Successful Power Project Development Best Practices

KATRINA PIELLI: Hello, everyone. Thank you so much for joining us today to learn more about successful power project development best practices. My name is Katrina Pielli, and I am the Strategic Initiatives lead and acting External Affairs lead at the U.S. Department of Energy, Office of Indian Energy. Next slide, please. 

Before we begin the session, I’d like to go over just a few housekeeping items. First, to turn on live captions, click on the Show Captions button in the control panel at the bottom of your screen. 

Second, to submit a question for the presenters, click on the Q&A button in the control panel at the bottom of your screen. We will do our best to answer those during the 30-minute optional office hours segment at the end of the session. 

Third, today’s webinar is being recorded. That recording transcript and slides will be available on the Office of Indian Energy Webinars website in the next 1 to 2 weeks. And, finally, all registrants for today’s webinar will receive a copy of the slides via email in advance of them being posted on the webinar webpage. Next slide, please. 

We’re excited to be joined by the Office of Indian Energy’s technical assistance partner, the U.S. Department of Commerce Commercial Law Development Program, commonly referred to as CLDP. CLDP provides legal technical support that promotes economic growth, secures U.S. supply chains, strengthens partnerships, and ensures energy security and prosperity. 

Today, we will focus on the Understanding Series handbooks. These are used globally by public- and private-sector decision makers, including Tribal leaders here in the U.S., for guidance on legal frameworks and strategies behind developing, financing, and procuring power projects. We’re excited to be joined by the authors of these handbooks to further discuss power purchase agreements, power project financing, and procurement, natural gas and LNG development, power transmission financing, and energy storage. And, as I previously mentioned, there will be 30 minutes at the end of the session dedicated to answering your questions. Next slide. 

Before we begin, I do want to take just a moment to share more about our office. So, 20 years ago, Congress authorized the Department of Energy Office of Indian Energy. The vision for our office was established in law to promote Tribal energy development, efficiency, and use, reduce and stabilize energy costs, enhance and strengthen Tribal energy and economic infrastructure, and electrify Indian lands and homes. And I’m happy to share that this vision continues to be carried out with speed under Director Eric Mahroum. We have a successful track record working with Tribal nations, and the discussion today will build on that. Next slide, please.

We offer three main areas of support to federally recognized Tribes. First, financial assistance on a competitive basis to develop and deploy energy infrastructure and technology. Second, no-cost technical assistance to advance Tribal energy projects and energy-sector commerce. The expert team at CLDP that you will hear from today provide technical assistance to nations as part of this offering. And, third, capacity-building activities through webinars like today, with the goal of supporting Tribes to fully participate in unleashing American energy. And with that, let’s dive into today’s webinar. Next slide. 

Please help me welcome our speakers today: Kenyon Weaver, senior counsel for CLDP at the U.S. Department of Commerce; Mohamed Badissy, expert for CLDP at the U.S. Department of Commerce and assistant professor at Penn State Dickinson law; Carl Fleming, energy and project finance group global cohead at McDermott Will & Schulte; Shah Jahan Khandokar, partner at McDermott Will & Schulte; and Seth Doty, partner at McDermott Will & Schulte. 

So, to kick it off, I’m pleased to introduce Kenyon as senior counsel. Kenyon Weaver leads CLDP’s energy and minerals team. He supervises a group of attorneys, specialists, and experts that collaborate with various government ministries, Tribal leaders, regulators, and national energy companies to develop transparent and competitive legal regulatory frameworks for sustainable investment in power generation and transmission, as well as improved mining governments. I’ll now pass it over to Kenyon to provide an overview of CLDP and their primary areas of focus.

KENYON WEAVER: Thank you so much, Katrina, and it is wonderful to be here. We really appreciate spending time with you. And before we dive into these books, I want to give you just a little bit more context about who we are because it also explains how we got here. How did we get with these guides?

So, briefly, we are part of the U.S. Department of Commerce. We’re under the Office of General Counsel. And we are, in effect, a law firm for governments worldwide and sovereigns right here in the United States, in the sense that all we do is legal and regulatory technical assistance directed and supported by our partners, like the Department of Energy here today, Department of State for our worldwide work. And we’re able to carry this out. We’re able to facilitate legal reforms precisely because we have incredible partners like the speakers here today.

And, so, I’d love to talk to you a little bit about the power work we have globally. In addition to our energy and minerals—that is to say, some oil and gas, geothermal, mining, and minerals governance.

And that picture on the last slide was actually at a lithium brine salar, a lake.

