How to use the advanced (regulator) solar CSP power plant project finance model

How to use the advanced (regulator) solar CSP (concentrated solar power) plant project finance model

(Lord God, bless my website and my readers that they will contribute to my charity fund for the jobless, sickly, needy, homeless, hungry and destitute. God Bless you all my friends for reading my blog and ordering my project finance models. Amen.)

Finding an easy-to-use project finance model for a solar CSP power plant with built-in data is sometimes difficult as some models don’t have the sophistication of a regulator template model as well as the ease of using the model and viewing immediately the results of a sensitivity change in the inputs to the model.

This is now made easy because the Input & Assumptions worksheet (tab) has combined all the input and output information in a single worksheet and placing the reports in other worksheets such as Tariff Breakdown, Construction Period, Operating Period, Financial Reports and Levelized Tariff.

Following is a sample case study on a solar CSP power plant. From the preliminary design and cost estimates, the top management would want to know if the business idea of going into solar CSP power development, construction and operation is worth the effort – is it feasible and what are the economic and financial returns for risking capital.

Here are the inputs and outputs of the advanced template model from OMT ENERGY ENTERPRISES:

——————————————————————————————-

Here are the summary of inputs:

all-in capital cost (overnight cost) = 5,881 $/kW (target cost)

EPC cost portion = 4,526 $/kW (computed by model)

refurbishment cost = 5% of EPC cost on the 10th year (overhaul)

fixed O&M cost = 24.69 $/kW/year (target cost) = 2,144.03 ‘000$/unit/year (computed by goal seek)

variable O&M cost = 2.00 $/MWh (target cost) = 15.69 ‘000$/MW/year (computed by goal seek)

general admin cost = 100.00 ‘000$/year (target cost)

 

Thermal power plant inputs: (not applicable to solar CSP)

Gross heating value of solar CSP fuel = 5,198 Btu/lb

Plant heat rate = 10,663 Btu/kWh (32.00% thermal efficiency)

Cost of solar CSP fuel = 1.299 PhP/kg = 1,299 PhP/MT

 

Lube oil consumption rate = 5.4 gram/kWh

Density of lube oil = 0.980 kg/Liter

Cost of lube oil = 200.00 PhP/Liter

 

capacity = 200.00 MW/unit x 2 units = 400.00 MW

 

Plant Availability Factor, %                                    96.67% (computed by goal seek)

Load Factor, %                                                      95.00% (assumed)

Allowance for losses & own use, %                       2.00% (assumed)

Net Capacity Factor after losses & own use, %    90.00% (target net capacity factor)

Degradation rate, %                                               0.2%

 

construction period = 24 months (start 2016)

operating period = 25 years (start 2018)

 

Capital cost estimation assumptions and % local cost (LC):

Power plant footprint (ha)                                   10.00

Cost of purchased land (PhP/sqm)                    15.00 (no land lease)

Land cost, $000 $29.82 100.0%
Equipment Cost ex BOP, Transport ($000/MW) $3,209.89 15.0%
Insurance, Ocean Freight, Local Transport, % of Equipment Cost 10.0% 100.0%
Balance of Plant (BOP), % of Equipment Cost 31.0% 50.0%
Transmission Line Distance (km) 15.00
T/L Cost per km, 69 kV ($000/km) $84.00 100.0%
Switchyard & Transformers ($000) $145.00 100.0%
Access Roads ($000/km) $44.19 100.0%
Distance of Access Road (km) 15.00
Dev’t & Other Costs (land, permits, etc) (% of EPC) 2.0% 50.0%
VAT on importation (70% recoverable) 12% 100.0%
Customs Duty 0% 100.0%
Initial Working Capital (% of EPC) 1.0% 100.0%
Contingency (% of Total Cost) 7.5% 36.5%

 

Capital cost breakdown (‘000$): (computed values)

Uses of Fund:

Uses of Fund:
   Land Cost $30
   EPC (Equipment, Balance of Plant, Transport) $1,810,379
   Transmission Line Interconnection Facility $1,260
   Sub-Station Facility $145
   Development & Other Costs (Civil Works, Customs Duty) $36,870
   Construction Contingency $138,649
   Value Added Tax $165,337
   Financing Costs $181,578
   Initial Working Capital $18,104
Total Uses of Fund – $000 $2,352,351
                                 – PhP 000 118,316,450
Sources of Fund:
   Debt $1,646,646
   Equity $705,705
Total Sources of Fund $2,352,351

