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Feasibility Assessment & Bioenergy Investment Attraction Strategy


Agenda A. Introduction of Team B. Project Methodology C. Characteristics of the Bioenergy Marketplace D. Key Players and Their Roles E. 3 Stage Process F. Goals, Objectives & Action Plan


Meet the Team

 Market research consultancy specializing in labour market economics and strategic planning and analysis for Economic Development Organizations (EDO’s)  25 years managing economic development assignments in over 60 countries around the world  Founded by Oxford University Professor and native Canadian, Dr. Raymond Duch


Meet the Team

 Canada’s leading sustainable energy think tank devoted to advancing environmental solutions  Over 25 years of experience in consulting, research design, and evaluation related to energy projects and advancing sustainable goals  Staff of over 55 highly-skilled professionals includes economists, engineers, political scientists, lawyers, government relations professionals, professional facilitators, communications staff and environmental scientists.


Methodology 2 Phases: Phase 1 Feasibility Assessment – Evaluate potential opportunities in the region: Identify opportunities and limitations  Categorize opportunities  Conduct a literature review to uncover relevant existing information  Targeted jurisdictional scan to provide context to the assessment Review and evaluate regional comparative advantages  Regional factors – economic characteristics, existing industries, infrastructure, labour force, etc.  Federal/Provincial policy environment  Stakeholder consultation Recommend Bioenergy opportunities based on relative strengths & weaknesses of each


Methodology Feasibility Study Overview

Opportunities Maximum feasibility

Regional and economic attributes

Stakeholder consultation process


Feasibility Assessment Conclusions & Recommendations ďƒ˜ Recommendations based on regional opportunities, limitations and priority enabling conditions ďƒ˜ Recommended options build on Southeast Alberta’s resource base, are associated with mature and reliable technologies, and have relatively mature markets 1. Ethanol using wheat as a feedstock 2. Biodiesel using canola (or other viable oilseed crops) 3. Biomass combustion to produce heat/electricity


Methodology 2 Phases: Phase 2 Investment Attraction Strategy – Develop a strategy to guide the EDA’s efforts to attract Bioenergy investment to Southeast Alberta: Phase 1 recommendations used to guide research  Three market opportunities for Southeast Alberta  An understanding of the conditions for successful operation  Regional comparative advantages and limitations linked to opportunities Targeted qualitative interviews with industry experts to supplement and assist in defining the market(s) of potential investors Recommend key marketing strategies and messages that will position the region to attract investment Develop Key Action Plan to be implemented by the EDA


Characteristics of the Bioenergy Marketplace Complex, deal-driven market for Bioenergy development, requiring a convergence of all the right circumstances Deals often initiated through networking between local businesses and outside parties, or organically, e.g. through a local cooperative Projects are highly capital-intensive and require many investors Operations subject to highly volatile commodity markets, affecting both input costs and product prices Large number of players involved in a making a deal happen Bioenergy projects have a long lead-time horizon for development


Characteristics of the Bioenergy Marketplace Key Players in a Bioenergy Project: Entrepreneur or Developer

Project Developer / Operator

Renewable Energy Companies

AgriBusiness / Biotech

Local Investors/ Co-Ops

Chemicals Companies

Feedstock Producers Farmers / Growers

Industrial Waste

Product End-Market

Other Waste Feedstock

Buyers for Primary Product

Bio-Energy Investment Deal

Networks Bio-Energy Associations Economic Developers

AgriBusiness Associations

Technology Development Networks

BPCP

Debt Finance

Clean Tech, Ag, and Other VC Investors

Co-Located Entities

Entities that Affect Costs of Construction and Operation

Value Chain Relationships

Sources of Capital

Buyers for CoProducts

Product Transportation Providers

Workforce Development

Construction Costs

Water, Gas, & Power Utilities

Governments Provincial Ministries

Local Governments


Characteristics of the Bioenergy Marketplace Seven types of Key Players identified: 1. Project Developers/Operators – may be entrepreneurs, energy companies active in renewables, ag biotech companies, chemical companies using products or byproducts, local cooperative coalitions, others that may arise over time 2. Feedstock producers – producers of waste (crops, industrial or municipal waste, etc.) that may be used as feedstock 3. Bioproduct buyers/end market operators – companies that use the Bioenergy products & co-products in their operations 4. Capital investors – VC firms, debt financiers, individual investors, etc. 5. Governments (Local, Provincial and Federal) – necessary approvals for permitting, licensing; may also provide incentives 6. Local (and non-local) service providers – educators, local partners in government, design/construction firms, etc. 7. Networks e.g. industry associations, business incubators, etc. – support Bioenergy or related product development


Investment Stages for the Bio-Energy Developer Opportunity Exploration Stages Identify and Assess End Market

End market possibilities will be identified upfront.