In the power sector, what we do is we work with governments, with regulators, with ministries on a government-to-government basis to empower them to attract responsible investment, to develop the types of market structures that will bring in privately financed and developed power generation, storage, transmission through the types of durable contractual arrangements, through projects financed through private investment. 

Just a few of our global examples here: one in Southeast Asia that we finished up recently. Another in Caribbean that’s continuing, in particular, on energy storage. And, really, the origin story of these books is our work in Sub-Saharan Africa, and that is through a Power Africa program that, for over a decade, worked with something like 15 governments on energy generation and storage. So, we can go to the next slide, please.

In short, what CLDP and DOE have been able to partner to do is through DOE support. Our office, the attorneys at Commercial Law Development Program, we are able to deliver legal, technical assistance, and capacity building to federally recognized Indian Tribes. And we were able to get underway just about a year ago. I would say today maybe actually our anniversary from getting underway.

And we’re able to work on a range of issues from the actual frameworks through looking at a mapping exercise, seeing what assets there are, seeing where the opportunities, especially latent opportunities, are. Looking at a government take analysis and the different types of, perhaps, options like utilities and other mechanisms that can improve energy sovereignty for the Tribes and unleash energy here in the United States. Data centers, of course, taking a prominent role as well. So, next slide, please.

What we’re going to cover today, in brief—we’re first going to look at what are these guides. Because, at this point, something like 100,000 of these guides have been published, circulated. They’re on a number of desks of, as we found, utilities, regulators, and other government officials. So, what are they? How do they come about? Why is it that this is something that we want to share and talk to you about for our Tribal partners here?

The second is: How can we use them? What is the practical application of these guides? There’s a lot of reading material out there. We want to talk to you about some of the practical ways that these books have been used and are continuing to be used, both worldwide and by the Tribes that we have the privilege to be partners with.

And then we’ll turn to some of the authors here with us today about, what is it that these handbooks have been used, specifically in practice? What are some of the projects? How have they been able to move towards steel in the ground? So, we’ll finish with that. Of course, we have Q&A at the end. So, we’ll do the last slide before I turn it over to really the original source of it all, Muhamed Badissy. But I’m going to talk to you about, first, what are these—what are these handbooks?

These are a series of guides that are now a decade in the making. And they are coauthored handbooks in which we take a number of experts across the spectrum—government, private sector, the financers, we have community members, academics—and we bring them together. And for a week, they need to put together a resource that answers a specific question that is of particular use or need for a government official.

And it started with the power purchase agreement. And it started with Muhamed Badissy, who’s going to be our next speaker, realizing in his work all around the world that the same questions were coming up about the power purchase agreement. But, of course, the questions were coming from our government partners. Not the private-sector partners. And, so, how can we demystify—how can we illuminate what a government official would need to know in order to feel confident and comfortable with moving forward for private investment into new power generation, new transmission, new storage, new market design?

So, above all, these are meant to be a practical resource, and they are oriented for government officials. That’s who that is for whom they are written. Although they are developed for international work and largely financed by our State Department partners, the reality is that much of the expertise comes from some of the lawyers you’ll hear from today who saw what they saw in the United States, but also world worldwide, and saw how many common threads and common questions there were on, for example, power purchase agreements or on procurement.

And, so, the whole purpose started with, well, you should see what’s happening over here in order to feel empowered to have it happen in your own jurisdiction, in your own country, in your own land. And in a way where you’ve learned—you can learn some of the lessons, or you can avoid having to learn some of the lessons that happen in other countries. And, so, you can fast forward and start right away, more knowledgeable, more empowered. And, really, from there, starting with the power purchase agreement book, which is now in its second edition. These books have been translated into multiple languages and are now used worldwide, and we’re here to share them with you.

I’m going to stop speaking so that you can hear directly from the coauthor of every single one of these, and really the brainchild behind them. I’m going to turn the microphone over to my colleague Mohamed Badissy, who will walk you through the five books, along with our colleagues from McDermott Will & Schultz. So, Mohamed, over to you.

MOHAMED BADISSY: Well, thank you very much for a very kind introduction and, more importantly, for your leadership as well on maintaining this resource that we have developed over the years.

Again, just by way of introduction, my name is Mohamed Badissy. I have the pleasure of having worked at CLDP for over a decade, have been a law professor, have been a lawyer in private practice. 