 

Local and Foreign Cost Components (from individual cost item):

Local Capital = 36.5 %

Foreign Capital = 63.5 %

 

Balance Sheet Accounts:

Receivables = 30 days of revenue

Payables    = 30 days of expenses

Inventory    = 60 days of consumables

 

Imported Capital Equipment:

Customs duty = 0%

Value added tax (VAT) = 12%

VAT recovery = 70% on 5th year of operation

 

Type of input / output VAT = 0 (none)

Type of incentives = 2 (BOI incentives)

 

Tax Assumptions:

Income Tax Holiday (yrs) 7
Income Tax Rate % (after ITH) 10%
Property tax (from COD) 1.5%
Property tax valuation rate (% of NBV) 80%
Local Business Tax 1.0%
Government Share (from COD) 1.0%
ER 1-94 Contribution (PhP/kWh) 0.01
Withholding Tax on Interest (Foreign Currency) – WHT 10%
Gross Receipts Tax on Interest (Local Currency) – GRT 5%
Documentary Stamps Tax (DST) 0.5%
PEZA Incentives (% of gross income) – 0% / 5% 0%
Royalty 0%

 

Capital Structure:

Equity Share = 30% at 14.00% p.a. target equity returns (IRR)

Debt Share = 70% (36.5% local, 63.5% foreign)

 

Debt Terms:

Local & Foreign Upfront & Financing Fees 2.00%
Local & Foreign Commitment Fees 0.50%
Local All-in Interest Rate excluding tax 10.00%
Local Debt Payment Period (from end of GP) (yrs) 10
Foreign All-in Interest Rate excluding tax 8.00%
Foreign Debt Payment Period (from end of GP) (yrs) 10
Local and Foreign Grace Period from COD (mos) 6
Local and Foreign debt Service Reserve (mos) 6

 

Foreign Exchange Rate:

Base Foreign Exchange Rate (PhP/US$) – 2013            48.0000 (construction)

Forward Fixed Exchange Rate (PhP/US$) – 2014           50.2971 (operating)

 

Escalation (CPI):

Annual Local CPI – for OPEX      0.0%            4.0%     for CAPEX (to model construction delay)

Annual US CPI – for OPEX           0.0%            2.0%     for CAPEX (to model construction delay)

 

Results of Financial Analysis:

 

First year tariff (Feed-in-Tariff) = 5.51450 P/kWh = 0.10964 USD/kWh

(at zero equity NPV)

 

Short run marginal cost (SRMC) and Long run marginal cost (LRMC)

Item PhP 000 PhP/kWh
Fuel                      – 0.000
Lubes              86,530 0.001
Var O&M          7,889,902 0.103
Total          7,976,432 0.104
MWh net        76,947,840
SRMC          7,976,432 0.104
Fix O&M        35,245,717 0.458
Capital Cost      381,107,017 4.953
LRMC      424,329,167 5.515

 

Equity Returns: (30% equity, 70% debt)

IRR          = 14.00    % p.a. (target returns)

NPV        = 0.00    ‘000$

PAYBACK = 10.28    years

 

Project Returns: (100% equity, 0% debt)

IRR          = 11.91        % p.a.

NPV        = (13,405,736)  ‘000$ (negative since IRR < 14.00%)

PAYBACK = 7.22        years

——————————————————————————————-

The above runs were based on goal-seek to make equity NPV = 0 (to meet equity IRR target of 14.00% p.a.).

You can perform sensitivity analysis and save the results in a case column (copy paste value).

You can breakdown the tariff ($/kWh) into its capital ($/kW-month) and variable cost recovery ($/kWh) portions.

You can prepare a all-in capital cost breakdown showing interest cost during construction and does model the impact of project construction delays.

You can show the evolution of capacity and generation (degradation) during the operating period and show other revenues, expenses and balance sheet accounts as they change over time during operation years.

You can show the income & expense statement.

You can show the cash flow statement.

You can show the balance sheet.

You can show the debt service cover ratio (DSCR) as it computes the cash flow available for debt service.

It also computes the benefits to cost ratio (B/C) of the project.

