a return investing in decarbonization?
The conventional wisdom would have you believe that investing in the energy transition dooms you to low and even negative returns. At Orennia, we believe high returns are possible. And we built a data and analytics platform that makes high returns likely. We cover the full stack of decarbonization investment opportunities, including renewables, carbon capture, energy storage, voluntary carbon markets, low-carbon fuels, and compliance markets.
Where should the next investment dollar go? Orennia spends all of our effort at answering this question. Our clients can create sustainable competitive advantages as a result.
Here’s some examples.
Brownfield Development
Retiring fossil generators own two important energy transition assets.
- Grid connections and transmission access.
- Land suitable for electrical power development.
Companies who own retiring generators now see potential for a second life in energy storage and renewable generation. Because transmission access already exists, storage projects on brownfield sites realize faster construction schedules and shorter times to first revenue.
Orennia compiled retiring capacity data: investors looking for development sites have a head start. Our platform allows investors and developers to determine the revenue opportunity at these brownfield sites, and whether they are more profitable for storage, solar, or wind projects.
Green Hydrogen
The single largest component of the levelized cost of hydrogen is energy. Wind development in many parts of the country overwhelmed the transmission infrastructure, crashing prices and reducing revenue capture. Orennia evaluated these regions with depressed pricing, located hydrogen demand sources nearby, and modeled development project returns at various tax policy scenarios.
Finding the Right Site by Mining Interconnection Queues
Over 4,000 renewable energy projects have been proposed in deregulated jurisdictions in the United States. Every one of these projects needs an analysis of the transmission impact by the independent system operator (ISO). Such an analysis determines which upgrades are required for a new project and allocates a proportion of those costs to the project developer.
Interconnection queues are so backlogged that there is a small chance of a new project — one that is not currently in the queue — making it through in a reasonable timeframe.
Broken IQs generate headlines, but the process of examining the dozens of interconnection queues across the United States yields a myriad of economically relevant variables that feed a multitude of analytic workflows. This is arguably the most important function of building IQ “muscles.” And like any analytics exercise, coordinating many datasets increases power.
For example, IQ data often doesn’t include critical competitive information such as project owner, name, location (beyond county) or locational marginal price (LMP) node. Finding this information is an intensive, often manual process, built with web scrapes, investor presentations, media reports, and other government agency data.
Our clients find Orennia’s expertise in mining interconnection queues, combined with a scalable, efficient cloud-based analytics platform, is a game-changer in their ability to rapidly screen opportunities and find those that are likeliest to result in mid-teen returns.