But throughout my career, I’ve had, I think, the greatest pleasure of almost exclusively working with governments. I was lucky to represent governments and private practice work with governments when I worked for the U.S. government. And even in my academic work and my role as a law professor, I researched government contracts and the role that governments play in energy markets.

So, as we get into these handbooks, we talk about why we develop them, what the resources are. I think one of the bits of wisdom to add here is to really emphasize an important point that Kenyon raised. We have found, over the years, that those of us who work in this space, who work on power projects, who work in the financing side or the contracting side of these projects, there’s a significant level of conformity between a contract you might see for a solar project.

On our continent, in Sub-Saharan Africa, might see—in Central Asia, there tends to be this sort of unspoken reality that lawyers share information a lot, and law tends to travel in a funny way. And energy markets, electricity markets, in particular—it’s always good to keep in the back of your mind, or one of the last few truly regulated markets that we have in this modern capitalistic era that we live in.

Most everything out there these days is deregulated. You can sell milk for any price you want. You can sell airplane tickets for any price you want. But electricity is one of those few remaining resources where we tell people who can build it, the power project, who can sell it, what price they can sell it at.

And, really, it’s one of the few markets where we have to protect. And we’re actually required as regulators, as government officials, to protect the consumers, whereas in most cases, consumers have to fend for themselves because of that common interest, that common interest in regulated markets, and consumer protection, and structuring what is effectively a public good at the end of the day, see a lot of similarity around the world when it comes to these handbooks.

So, what you see on your screen here right now is the series of handbooks that we currently have available. These were produced, as you mentioned, in response to questions from governments about how do we negotiate the contract, how do we structure the financing, how do we design a procurement process? And then, more recently, our handbooks have broken down into particular specific types of projects, the first one being on battery storage, a relatively new technology. It’s really picked up pace in the last 5 to 10 years.

We’ve had a lot of questions from governments about, first of all, what are these battery storage projects? That handbook covers the use cases we’ll get into a little bit later, but what are the particular considerations. And then, most recently, on transmission, which for those of you who are familiar with the U.S. market, is a big headache here, but is frankly a big headache in just about any market around the world. It’s not enough to just build a power plant and to generate the electricity. Transmitting it over long distances—it tends to be a challenge as well.

So, we can move on to the next slide. I think, again, the piece of wisdom here is that we have received a lot of questions from governments, as Kenyon mentioned. Governments play an extremely important role in energy markets because they are one of the last few regulated markets. And we hope that these can be a resource for you and fulfilling that role.

The actual genesis of where we started with this whole process is we sat down in a room—I think at 2014, if I remember correctly. And the question that was posed to us was, can you develop an ideal power contract? Can you draft the perfect contract that we can just hand over to governments, and they can just put it in front of developers and say, okay, sign this, we’re done? No negotiation, move on.

Unfortunately, what we learned after just sitting in that room for about 30 minutes—a room full of lawyers and bankers and government officials and fairly smart folks—is that there was no way on Earth we were going to agree on what an ideal contract was. So, instead, we decided, rather than write the contract, let’s describe what goes into a contract. What are all the bits and pieces, the risk allocation mechanisms, the pricing mechanisms, the land use terms? What goes into actually drafting a power purchase agreement at the end of the day?

And, so, we developed a goal. We wanted to describe the components of this contract. But then we also realized that because we had so many smart, important, and busy people in the room, we couldn’t take up too much of their time in drafting this. So, what you see on the slide here right now is—the way these handbooks were drafted was using a process called the book sprints method, where we basically get between 15 to 20 authors in the same room, again pulling from multiple different constituencies, governments, bankers, lawyers, economists, developers. We even had multinational agencies, like the World Bank, involved. We all get in a room. And over the course of five days, everybody writes bits and pieces of the book. We put it together, then everybody edits everybody else’s pieces. And it’s a constant process of writing and editing.

And at the end of that, those five days, we actually have a handbook. It’s a pretty efficient process. It’s an intense process. The folks on this call who you hear from have participated, have described it like being back in college, writing a term paper, crashing on writing it intensely.

But what’s lovely about it is we can say with a high degree of confidence that what you will find in these handbooks does not represent any one person’s exclusive perspective. It represents the synthesis, the collective knowledge and the collective understanding of multiple individuals. So, we like to think of it as common sense wisdom. And it’s been well received. And in many ways is one of the more trusted resources because it’s not exclusive to one side of the negotiation or one side of the equation. It tries to describe the perspective of all sides. Next slide, please.