Finally, it computes the other financial ratios such as:

LIQUIDITY RATIOS

SOLVENCY RATIOS

EFFICIENCY RATIOS

PROFITABILITY RATIOS

MARKET PROSPECT RATIOS

 

Download the sample file below:

Model Inputs and Results – Solar CSP

 

Download the complete demo model for a solar CSP power plant in PHP and USD currencies are shown below:

ADV Concentrating Solar Power (CSP) Model3 – demo5b

ADV Concentrating Solar Power (CSP) Model3 (USD) – demo5b

 

To purchase the PHP and USD models at a discount(only USD400 for two models), click the link below:

CSP 400 mw Project Finance Model Ver. 3 – in USD and PHP Currency

 

You may place your order now and avail of a package for the unlocked model with free guidance on using it. The list price of the solar CSP model is USD1,400 and I will give you one-hour free for assistance in putting your input data into the model (via telephone or email or FB messenger).

 

Your energy technology selection expert.

Email me for more details and how to order off-line:

energydataexpert@gmail.com

Visit our on-line digital store to order on-line

www.energydataexpert.com

www.energytechnologyexpert.com

 

How to use the advanced (regulator) onshore wind power plant project finance model

How to use the advanced (regulator) onshore and offshore wind power plant project finance model

(Lord God, bless my website and my readers that they will contribute to my charity fund for the jobless, sickly, needy, homeless, hungry and destitute. God Bless you all my friends for reading my blog and ordering my project finance models. Amen.)

Finding an easy-to-use project finance model for an onshore wind power plant with built-in data is sometimes difficult as some models don’t have the sophistication of a regulator template model as well as the ease of using the model and viewing immediately the results of a sensitivity change in the inputs to the model.

This is now made easy because the Input & Assumptions worksheet (tab) has combined all the input and output information in a single worksheet and placing the reports in other worksheets such as Tariff Breakdown, Construction Period, Operating Period, Financial Reports and Levelized Tariff.

Following is a sample case study on a onshore wind power plant. From the preliminary design and cost estimates, the top management would want to know if the business idea of going into onshore wind power development, construction and operation is worth the effort – is it feasible and what are the economic and financial returns for risking capital.

Here are the inputs and outputs of the advanced template model from OMT ENERGY ENTERPRISES:

——————————————————————————————-

Here are the summary of inputs:

all-in capital cost (overnight cost) = 2,213 $/kW (target cost)

EPC cost portion = 1,496 $/kW (computed by model)

refurbishment cost = 5% of EPC cost on the 10th year (overhaul)

fixed O&M cost = 39.55 $/kW/year (target cost) = 16.28 ‘000$/unit/year (computed by goal seek)

variable O&M cost = 2.00 $/MWh (target cost) = 4.85 ‘000$/MW/year (computed by goal seek)

general admin cost = 200.00 ‘000$/year (target cost)

 

Thermal power plant inputs: (not applicable to wind energy)

Gross heating value of onshore wind fuel = 5,198 Btu/lb

Plant heat rate = 13,500 Btu/kWh (25.28% thermal efficiency)

Cost of onshore wind fuel = 1.299 PhP/kg = 1,299 PhP/MT

 

Lube oil consumption rate = 0.500 gram/kWh

Density of lube oil = 0.980 kg/Liter

Cost of lube oil = 200.00 PhP/Liter

 

capacity = 1.500 MW/unit x 10 units = 15.00 MW

 

Plant Availability Factor, %                                           36.90% (computed by goal seek)

Load Factor, %                                                             95.00% (assumed)

Allowance for losses & own use, %                              3.00% (assumed)

Net Capacity Factor after losses & own use, %         34.00% (target net capacity factor)

Degradation rate, %                                                     0.2%

Annual generation                                                        46,058 (MWh gross)

44,676 (MWh net)

 

construction period = 12 months (start 2014)

operating period = 20 years (start 2016)

 

Capital cost estimation assumptions and % local cost (LC):

Power plant footprint (ha)                                   3.00

Cost of purchased land (PhP/sqm)                    25.00 (no land lease)

