Energy & environment

Sapere’s energy and environment team combine intellectual insight with practical, commercial experience. We provide independent and objective advice across all aspects of environmental and energy policy, regulation and strategy. We are experienced in resolving complex issues and can advise you on the selection and design of an analytical approach, and integration of our analysis into your decision-making process.

Our team has skills in quantitative and qualitative methods of analysis and experience at senior levels in both the public and private sectors. We are experts in:

  • Regulatory analysis;
  • Market design;
  • Economic modelling and forecasting;
  • Valuing natural resources and externalities;
  • Cost-benefit analysis;
  • Revenue and price setting; and
  • trading and risk management.

We have direct experience of the electricity, gas, water, transport, climate change and primary industry sectors. Our clients include private businesses, government policy-makers and regulators across the Asia-Pacific, and particularly in Australasia. We regularly provide expert testimony and litigation support.

What we do

We bring our detailed understanding of energy markets and environmental economics to bear on a wide-range of complex issues. Our team has diverse experience enabling us to provide advice that is specific and relevant to you. A selection of our experience is described in more detail below.

We apply our in-depth understanding of pricing in both commercial and regulatory settings in energy and environmental settings. We have experience advising on the potential impact of changes in the structure and level of prices.

Our work includes:

  • Providing advice on margin analysis of retail prices and monitoring prices in competitive markets;
  • Developing pricing methodologies and models for network companies, especially in the gas and electricity sectors;
  • Supporting applications for revenue resets; and
  • Policy advice and modelling of the regulatory objective and approach.

Whether as a stand-alone product or as part of our research into an issue, Sapere has deep expertise in analytical frameworks for decision-making, including optimisation, forecasting, scenario analysis and cost-benefit analysis. We understand well what the right analytical tool is for a given problem situation.

Our value, however, extends beyond just the construction of models; our experience as practitioners means we understand how models act as decision support tools. We have implemented models within wider operational and strategic decision making frameworks, to ensure that the limitations of models are well understood, and catered for.

Sapere’s experts are at the forefront of policy work on how to influence emissions reductions in the energy sector. We understand in detail the workings of government policies such as the NZ ETS and Australian Renewable Energy Target. We are able to set our work in context by coupling it with our modelling of the cost of moving to high levels of renewable electricity production while maintaining security and reliability.

We have expertise in the economic implications of resource management and have provided litigation support in approval processes for resource use, for example under District Planning processes and the NZ Resource Management Act. We have also reviewed the regulation of coastal space for marine farming.

Our experts bring experience as former high level strategic policy advisors in government, specialising in agriculture (including biosecurity), fisheries, forestry, natural resource management, and rural and regional development.

We have advised on the performance of commercial and research focused primary sector programmes such as the Primary Growth Partnerships, the regulation of Fonterra under the Dairy Industry Restructuring Act, the costs of pests to New Zealand, and aquacultural development.

We have advised on, and assisted in the implementation of, major border system reviews for biosecurity and customs in New Zealand and South East Asia. These reviews involved redesigning how border services develop and implement biosecurity import rules at the border consistent with WTO SPS requirements and domestic commitments.

Our experts provide independent and objective testimony that combines our precise understanding of economic theory with practical application to the specific issue.

Our work includes expert evidence:

  • On vertical integration from a public policy perspective and the commercial incentives for industry participants to vertically integrate, in the Australian Competition Tribunal;
  • Regarding duty of care and the outcomes that could be expected from a reasonable and prudent hydro operator, in the High Court of Ireland;
  • In relation to an application for authorisation of the acquisition of Macquarie Generation by AGL Energy Ltd, in the Australian Competition Tribunal;
  • On the competitive effects of decisions by parties in a joint venture to constrain gas production, in the New Zealand High Court; and
  • On whether regional water allocation rules should preserve existing quantities of water for use in renewable electricity generation, or allow additional water to be extracted for consumptive uses like irrigation.

Our experts are experienced in analysing markets to inform entry, exit and expansion decisions. We assist in corporate transactions for private sector clients identifying potential risks and opportunities. We also provide advice on potential competition law implications of changes in the market.

We have experience in market design, including wholesale electricity markets, emissions trading schemes, auctions and capacity markets in Australia (east and west coast markets), New Zealand, Singapore, and the Philippines.

We have recently provided advice to:

  • The Energy Market Authority of Singapore on a range of market design issues especially the evolution of a liquid electricity futures market;
  • The AER on efficient allocation of inflation in revenue setting; and
  • New Zealand wholesale participants on revising higher standards of trading conduct rules.

Our experts have advised market participants in these markets on the workings of code provisions and determinations in light of breach allegations

Our work includes:

  • Advising on the economic dimensions of water resources management and other water-related decisions and policies including efficiency, equity, production, allocation, and pollution;
  • Economic instruments used for managing and valuing natural resources;
  • Providing expert testimony on resource allocation disputes;
  • Preparing estimates of resource value; and
  • Advising on fee, levy and royalty structures;

A number of Sapere experts have experience in trading and risk management in corporate roles and in banking. We have provided advice on managing risk in energy markets in a number of jurisdictions and to participants in the NZ ETS.

We have prepared risk management policies and hedging strategies for retailers and large industrial users in New Zealand. We combine our deep understanding of commercially managing electricity market risk with our familiarity of the regulatory settings.

Sapere’s experts have been at the forefront of the changing trends in the energy industry, advising clients how to think about the future and the position of their firm within it.

The electricity industry is undergoing change, and we are often engaged by clients to help them think through the technological changes that are underway (e.g, solar, batteries, automation, and electric vehicles), the broader environmental trends (e.g, energy demand, low-emissions drivers) and emerging business models (e.g., distribution system operators). We are skilled in synthesising these trends and advising on the strategic implications for trading, customer acquisition and investment.

Our team has in-depth understanding of the public policy cycle. We pride ourselves on our analytical rigour, in particular our use of evidence-based analysis. We have published a number of articles that discuss sector outcomes in light of public policy settings especially in the energy sector and in relation to emissions profile aspirations.

We understand government expectations and requirements for the analysis of regulatory proposals and have knowledge of modern approaches to regulatory design and compliance. We have expertise in preparing regulatory impact statements in the energy and environment sectors.

We also have strong credentials in preparing consultation documents and submissions on regulation and policy and advising clients on the impact of regulatory change.