I think we covered this already – that the authors cover the spectrum of different participants. I will note one very quick thing here that Kenyon mentioned early on, but it’s worth emphasizing again—even though we have developed most of these handbooks using experts from outside the U.S., a lot of the substance and a lot of the case studies came from the U.S. experience.

But I would even note this for our Tribal government members, where I think it’s important to draw a distinction here is that, as opposed to the domestic U.S. market, which is largely a private market—private developers, private buyers, private utilities—the framework for many nations, for many sort of Tribal governments, is much more similar to the foreign governments that we work with, where you have a much stronger government role. Maybe the government owns the land. The government is often the regulator. Sometimes it’s a coinvestor in the project. Sometimes it’s actually buying the power from the project.

We call this a sovereign participation or a sovereign influence. And those characteristics, I think, make a lot of Tribal projects much more similar to projects in emerging markets than the typical private market transaction that you have here in the U.S. That creates a challenge, of course, for many of you who work in this space where you may have us developers coming to you with a domestic mindset, not realizing the unique nature of your Tribal government. But feel secure somewhat in knowing that a lot of the wisdom and guidance these handbooks is geared towards that sort of government-led and a lot of government participation in the power markets, which is more common, again, both in Tribal situations and in emerging markets. Next slide, please.

The resources are hosted on our website. I think it’s important here to pause and mention that every single one of these handbooks is not only free in the sense that there’s no charge for them, they’re also open source. You are more than welcome to take bits and pieces of the handbook, re-edit it for your own purposes. Add in perhaps Tribal-specific information, knowledge, context, regulations, whatever it may be, and develop your own versions of these handbooks, possibly for internal training, possibly to share with potential investors to understand the context of your environment.

These are really meant to be flexible resources that have maximum utility. So, take them as they are, or reuse them and remix them in any way that you find to be helpful for yourself. Oftentimes, we’ve seen a lot of our partners in foreign governments who are training new staff using these handbooks, also pulling out, maybe, key chapters or key graphics for their own internal presentations. They really are yours to use in any way you see fit that is helpful to you. Next slide, please.

And then, in terms of how to approach these handbooks, we’re going to talk to you about the first one.

And then, I think at this point, we’re going to walk through the specific handbooks themselves. The first handbook where we drafted the first edition of is called Understanding Power Purchase Agreements. And now we’re currently in the second edition. 

As I mentioned before, it’s really a breakdown of the contracts. The contracts that are the foundation of most modern power projects. Power projects are somewhat unique in that oftentimes, when you’re selling a product, you develop the product. You start selling a little bit of it. You refine it over time, and you hope that your market grows. In other words, you start small, and you grow over time with most transactions of most businesses.

What’s unique about power projects is that they often have to sell all of their product, all of the electrons, all of the output of the project before it’s even built, before they’re even in the market. That’s because it’s hard to justify. It’s hard to really finance and convince investors or banks to lend you the money for a large power project if you don’t already have a customer for it.

So, in that sense, the purchasing of the power through the power purchase agreement is the most significant act in allowing a project to be economically viable. It is the fundamental economic anchor that makes sense for all that construction to happen, the development, the land acquisition, et cetera. It all rests on this understanding that the power has already been sold. We already have a customer, effectively, whether it’s utility, or maybe a data center these days, or whatever it may be.

The selling of that power is a fundamental act. And, so, the negotiation of that contract is significant. These are highly complex contracts because they anticipate the sale of large quantities of power over decades, oftentimes at 25, sometimes even a 30-year period. So, you’ll find, in this very first handbook, the breakdown of all the terms, the various risk allocation terms, what happens if there’s a disruption in the project or in the construction phase. What if the project underperforms after it’s reached commissioning?

What if there is, God forbid, a war at some point during that, and it has to shut down for a period of time for a force majeure event. All of those different scenarios and those different risks you have to anticipate, those are what you program into these contracts. And those are the different terms this handbook seeks to cover. Next slide, please.

And I’ll leave you with one particular insight here, and happy to come back to this during the question and answer. One thing that we’ve really tried to emphasize in this handbook on power purchase agreements is all of the different actors, all of the different entities that are involved in the project. So that governments can anticipate who they’re going to have to coordinate and work with.

So, you are not just dealing with a developer—perhaps it’s a person that you’re negotiating the contract with. But standing behind them, as you can see in the graphic that’s on the slide, are sometimes a dozen other actors. There’s the construction company. There’s the operating company.

There’s the supplier of the gas turbines or the panels. There’s the lenders who are actually lending money to the project. There’s the landowners, on and on and on. Not to mention the actual offtaker who’s going to buy the project power at the end of the day.

