Gas company

For this project, we worked with a multi-country team of consultants, supported by local gas experts. The aim was to determine the potential for the client to enter new markets in Europe, based on the margin they could achieve in each country.

We determined with the client a series of consumption profiles, from small residential consumers to very high consumption industries (e.g. power plant). For each of those profiles, we determined what is the maximum price at which the customer would be willing to purchase gas, taking into account energy alternatives.

For example, a household has different energy options regarding the heating of its house i.e. gas, electricity, fuel oil. Each of those energies has a variable cost (cost of energy) but also a fixed cost component (installation of boiler or electric appliances or a tank etc.). The idea is to determine what should be the value of this variable component for gas, so that it remains a competitive energy. Based on this, we derived a maximum gas price for each profile.

A second step was to determine the margin the company could achieve. In each country, there are infrastructure costs for transportation, distribution, storage, regazification etc. Those costs results from complex formulas depending on the network structure, the regional specificities, the number of players in the market, the point of entry of gas in the country etc. Retrieving these costs from the end-user price allowed us to determine the gross margin for the company.

As a result, the client could prioritize his target markets in Europe, per segment and country. Furthermore these results gave our client the necessary elements to renegotiate prices with its gas suppliers.