Carbon Neutrality Modelling
Client Challenge
The client had committed to reducing their Carbon Emissions by 30% in 2030 and achieving complete carbon neutrality by 2040.
Measuring and tracking the development and the success of projects becomes very complex.
They required:
- An integrated tool to model carbon emission reduction and the effect it has on key financial metrics across their extensive project portfolio.
- Stochastic modelling to measure the confidence in achieving their targets after accounting for various types of risks.
- Capability for ongoing alternative and what-if scenario creation and portfolio planning.
The Solution
Integrated Carbon Neutrality Portfolio Solution
The capability provides a consolidated, bottom-up view of carbon emissions, financials, and risk modeling for each project and Group portfolio. Using a driver-based approach, it models key metrics from the project level, enabling granular analysis and strategic decision-making for overall emissions and financial outcomes.
Stochastic Modeling Capability
Stochastic modelling capabilities allow the quantification of risk and confidence in achieving carbon neutrality targets. This includes assessing:
- Project Efficiency
- Project Delays
- Event-Based Risks
- Production Risks
Advanced Scenario Modelling
The creation of scenarios that are designed to mitigate identified risks by assessing various possible outcomes and determining which variables or levers can be adjusted to make these outcomes more certain and reduce potential negative impacts.
Solution Value
The deployment of our integrated capability brought substantial value to the client’s operations in several key areas:
Integrated Model
The solution streamlines the management of the complex carbon portfolio, enabling efficient scenario modeling and data-driven decision-making. By consolidating carbon emissions data and financial
metrics into a single, unified platform, the client can visualize and track their progress toward carbon neutrality targets in real-time.
Stochastic Analysis
This provides a probabilistic assessment of different outcomes, giving the client a clear understanding of the likelihood of meeting their targets under different conditions. This enabled the client to measure and communicate the risk and confidence levels, providing a numerical basis for decision-making under uncertainty.
For example, if uncertainty around the methane exchange factor poses a significant risk, the client might decide to adjust production to lower their greenhouse gas output. Alternatively, they could implement an offsetting mechanism, such as establishing a PV plant or purchasing carbon credits to compensate for the emissions and improve the likelihood of reaching their target.
Proactive Project Scheduling:
With insights on potential risks and uncertainties, the client can proactively schedule projects to avoid delays and improve delivery, ensuring target achievement. For example, if a project’s delay is identified as a high-risk factor, rescheduling it earlier can reduce uncertainties and enhance the likelihood of achieving the target.
Mitigating Project Delays:
The tool offers real-time insights and proactive measures, enabling decisions that minimize project delays, especially in critical areas. This facilitates more effective scheduling and resource allocation, ensuring projects remain on track and on time.
Informed Decision-Making:
The solution assists in making informed decisions about whether to proceed with specific projects. By analyzing various risk factors and potential outcomes, the client can decide with confidence which projects will most benefit their carbon reduction goals and overall portfolio performance.