We call it orchestrating the dance or a coordination. I sometimes call it herding cats, whatever you want to, term want to use. But understanding that when you’re going into the negotiation of a power purchase agreement, and you’re going into the development of a power project, although you may have a primary counterpart standing behind them and sending around them are many other important actors that you have to understand and oftentimes interact with successfully for these projects to actually move forward and be viable.

I think I’ll pause there, and I’m going to hand off to Shah, I think, to talk about our next handbook, which I had the pleasure of working with them on project financing. Thank you.

SHAH JAHAN KHANDOKAR: Thanks, Mohamed Badissy. Hi, everyone. So, I’m Shah Jahan Khandokar. I’m a partner at McDermott Will & Schulte. So, this handbook is in its second edition. We updated the first edition a couple of years ago. Now, in terms of the big picture: Mohamed Badissy has set the picture in terms of the actual project. And then what we go on to talk about in this book is how these large power projects—or any size power project, really—how they are financed. Especially in markets where there aren’t many of these types of projects. Especially bringing together where the governments, private investors, lenders—all of these stakeholders, how they all have to work together.

So, the goal of the book really is to help stakeholders understand how financing structures work, how risks are allocated, and what governments or relevant procuring authorities need to actually do or should do in order to attract investment.

Ultimately, the role of project finance over here: We break it down into a one-on-one, very basic. Initially, in terms of a special-purpose vehicle is created, and then loans are repaid mainly from that power project, future cash flow that Mohamed Badissy just explained and not necessarily just the developer sponsors’ balance sheets. And that financing is often just limited to that project. So, we refer to that type of financing as limited recourse or nonrecourse financing. Key idea that we’re trying to get across in the book is that lenders will rely on the project itself, and not necessarily those developers or the sponsors standing behind those projects. Next slide, please.

We also go on to talk about the various different sources of financing. So, financing could come in the shape of equity, from the sponsor, then an investor of the project. It could come in the form of debt from banks, development finance institutions, multilateral institutions, and/or there may be grant or concessional financing as well. And those different sources of financing can be used at different stages of the actual product development life cycle as well—that life cycle being development, construction, and operation and maintenance.

We reiterate over here that, ultimately, when stakeholders, when these stakeholders are working together, they need to consider risk allocation. The most important issue in our project finance generally is risk. Those main risks fall under the broad categories of construction risk, operational risk, market and demand risk, political and regulatory risk, and essentially nonpayment risk as well. The principle being that we try and get across through the book is that risks need to be allocated to the right party that’s best able to manage them.

Additionally, so, Mohamed Badissy spoke about the actual power purchase agreement. And in one of the slides, you show there’s a myriad of different contracts as well. So, we talk a little bit more about some of the other types of contracts involved being the construction contracts, the operation maintenance contracts, the fuel supply agreements, if it’s a conventional power plant, and the different financing agreements, and how they all need to fit together what lenders will typically look at. It’s important to bear in mind that when it comes to these type of projects and the risk appetite of the various different stakeholders involved, usually the lenders will have the most conservative lens in evaluating the risks associated with the project.

Importantly, we speak about the role of the procuring authority. They clearly are essential because they sit in over the whole project in terms of creating that stable and legal regulatory framework. Often, they may act or support the actual offtaker, the actual purchaser of electricity, and they may sometimes provide credit support as well. We also touch on various credit enhancement tools as well—be it guarantees, or insurance, or political risk guarantees, for example.

And lastly, clearly, this being the power sector, or it applies to any sector generally. There are evolving trends. Given that this was the second edition, we did include some trends that we’re seeing around the world, be it in the risk of bid in terms of carbon credit, power trading, or just in terms of the different technologies acknowledges that are used.

So, the bottom line really is that, ultimately, we’re trying to turn a risky, capital-intensive infrastructure project into a bankable investment. And I’ll hand over to my colleague Seth now for the next session.

SETH DOUGHTY: Thank you, Shah. So, the Understanding Energy Storage book is a very important book, as any of us that are in the energy storage space for the reasons that Muhamed alluded to—transmission and other constraints that our grid basically everywhere is facing—energy storage has become hugely important everywhere.

In my particular practice, it’s a huge portion of what I do, is energy storage. And I think in the world, it’s becoming so important to allow for our energy system to work the way that it is intended to work. And, so, the Understanding Energy Storage book is a great resource for anyone that is looking for an introduction into energy storage or looking to dive deeper into it.