Identify and Assess Feedstock

Understand supply of feedstocks and their relation to Bioenergy Demand for opport. the bioenergy How steady product will are ultimately supplies? define the Are opport. that producers are interested pursued. in partnering?

Identify Sources of Capital

Capital source depends on specific opportunity. May be equity or debt financing for most businesses. Selffinancing if large investor

Project Feasibility

Go or No-Go?

Assess Costs, Operating Risks and Other Factors Affecting Feasibility

Applications & Permits

Go or No-Go?

Large investors may have established process or criteria to evaluate opportunities. Small/ mid size firms may need financial assistance from local governments or economic development organizations e.g. funding of feasibility study.

Prepare and Submit Necessary Applications

New Bioenergy facilities must pass several regulatory approvals, in addition to local or county development or building permits or other licensing requirements.

Construction & Operation Identify Contractors & Build Facility

Large investors may use preferred designers or builders. Small investors may need assistance to find contractors, provide housing for workers, etc.


Investment Stages for the Bio-Energy Developer Opportunity Exploration Stages Identify and Assess End Market

Identify and Assess Feedstock

Project Feasibility

Identify Sources of Capital

Go or No-Go?

Assess Costs, Operating Risks and Other Factors Affecting Feasibility

Applications & Permits

Go or No-Go?

Prepare and Submit Necessary Applications

Construction & Operation Identify Contractors & Build Facility

Potential Roles of the EDA Identify opport’s with petroleum bulk terminals and fuel retailers.

Create an inventory feedstock, waste streams of regional businesses, and resources as Identify a way of regional selling the possibilities region to for coinvestors. locating.

Raise awareness of SE Alberta investors and facilitate access to capital by networking with potential investors at trade shows, with other EDO’s, etc.

Reduce the cost to developers by: • Brokering relationships with suppliers • Finding ways to reduce operating costs through co-location, utilization of waste streams, etc. • Facilitate project exposure in the media, getting in front of government officials, making helpful political connections, connecting to investors. • Provide information to support due diligence • Assist with funds for feasibility studies

Assist with project support such as helping contractors identify local business Assure that partners or permitting establishing housing for occurs efficiently. workers during construction. Provide public relations support to increase local buy-in


Goals, Objectives and Action Plan The IAS is designed to: Give the EDA flexibility to adapt to an evolving landscape of opportunities Position the region to attract investment in emerging technologies, or leverage new end-user markets Uncover unexpected opportunities that may arise out of a unique set of circumstances Proactively manage relationships between multiple stakeholder groups


Goals and Objectives Goal 1: Generate Bioenergy Project Leads by Connecting Players Attract Investment from Non-Local Developers

1. Leverage networks to raise the profile of the region’s resources 2. Connect developers to feedstock producers, entities that affect costs, government resources, and local sources of capital

Identify and Support Projects with Local Developers

1. Uncover project opportunities with existing businesses and facilities 2. Find sources of capital. 3. Identify markets for coproducts 4. Identify and influence government resources 5. Connect developers to entities that affect costs and feedstock suppliers

Goal 2: Transition Opportunities into Viable Projects Support Feasibility Research

1. Provide information for project due diligence 2. Identify and prepare resources for financial assistance for feasibility studies.

Provide Tactical Project Support

1. Aggressively champion projects in media and with political leaders. 2. Identify and mitigate local PR risks. 3. Tactical support to developers to overcome individual project hurdles.


Action Plan 1. Form a Local Stakeholder Team 1. Look for parties that can benefit from Bioenergy Development 2. Determine the roles each will play 3. Scan for opportunities 4. Formalize a brand identity

2. Create Collateral and Marketing Assets to Attract & Support Investment 1. Create marketing collateral that communicates regional assets 2. Establish a micro-site 3. Establish funds to assist development

3. Begin an Active Lead Generation Program

4. Advance Opportunities that Arise and Promote Success

1. Educate potential key partners on regional advantages

1. Advertise and promote viable projects

2. Prospect development and qualification process

2. Build local support for viable projects

3. Networking at key trade shows 4. Media relations campaign

3. Actively work to mitigate risks or resolve problems for developers

Feasibility Assessment & Bioenergy Investment Attraction Strategy  

View the results of the Bioenergy Investment Attraction Strategy by the Economic Development Alliance of Southeast Alberta. For more informa...

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