Back to the - Future Biofuels

Developing bio-energy projects is not without its challenges. 2GB Consulting can help both project developers, investors and financers understand the key factors that drive project viability and also to identify risk-management strategies.

The key factors are:Understanding the market, both regulated and unregulatedSecuring feedstocksGaining offtakes for productsUnderstanding the interplay between markets, bioenergy solutions and regulationsEstablishing technical viability of solutionsClearly identifying risk, and determining how to manage it

Bio-energy projects are currently entirely dependent on a market which has been created through legislation. In the EU the primary drivers are the Renewable Energy and Fuel Quality Directives, with some help from the Waste Directive.

EU countries are gradually drafting legislation and regulations to implement EU Directives. Sadly this is not being undertaken in an entirely consistent way. Furthermore, even within any one country, legislation can be complex requiring detailed understanding and discussion with regulators in order to establish what support projects and markets will receive.

How regulations, feedstocks and energy markets interact to support one type of project over another is crucial to determining the ultimate commercial viability of a proposition.

2G BioPOWER has developed a wealth of knowledge in building business cases and understanding these factors. Its strategy has been to develop propositions that are, as far as possible, flexible and provide access to power, heat, and biofuel markets. Without such strategic flexibility any bio-energy project carries significant strategic risk. For this reason advanced conversion solutions have been selected in providing options for implementation in all these areas.

2G BioPOWER has also developed a range of basic modelling tools that allow it to evaluate propositions and support business cases including:

Project Concept Model:Operational modelMass and energy balanceCashflowBalance sheet
Leading to Cashflow and project IRR

Market modelling 
assessing impact of:Open market factors and Actual and proposed regulations
To project product prices 
Investor Analysis
Working from the project cashflow and modelling different
financing strategiesAssess potential and investor returnsAssessment against standard indicators (IRR, ROCI etc)

In all cases it is essential to consider:sensitivities to a range of key parametersswitching between scenarios to evaluate different implementation

The above tools and experience are suitable for:project developersproject due diligence for investors and financers

These tools were developed specifically for project development and evaluation. Examples of the types of project to which they have been applied are outlined on our Solutions page :

For more details download an introduction to our approach