And it’s got things for everyone, whether you’re a regulator, or a planner, or an energy service provider, or utility, a developer, a potential owner. It really dives into a lot of what makes energy storage work. Some of the guidance is about how the ownership happens—public ownership, private ownership, sales of these projects at completion or at various stages, and how these business models work.

It talks about the use cases of batteries, how to create policy and regulation, and planning to ensure that the batteries and the huge value that they provide—which we’ll get into in the next slide—can actually accomplish that. It goes into, provides summary of key contracts that any energy storage project will require, including engineering, procurement and construction contracts, procurement of the various key components of the batteries, and the other inverters and other key components.

Financing battery storage and other long-term services agreements to make those work, as well as the offtake agreements to sell the energy to a offtaker to the extent that’s going to happen. 
And, in most cases, there’s a very practical use case for many of the examples that are provided throughout the book of each of the above points that I’ve discussed, as well as the points that we’re going to talk about at the next slide. Next slide, please.

Where this..beyond everything I just said, one of the huge places that this is hugely beneficial and hugely illustrative is a good 35% of the book or more is in-depth guides as to the various use cases that exist for battery. With diagrams and very clear descriptions as to how a battery or any energy storage device could really assist a grid, or assist a developer, or assist a behind-the-meter load microgrid requirement to provide capacity services, energy services, and ancillary services to really make the grid or microgrid work.

There’s a description and examples of how they have actually used batteries to solve particular needs, and these descriptions could also provide an example for any developer/owner to potentially understand how the revenues could be provided to the extent that those streams of services can be monetized via the market or via bilateral contract.

The Understanding Energy Storage handbook also goes into great detail as to the description of the technical capabilities of energy storage, the various performance measurements that are key to ensuring that the project is performing at the level that is contracted for, and to ensure that the grid operator is getting the services that it needs, as well as to keep the project up at the standard and level that is required.

And, so, those capabilities, those technology descriptions, are available to understand what the battery procurement looks like from the procure. And to understand how those batteries can provide value and help meet the particular needs of the grid need for which the battery is being developed, or deployed, or sold. And now I’ll give the floor back to Mohammed and Carl Fleming to discuss the Power Transition and Procurement handbooks.

MOHAMED BADISSY: Thanks, Seth. Carl, let me ask you one very simple question to kick this off. You have dozens, if not hundreds, of clients breathing down your neck every day trying to get these power projects built. What is the biggest headache for power projects today in the United States, if not around the world?

CARL FLEMNG: That’s a great lead-in question. Thanks for setting me up. And I wanted to say too, as we’re doing this, this is amazing. It’s a little trip down memory lane. I remember back in 2014 trying to do the first one of these. And the question seems so simple at the time: What kind of forum do we put together? And, eventually, it turned into we’re not going to be able to do that. And then these books became the most critical thing to come out of that. And, now, it’s great to see so many iterations of them.

But to answer your question more directly: I think any project in the U.S. that we’re working on right now, one of the first things that anyone’s going to look to is what is the transmission or interconnection situation for that project? Do you have your interconnection lined up? That may even at times—that goes hand-in-hand with the power purchase agreement that Mohamed was speaking to before.

You want to have this long-term revenue stream that’s lined up, and it’s got to be fairly bulletproof that revenue is going to come in. But then the question is: What do you do with that? How do you get it to other places? And, so, now your transmission and your interconnection has become just as equal, if not the most pressing issue, for developers or anyone really in that ecosystem of folks that were laid out as who’s doing these projects.

For us and for most people, this is probably the heart and soul of what’s going on right now, at least in the U.S. and in a fair number of other markets that we’re in.

MOHAMED BADISSY: No. I think well said, Carl. And the only thing I would add to that is that for many of our friends in the Tribal governments, you may come at this from a couple different angles.

For the nations with smaller landholdings, you may be more of a receiver of this headache as opposed to a solver of this headache. You may have really excellent solar or wind resources. You may be close proximity to a natural gas source, or a gas plant makes sense, whatever it may be. But despite the quality of your resource, and the availability of your land, and even high-quality customers you may have, there’s this missing link, this transmission link, as Carl just mentioned.

So, you may need to at least be aware of this headache of this constraint as you think about the viability of power projects in your particular market. For those with more land availability, you may actually be one of the solvers of this problem. We’ve had the pleasure of working with a few Tribal governments already, one of which is very directly thinking of how to monetize, how to actually participate and develop transmission assets to help actually solve some of this deficiency.