Land cost, $000 $14.91 100.0%
Equipment Cost ex BOP, Transport ($000/MW) $1,031.66 15.2%
Insurance, Ocean Freight, Local Transport, % of Equipment Cost 10.0% 100.0%
Balance of Plant (BOP), % of Equipment Cost 35.0% 40.0%
Transmission Line Distance (km) 25.00
T/L Cost per km, 69 kV ($000/km) $69.77 100.0%
Switchyard & Transformers ($000) $1,814.00 100.0%
Access Roads ($000/km) $51.16 100.0%
Distance of Access Road (km) 15.00
Dev’t & Other Costs (land, permits, etc.) (% of EPC) 2.0% 100.0%
VAT on importation (70% recoverable) 12% 100.0%
Customs Duty 0% 100.0%
Initial Working Capital (% of EPC) 1.0% 100.0%
Contingency (% of Total Cost) 7.5% 45.0%

 

Capital cost breakdown (‘000$): (computed values)

Uses of Fund:
   Land Cost $15
   EPC (Equipment, Balance of Plant, Transport) $22,439
   Transmission Line Interconnection Facility $1,744
   Sub-Station Facility $1,814
   Development & Other Costs (Civil Works, Customs Duty) $1,216
   Construction Contingency $2,041
   Value Added Tax $2,088
   Financing Costs $1,614
   Initial Working Capital $224
Total Uses of Fund – $000 $33,195
                                – PhP 000 1,669,612
Sources of Fund:
   Debt $23,237
   Equity $9,959
Total Sources of Fund $33,195

 

Local and Foreign Cost Components (from individual cost item):

Local Capital   = 45 %

Foreign Capital = 55 %

 

Balance Sheet Accounts:

Receivables = 30 days of revenue

Payables      = 30 days of expenses

Inventory     = 60 days of consumables

 

Imported Capital Equipment:

Customs duty = 0%

Value added tax (VAT) = 12%

VAT recovery = 70% on 5th year of operation

 

Type of input / output VAT = 0 (none)

Type of incentives = 2 (BOI incentives)

 

Tax Assumptions:

Income Tax Holiday (yrs) 7
Income Tax Rate % (after ITH) 10%
Property tax (from COD) 1.5%
Property tax valuation rate (% of NBV) 80%
Local Business Tax 1.0%
Government Share (from COD) 1.0%
ER 1-94 Contribution (PhP/kWh) 0.01
Withholding Tax on Interest (Foreign Currency) – WHT 10%
Gross Receipts Tax on Interest (Local Currency) – GRT 5%
Documentary Stamps Tax (DST) 0.5%
PEZA Incentives (% of gross income) – 0% / 5% 0%
Royalty 0%

 

Capital Structure:

Equity Share = 30% at 16.44% p.a. target equity returns (IRR)

Debt Share   = 70% (45% local, 55% foreign)

 

Debt Terms:

Local & Foreign Upfront & Financing Fees 2.00%
Local & Foreign Commitment Fees 0.50%
Local All-in Interest Rate excluding tax 10.00%
Local Debt Payment Period (from end of GP) (yrs) 10
Foreign All-in Interest Rate excluding tax 8.00%
Foreign Debt Payment Period (from end of GP) (yrs) 10
Local and Foreign Grace Period from COD (mos) 6
Local and Foreign debt Service Reserve (mos) 6

 

Foreign Exchange Rate:

Base Foreign Exchange Rate (PhP/US$) – 2014             48.0000 (construction)

Forward Fixed Exchange Rate (PhP/US$) – 2015           50.2971 (operating)

 

Escalation (CPI):

Annual Local CPI – for OPEX        0.0%            4.0%      for CAPEX (to model construction delay)

Annual US CPI – for OPEX            0.0%            2.0%      for CAPEX (to model construction delay)

 

Results of Financial Analysis:

 

First year tariff (Feed-in-Tariff) = 6.39759 P/kWh = 0.12720 USD/kWh

(at zero equity NPV)

Short run marginal cost (SRMC) and Long run marginal cost (LRMC):

Item PhP 000 PhP/kWh
Fuel 0.000
Lubes 92 0.000
Var O&M 73,223 0.084
Total 73,315 0.084
MWh net 876,543
SRMC 73,315 0.084
Fix O&M 714,656 0.815
Capital Cost 4,819,795 5.499
LRMC 5,607,766 6.398

 

Equity Returns: (30% equity, 70% debt)

IRR           = 16.44     % p.a. (target returns)

NPV         = 0.00     ‘000$

PAYBACK = 8.04     years

 

Project Returns: (100% equity, 0% debt)

IRR           = 13.61         % p.a.

