Energy - Case Studies Flashcards
World energy consumption
164K TWh
Average height of a wind turbine
280 feet or 85 meters
Barrels of oil produced per day in US
12M
Percentage of HH energy usage on HVAC
51%
New solar capacity (2022)
191 GW
A few examples of energy services case topics
Market sizing (e.g., “How big is the solar opportunity in X?”)
Investment decisions (e.g., “Is this new tech worth investing in?”)
Competitive response (e.g., “How should we respond to new entrant Y?”)
Key players: Oil and gas
These companies are involved in the exploration, production, refining, and distribution of oil and gas. They’re among some of the biggest, most influential and most controversial companies in the world. Most consumers are acutely aware of their brands because of their retail distribution of gasoline (e.g., gas stations). Examples include ExxonMobil, Royal Dutch Shell, and Chevron.
Key players: Renewable energy:
These companies are involved in the development, construction, and operation of renewable energy projects, such as wind, solar, and hydropower. They also have investments in energy storage and other related technologies. Examples include NextEra Energy, Enel, and Ørsted.
Key players: Utilities
These companies are responsible for the generation, transmission, and distribution of electricity and gas to homes and businesses. These companies are one of the key consumer touch points for the industry and they’re often unpopular because their government granted monopolies mean that customer service is often, but not always, an afterthought. Examples include Duke Energy, E.ON, and National Grid.
Key players: Equipment manufacturers
Specialized companies that design, produce, and sell hardware and equipment for various sectors within the energy industry, including oil and gas, renewable energy, and power generation. They play a crucial role in supporting the development, operation, and maintenance of energy projects by providing essential components and materials. For example, Halliburton and Schlumberger are leading suppliers of drilling equipment and services for the oil and gas sector. In the renewable energy domain, Vestas and Siemens Gamesa are prominent manufacturers of wind turbines, while First Solar and JinkoSolar are major producers of solar panels.
Key players: Energy traders
These companies buy and sell energy commodities such as oil, gas, and electricity, often on a global scale. They provide an essential role in ensuring that energy markets remain liquid and efficient. Examples include BP, Trafigura, and Vitol.
Shale revolution and fracking
The shale revolution and fracking have transformed the oil and gas industry. These technologies have enabled the extraction of oil and gas from previously inaccessible shale formations, leading to a surge in US domestic production and reducing the need for imported oil.
Return on invested capital (ROIC):
A calculation used to assess a company’s efficiency in allocating capital to profitable investments. The ROIC formula involves dividing net operating profit after tax (NOPAT) by invested capital.
Naturally, there is a large divide amongst the metrics that matter to different categories of energy companies. A useful high level split is what oil & gas companies may focus on versus what renewable energy might focus on.
Reserves replacement ratio (RRR):
The RRR measures the amount of oil and gas reserves that a company adds to its reserves base relative to the amount of reserves that it produces. A high RRR indicates that a company is successfully replacing its reserves and is likely to have a sustainable business over the long term.
Production Volume:
This KPI measures the amount of oil and gas that a company produces over a given period, typically measured in barrels of oil equivalent (BOE) per day. This is a key indicator of the company’s operational performance.
Production costs:
This KPI measures the total cost of producing oil and gas, including exploration, drilling, and operating costs. A company with lower production costs is more competitive and likely to have better profitability.
Revenue per BOE:
This KPI measures the amount of revenue that a company generates per BOE of oil or gas produced. This is a key measure of a company’s ability to generate revenue and profitability.
Installed capacity:
This metric measures the total power generation capacity of a renewable energy company’s assets, typically expressed in megawatts (MW) or gigawatts (GW). It helps assess the scale of a company’s operations and its market share in the renewable energy sector.
Capacity factor:
The capacity factor is the ratio of actual energy output over a period of time to the maximum possible output if the facility were operating at full capacity. It provides insight into the efficiency and performance of renewable energy assets, such as solar panels and wind turbines.