I mean, transmission lines themselves are worth their weight in gold, if not more these days because of that significant constraint that Carl’s mentioning, because they’re so necessary to deliver the power that others are developing these days. So, as you think about the transmission problem, I won’t say much more than that.

As you look at this handbook, we help describe how these transmission projects are developed on a private basis, which is still not the case in many countries. And many countries, they still build transmission lines as a public resource. But also understand why transmission systems matter, how they function, and who participates in those markets, who you actually might be contracting with at the end of the day—whether it’s an independent line owner, or a regional transmission system, or whatever it may be. Understanding those markets is pretty important, given the significant role and the headaches that the lack of transmission is causing and the U.S. power market these days. 

Carl, please go ahead.

CARL FLEMNG: I was going to say quickly, just to piggyback on that, I think, yeah, the headache and the solution problem. I think everyone tends to turn to think about generation immediately. Hey, we have this portion of land. We have this many potential resources. You immediately go to the generation aspect. And that’s what first instincts are to do.

But I think when you look at the positioning of some of these various Tribal lands, there’s just these massive opportunities, for one reason or another, to develop or to utilize existing transmission areas. I wouldn’t say it’s a more complicated process, but it’s a step removed from the generation where you really have to sit down and look at the markets and all the factors you just mentioned.

But I think doing that exercise and going through and using this guide can really unlock a ton of hidden potential for Tribal lands. And, like you said, you’re sitting on gold at some points. But you wouldn’t necessarily think that unless you do a market analysis and really see where this transmission interconnection could be monetized. And then through the guide, how do you do that? How do you monetize it? How do you put credit and support to it and do all these things with other market players? But no, I couldn’t help but jump in there.

MOHAMED BADISSY: And point well taken. I’ll even say I think we can skip the next slide because we both just covered it so well. This, again, is just a description of the different types of private transmission projects one could encounter. If you do get into this part of the market, again, we develop—most energy markets are described in three chunks. There’s the generation, the transmission, and the distribution. This is describing that middle piece, which, again, has become so important.

Carl, why, I hand it to you just to talk about the last and final handbook, the procurement. Just because I think both you yourself and that in your firm’s broader practice, we have to think about the project, we have to think about the project contract. But the process of actually thinking through planning and going to market. How it is you actually offer something to the market can be just as important in terms of the success of these things. So, I’d love to hear your thoughts on that.

CARL FLEMNG: Sure, sure. Yeah, thanks. So, I think, yeah. To your point, how you go about or engineer a proper procurement process can help you win, or lose, or optimize your actual resources that you have. After you’ve done all the analysis under the PPA, the interconnection, you’re ready to go. And you have a game plan going forward.

How you bring that to the world can have not only market implications because people are going to—how you package that is going to be how the market receives it. But, also, there’s administrative concerns too, in that you have to run a tight procurement practice, typically because there is a competitive market out there, and people will want a fair and equitable assessment of your procurement processes.

So, myself, I’ve worked on the various sides. I’ve helped developers and others submit into procurement processes and try get awarded for the various types of energy work. But I’ve also, in my time working for the U.S. government, I’ve worked for the folks that had to put together the RFQ or the RFIs and also analyze and come up with the criteria for an equitable review of these submissions. So, you want to be very detailed in your submissions.

So, many times in the RFQ processes, may want to be a bit generic to get feedback from the market and see what entices the market to participate, but you also may really have genuine questions as to what they need to see from you to bring this to market. But then in your actual RFPs and the procurement, you’re going to want to have very detailed and specific items to flesh out what you really need to get the commercial sense and the legal sense of folks are going to be committed to.

And at the same time, not leave much wiggle room for people to say that was a pretty ambiguous term or ambiguous way to open up potential disputes over these things. So, I think in the book, it does a great job. It goes through the planning process, the types of models you can use, how to make it competitive. You want to drive up the market, and optimize your assets, and how to even negotiate.

It goes a bit into the tariffs and selecting the right process. So, I think it’s a pretty comprehensive guide. And, like you said, Mohamed, that’s the light version. We have a whole team that helps governments or sovereigns come up and run proper processes the right way.

MOHAMED BADISSY: Now, I will say, I mean, I just have this last slide here—I mean, I think Carl said it well, but I’ll double down just saying that the negotiating of a power project, the signing, the development, it’s a big event. Again, everything happens today, and then it runs for 25 years.

