Capital Costs Analysis Forum - European Power

The IHS CERA Capital Costs Analysis Forum - European Power helps utilities companies and power generators to better monitor, forecast and manage costs within their portfolios of projects and to discuss costs from a strategic point of view with regulators and investors. At the core of the IHS CERA Capital Costs Analysis Forum - European Power is the Power Capital Costs Index (PCCI), a tool used for monitoring the current state of the European construction cost environment. Similar to the Consumer Price Index (CPI), the PCCI consistently measures a fixed basket of input - in the PCCI's case those associated with the construction of a portfolio of power generation facilities.

The European portfolio is a balanced representation of all the major regions as well as fuels and technologies. The forum also tracks and reports data on individual markets that drive construction costs such as:

• Labor
• Engineering rates
• Bulk materials
• Steel
• Engineered equipment
• Other factors

The forum looks into the future using a structured, scenario-based methodology. IHS CERA analysts apply their expertise and industry knowledge to frame changes in PCCI values against larger issues such as shifts in industry fundamentals or regulatory shocks, as described in the IHS CERA long-term Global Energy Scenarios.

The forum also aspires to create a dialogue among private investors and public regulators concerning rising project costs. IHS CERA hosts interactive workshops to foster these conversations, the results of which support subsequent versions of the CPPI.

Forum members receive the following services:

• Two sets of semiannual reports
• Workshops
• IHS CERA website access
• Telephone and email access to research staff

Benefits:

The major benefit of forum membership is access to unique, timely insights concerning project costs, their direction and the strategic implications associated with changes in the global and European cost environment. By developing and monitoring a set of indicators specifically designed to reflect the critical issues in project development, forum members will be able to better understand strategic issues such as

• What is the actual versus estimated rate of inflation for large projects?
• How do development costs vary by European country?
• How do different generation technology types compare?
• How does a firm’s specific portfolio of projects compare to the IHS CERA Capital Costs Analysis Forum indexes?

The IHS CERA Capital Costs Analysis Forum - European Power helps utilities companies and power generators to better monitor, forecast and manage costs within their portfolios of projects and to discuss costs from a strategic point of view with regulators and investors.

At the core of the IHS CERA Capital Costs Analysis Forum - European Power is the Power Capital Costs Index (PCCI), a tool used for monitoring the current state of the European construction cost environment. Similar to the Consumer Price Index (CPI), the PCCI consistently measures a fixed basket of inputs - in the PCCI's case those associated with the construction of a portfolio of power generation facilities.

The European portfolio is a balanced representation of all the major regions as well as fuels and technologies. The forum also tracks and reports data on individual markets that drive construction costs such as:

• Labor
• Engineering rates
• Bulk materials
• Steel
• Engineered equipment
• Other factors

The forum looks into the future using a structured, scenario-based methodology. IHS CERA analysts apply their expertise and industry knowledge to frame changes in PCCI values against larger issues, such as shifts in industry fundamentals or regulatory shocks, as described in the IHS CERA long-term Global Energy Scenarios.

The IHS CERA Capital Costs Analysis Forum - European Power membership provides timely insights concerning project costs, project direction, and the strategic implications associated with changes in the global and European cost environment. IHS CERA delivers two research cycles per year, each culminating in member workshops. At scheduled times through the year, members receive the following products and services:

Quarterly Reports

• Power Plant Construction Costs Market Updates (quarterly)
• Track the current state of industry costs using unique indexes
• Analyze the drivers behind changes in plant construction costs
• Describe the near- and long-term implications of current and projected changes in costs
• Provide comparative analysis of cost trends across European countries and project development types
• Project long-term cost trends using a scenario-based process

Special Report on Strategic Issues in Construction Costs (semiannual)
A thought leadership piece that provides incisive analysis on a topic critical to understanding the current and future cost environments.

Workshops
In the spring and autumn, forum members convene for a half-day workshop to discuss the most recent forum research and to debate the factors influencing long-term cost trends. The results of these debates guide the next round of analysis and modeling.

Website Access
Participants have access to the forum website, which serves as a reference tool and on which is posted selected research analysis and findings, summaries and workshop proceedings, projects schedules and logistics information.

Telephone Access to Research Staff
Forum Members have access to IHS CERA research staff for telephone consultation during normal business hours.

• A representative portfolio of projects is defined.
• Each project is modeled to the equipment level of definition.
• Each project is then priced using a multiyear database of industry costs.
• Individual project values are aggregated into indices, with the components compared and analyzed.

Using this methodology, IHS CERA can solve questions involving interrelated component costs, such as:

• What will be the impact of a 10 percent rise in labor rates on the total portfolio?
• How much would steel costs have to drop to compensate for such a rise in labor rates?
  

IHS CERA Research Experts

Candida Scott, IHS CERA Senior Director
Roger Kranenburg, IHS CERA Director
Jone-Lin Wang, IHS CERA Managing Director
Deborah Mann, IHS CERA Director