NPV         = (205,576)   ‘000$ (negative since IRR < 16.44%)

PAYBACK = 6.51         years

——————————————————————————————-

The above runs were based on goal-seek to make equity NPV = 0 (to meet equity IRR target of 16.44% p.a.).

You can perform sensitivity analysis and save the results in a case column (copy paste value).

You can breakdown the tariff ($/kWh) into its capital ($/kW-month) and variable cost recovery ($/kWh) portions.

You can prepare all-in capital cost breakdown showing interest cost during construction and does model the impact of project construction delays.

You can show the evolution of capacity and generation (degradation) during the operating period and show other revenues, expenses and balance sheet accounts as they change over time during operation years.

You can show the income & expense statement.

You can show the cash flow statement.

You can show the balance sheet.

You can show the debt service cover ratio (DSCR) as it computes the cash flow available for debt service.

It also computes the benefits to cost ratio (B/C) of the project.

Finally, it computes the other financial ratios such as:

LIQUIDITY RATIOS

SOLVENCY RATIOS

EFFICIENCY RATIOS

PROFITABILITY RATIOS

MARKET PROSPECT RATIOS

 

Download the sample file below:

Model Inputs and Results – Onshore Wind

 

Download the complete demo model for an onshore wind power plant in PHP and USD currencies are shown below:

ADV Wind Onshore Model3 – demo5b

ADV Wind Onshore Model3 (USD) – demo5b

ADV Wind Offshore Model3 – demo5b

ADV Wind Offshore Model3 (USD) – demo5b

 

To purchase the PHP and USD models at a discount (only USD400 for two models), click the link below:

On-shore Wind Power Project Finance Model Ver. 3 – in USD and PHP Currency

Advanced Offshore Wind Energy Project Finance Model (ver. 3)

You may place your order now and avail of a package for the unlocked model with free guidance on using it. The list price of the onshore wind model is USD1,400 and I will give you one-hour free for assistance in putting your input data into the model (via telephone or email or FB messenger).

 

Your energy technology selection expert.

Email me for more details and how to order off-line:

energydataexpert@gmail.com

Visit our on-line digital store to order on-line

www.energydataexpert.com

www.energytechnologyexpert.com

 

How to use the advanced (regulator) ocean thermal energy conversion (OTEC) power plant project finance model

How to use the advanced (regulator) ocean thermal energy conversion (OTEC) power plant project finance model

(Lord God, bless my website and my readers that they will contribute to my charity fund for the jobless, sickly, needy, homeless, hungry and destitute. God Bless you all my friends for reading my blog and ordering my project finance models. Amen.)

Finding an easy-to-use project finance model for an ocean thermal power plant with built-in data is sometimes difficult as some models don’t have the sophistication of a regulator template model as well as the ease of using the model and viewing immediately the results of a sensitivity change in the inputs to the model.

This is now made easy because the Input & Assumptions worksheet (tab) has combined all the input and output information in a single worksheet and placing the reports in other worksheets such as Tariff Breakdown, Construction Period, Operating Period, Financial Reports and Levelized Tariff.

Following is a sample case study on an ocean thermal power plant. From the preliminary design and cost estimates, the top management would want to know if the business idea of going into ocean thermal power development, construction and operation is worth the effort – is it feasible and what are the economic and financial returns for risking capital.

Here are the inputs and outputs of the advanced template model from OMT ENERGY ENTERPRISES:

——————————————————————————————-

Here are the summary of inputs:

all-in capital cost (overnight cost) = 11,197 $/kW (target cost)

EPC cost portion = 8,013 $/kW (computed by model)

refurbishment cost = 5% of EPC cost on the 15th year (overhaul)

fixed O&M cost = 58.11 $/kW/year (target cost) = 327.08 ‘000$/unit/year (computed by goal seek)

variable O&M cost = 1.48 $/MWh (target cost) = 8.81 ‘000$/MW/year (computed by goal seek)

general admin cost = 600.00 ‘000$/year (target cost)

 

Thermal power plant inputs: (not applicable to ocean thermal)

Gross heating value of ocean thermal fuel = 5,198 Btu/lb

Plant heat rate = 13,500 Btu/kWh (25.28% thermal efficiency)