So, not just the price. I mean, we all think about the price of power, and competitively pricing, and getting the best price is key. And that is fundamentally one of the most important things at the end of the day. Because oftentimes, again, if you’re representing your consumers, you want them to have the most affordable power possible.

But again, for our Tribal government partners, it’s important to realize that also, if you’re hosting this project, want the best possible neighbor for the next 25 years—somebody who’s going to manage the land responsibly, who’s going to manage the project successfully and not leave you with a headache, perhaps if they abandoned the project halfway through.

If you’re a codeveloper, if the Tribe is coinvesting, want a good partner in the project. And then, of course, if you’re even buying the power, you want the most stable, reliable, and predictable power supply possible. So, for all these reasons, that process of presenting to the market the opportunity filtering, who participates, say, like in a tender or competitive auction—and that negotiation, as Carl mentioned, that process really tees you up for success at the end of the day.

It is an investment of time. It does take time. And that’s what this book does—is to help explain all the work that goes into developing these procurements. But it pays off in terms of the stability and the, hopefully, the competitive nature of the result. At the end of the day, I think we’ll go to the next slide here. Then, as we’re wrapping up.

This is just an example. Again, we’ve been really lucky. As Carl mentioned, we sat down—gosh!—more than a decade now to start this project. We’ve had a lot of partners along the way, a lot of governments have adopted these resources. We treat this as an organic, growing library of experience. And I’m going to stop here and mention that the only thing we asked for.

Again, these handbooks are free. They’re open source. This is not a money-making pitch that we’re giving you today. But where we found that these things are helpful and where they continue to be helpful and relevant is actually in getting feedback from those who are using the resource.

So, my one and only ask at the end of the day, and I think for those of us on this call and for CLDP in particular, is that when you do find a particular piece of this information be helpful, let us know because we can emphasize that going forward. If part of it seems to be stale or not really relevant to your work, let us because we can refine that going forward. And where you actually see success in your own implementation of some of the principles that are covered, let us because those are great case studies for the next edition of the handbook.

The moment you read one of these handbooks, become not just a consumer but a partner in the process. And we’d love to have that feedback as you go forward, so we can add even more successful use cases to the list that you see here. Next slide, please. I think, Kenyon, am I handing this back off to you? I’m sorry, Natalie.

NATALIE BURG: Thank you so much, Mohamed. Really appreciate it. We just wanted to quickly highlight, of course, the handbooks are really flagship products of the Understanding Series, but also wanted to highlight a couple other additional resources we have developed here at CLDP.

So, a new handbook we have developed just in the past year: It’s called Negotiations and Energy and Minerals—Exercises for Policymakers. So, this is a little bit of a different style. It goes into actual exercises to simulate some of the negotiations that you will go throughout the project development process. And I just want to highlight, no matter how ideal the project is, there will be some negotiations involved, whether internally or externally. So, that was a main driver behind this Negotiations book.

We also wanted to highlight another webinar series that we have also available on our website. This was also developed in mind towards our international partners, but I think a lot of these themes could also serve you throughout the project development process. So, they were aimed at a specific type of contracting public-private partnerships.

But, as you can see here, there’s about 10–15 webinars with different types of very specific information—for example, on prefeasibility, feasibility studies, financial modeling, all the different documents. So, if you’re eager for more webinars, please also check those out on our website.

I also want to quickly highlight we have also developed two other handbooks, one on Carbon Capture, Utilization, and Storage as well as Methane Abatement for Oil and Gas, and these are also available as part of our resources at CLDP. Now, I’m going to please hand it over back to Katrina to give us more information of how to request technical assistance with CLDP. Thank you so much.

KATRINA PIELLI: All of our presenters, before we get into the optional office hours segment, wanted just to review the process for Tribes who are interested in requesting that technical assistance. So, if you’re a federally recognized Tribe, you can go to the IE website and actually submit that request via a very simple email. So, the link will take you there. I will also drop it in the chat momentarily. And if you have any questions, you can always email us at ie-comerce-ta@hq.doe.dov. Next slide, please.

So, we invite you to stay connected with us after today’s presentation. You can contact our office via phone, email, or website. We’re also on all the social channels and really just appreciate the opportunity to connect with you today. And thank you to our presenters. Would welcome folks who want to stay with us. We will end the recording shortly and move into that office hours segment. But if you’re leaving us today, thank you so much.

We appreciate your time here. And with that, I will turn it over to Natalie to go ahead and facilitate that next section. And I will just drop into the chat before we go the website where you can learn more and request that technical assistance. Thank you so much.