Fair Market Value Appraisal
Coal’s energy provides the foundation of America’s fleet of power plants, responsible for producing more electricity each year than any other source. DAI’s appraisal services have supported coal projects in a variety of financing applications, including equity, term debt, and lease. DAI is certified by the American Society of Appraisers.
Recent Experience: DAI performed an appraisal of the Robert W. Scherer Power Plant, a large coal-fired power plant in Georgia, for a large European financial institution. DAI’s appraisal addressed the investor’s environmental concerns over potential future regulation, as well as long-term maintenance and capital upgrade issues related to future environmental controls.
Today’s energy markets are complex. A DAI market study can help investors and lenders evaluate both the demand-side and supply-side characteristics of a regional market, including long-run energy demand and capacity additions and retirements. DAI’s price forecasts are derived from a proprietary power market model developed in conjunction with faculty at Carnegie Mellon University.
Recent Experience: DAI served as market advisor for a large European investor for their equity investment in a new coal-fired power plant – one of the newest in the country, with commercial operation expected by mid-2011. DAI advised the investor on potential environmental regulation, regional transmission issues, and hedging of the power plant’s output.
Appraisal of Coal Handling Equipment
The location of most coal-fired power plants in remote areas means that transportation of fuels must often be conducted over long distances. Although much of the equipment is standard, its value often depends on the economic viability of the host power plant and the availability of other such plants in close proximity. As a result, a holistic approach to valuation is essential.
Recent Experience: For a prominent leasing company, DAI appraised a portfolio of coal handling equipment including conveyors and a rail spur. An integral part of the analysis was the economic viability of the associated coal power plant, as well as the outlook for environmental issues. DAI’s comprehensive approach to equipment valuation was critical to the lessor’s end-of-lease negotiations.
Evaluation of Repowering Alternatives
In many instances, a fossil fuel-fired facility – particularly one later in its design life – may find that a greater economic benefit can be realized by incorporating a renewable resource into its operation. Whether blending fuels or repowering, DAI can determine the value of all alternatives available to a particular facility from both an economic and a logistical point of view. Key factors in the decision-making process, including capital expenditures, operational limitations, state and federal incentive availability, and feedstock availability, are considered.
Recent Experience: DAI evaluated the potential for a waste coal facility to co-fire with biomass upon expiration of its PPA. By investigating the incremental capital expenditures, environmental permitting issues, and biomass fuel availability in conjunction with the potential economic benefits of new revenue sources (e.g., RECs), state and federal incentive availability, and a prolonged operating life, DAI’s analysis assisted the facility’s owners in pursuing a strategy fundamental to the plant’s future operation.
- Asset Management
- Energy Price Forecasts
- Equipment Appraisal
- Evaluation of Repowering Alternatives
- Fair Market Value Appraisal
- Independent Engineering Services
- Litigation Support
- Market Studies
- Property Tax Valuation