Stage 1 – Forecasts
All available data is entered into a master database to look at the global trends.
Basic information about the energy market is included in the database historically from 1970s to the present for every country; and for the major countries representing 83% of the world markets for energy as far back as 1950. In some cases there is data available stretching even farther back.
The data available to the analyst in any research field is variable. For example; some very small national utilities have published exemplary reports for many years, with all the information required. There are several in Africa, the Middle East and Asia. The records of these countries are extremely valuable in providing benchmarks for similar economies where only the most elementary electrical statistics exist and which have to be modeled.
Most of the industrialized countries publish reasonably comprehensive information but by no means all. Detailed information is now becoming available for many of the former Comecon countries, which is a major advance on the accessible information available for NRG Expert reports and databases.
The data comes in so many forms and from so many sources that many conversions were required, the most common being from miles to kilometers. NRG Expert also encounters differences in bookkeeping and year end practices, so care is taken to ensure that data is recorded in the right year, where necessary being projected forwards or backwards to the base year for forecasting.
Stage 2 – Modeling
A set of models is created for all countries, based on the data categories in the Master Database. Where past data is available it is entered and where not available, estimates are made. The global market is modeled on different criteria and a series of projections is made. Time series projections are then made on the basis of a number of variables.
Stage 3 – Background Research
A literature search together with interviews with executives in the industries are conducted to construct a set of ratios of the composition of total capital cost for its components; land purchase or way rights, design and engineering, construction, M&L direct cost, FLOH indirect field cost and finance cost. There are wide variations in the composition of these costs. Average figures should not be used without careful evaluation of each situation but as an indicator.
Stage 4 – Verification
The final stage of analysis was a bottom-up examination of every estimate in the spreadsheets. Each figure is scrutinized in the light of market experience and carefully evaluated. Particular attention is paid to evaluation of the actual achievements of governments against published development plans and targets. This is an area requiring considerable experience of the markets because the outcomes are not always obvious.
