Polar Works-Our Services

Providing Build/Own/Operate Capabilities

The Financing Challenge

Inlet air cooling projects are usually conceived of as capital improvements to existing plants. As a result, financing rules require shorter payback periods (usually within one year) than current inlet air cooling technologies can deliver. Even for plants and technologies that show favorable payback, many projects are financially constrained by restrictive covenants in their debt agreements; they are not allowed to undertake capital improvements or additional debt. This sometimes results in sub-optimal outcomes, whereby projects that could be beneficial are not built.

The Polar Works Solution

With the Polar Works Build/Own/Operate (B/O/O) model, we offer an existing gas turbine plant the opportunity to have a team of power plant professionals design, build, and operate the desired inlet cooling addition. Why? Because we believe that an inlet cooling system, when properly designed, more nearly approximates a new capacity addition rather than a capital improvement project. This means that a large inlet cooling project should be treated as if you were building a new power plant, and should be financed in the same way.

Polar Works doesn't simply arrange for off-balance sheet financing or leasing. Rather, we provide a refrigeration service. In determining the appropriate model to benefit your particular situation, we can use your existing Power Purchase Agreement (PPA) as a starting point. Options include:

Fee for service: Polar Works meters the refrigeration delivered to inlet cooling systems and bills per the ton-hour. This means that you pay for what you take in refrigeration, enjoying the benefits of increased power production. Refrigeration becomes a variable cost of production.
Capacity service: Polar Works provides the installation, with dispatch being dictated by the host site. This arrangement is to your financial advantage if you have a plant that is subject to dispatch or to part-load operations. The cost of our service is spread out over a longer financial time frame, making this cost resemble a fixed, rather than variable, component of production.
Development service:For Merchant plants, Polar Works provides the inlet cooling system, which in turn is financed by a third-party energy company, who dispatches fuel to the project, and has a tolling agreement with the host site. Financially, this translates into a weather-derived capacity payment made to your site by a third party, in return for your acting as BTU converter.

Each Polar Works B/O/O plant is set up as its own legal and operating entity, enabling us to attract diversified, low-cost financing for each project.

Reducing Project Risk

When Polar Works provides a system under our B/O/O service, we undertake project development and financing roles for the incremental power output. We take on the risk that the cooling system will operate as promised, day in and day out. We can dispatch the cooling load at the direction of the Host site. We can procure all required utilities (electricity, gas, make-up water) from outside of the plant, if necessary. We can even assist in permit modifications for the plant.

We can assist in guaranteeing off-take of the added power through tolling agreements with gas marketers. We can even tie the seasonal cooling load to a weather derivative. We provide these flexible services to our customers because we know the challenges they face. We have been in their situations ourselves-we're power plant people.