Cost of ocean thermal fuel = 1.299 PhP/kg = 1,299 PhP/MT

 

Lube oil consumption rate = 5.4 gram/kWh

Density of lube oil = 0.980 kg/Liter

Cost of lube oil = 200.00 PhP/Liter

 

capacity = 16.00 MW/unit x 5 units = 80.00 MW

 

Plant Availability Factor, %                                    98.68% (computed by goal seek)

Load Factor, %                                                      95.00% (assumed)

Allowance for losses & own use, %                      36.00% (assumed)

Net Capacity Factor after losses & own use, %    60.00% (target net capacity factor)

Degradation rate, %                                               0.2%

 

construction period = 26 months (start 2015)

operating period = 25 years (start 2018)

 

Capital cost estimation assumptions and % local cost (LC):

Power plant footprint (ha)                                   6.00

Cost of purchased land (PhP/sqm)                    25.00 (no land lease)

Land cost, $000 $29.82 100.0%
Equipment Cost ex BOP, Transport ($000/MW) $5,683.03 0.0%
Insurance, Ocean Freight, Local Transport, % of Equipment Cost 10.0% 100.0%
Balance of Plant (BOP), % of Equipment Cost 31.0% 66.0%
Transmission Line Distance (km) 10.00
T/L Cost per km, 69 kV ($000/km) $84.00 100.0%
Switchyard & Transformers ($000) $3,000.00 100.0%
Access Roads ($000/km) $2,200.00 100.0%
Distance of Access Road (km) 10.00
Dev’t & Other Costs (land, permits, etc) (% of EPC) 2.0% 100.0%
VAT on importation (70% recoverable) 12% 100.0%
Customs Duty 0% 100.0%
Initial Working Capital (% of EPC) 1.0% 100.0%
Contingency (% of Total Cost) 7.5% 30.0%

 

Capital cost breakdown (‘000$): (computed values):

Uses of Fund:
    Land Cost $30
   EPC (Equipment, Balance of Plant, Transport) $641,046
   Transmission Line Interconnection Facility $840
   Sub-Station Facility $3,000
   Development & Other Costs (Civil Works, Customs Duty) $34,821
   Construction Contingency $50,978
   Value Added Tax $64,590
   Financing Costs $94,045
   Initial Working Capital $6,410
Total Uses of Fund – $000 $895,760
                                 – PhP 000 45,054,130
Sources of Fund:
   Debt $627,032
   Equity $268,728
Total Sources of Fund $895,760

 

Local and Foreign Cost Components (from individual cost item):

Local Capital = 33 %

Foreign Capital = 67 %

 

Balance Sheet Accounts:

Receivables = 30 days of revenue

Payables    = 30 days of expenses

Inventory    = 60 days of consumables

 

Imported Capital Equipment:

Customs duty = 0%

Value added tax (VAT) = 12%

VAT recovery = 70% on 5th year of operation

 

Type of input / output VAT = 0 (none)

Type of incentives = 2 (BOI incentives)

 

Tax Assumptions:

Income Tax Holiday (yrs) 7
Income Tax Rate % (after ITH) 10%
Property tax (from COD) 1.5%
Property tax valuation rate (% of NBV) 80%
Local Business Tax 1.0%
Government Share (from COD) 1.0%
ER 1-94 Contribution (PhP/kWh) 0.01
Withholding Tax on Interest (Foreign Currency) – WHT 10%
Gross Receipts Tax on Interest (Local Currency) – GRT 5%
Documentary Stamps Tax (DST) 0.5%
PEZA Incentives (% of gross income) – 0% / 5% 0%
Royalty  0%

 

Capital Structure:

Equity Share = 30% at 16.44% p.a. target equity returns (IRR)

Debt Share = 70% (33% local, 67% foreign)

 

Debt Terms:

Local & Foreign Upfront & Financing Fees 2.00%
Local & Foreign Commitment Fees 0.50%
Local All-in Interest Rate excluding tax 10.00%
Local Debt Payment Period (from end of GP) (yrs) 10
Foreign All-in Interest Rate excluding tax 8.00%
Foreign Debt Payment Period (from end of GP) (yrs) 10
Local and Foreign Grace Period from COD (mos) 6
Local and Foreign debt Service Reserve (mos) 6

 

Foreign Exchange Rate:

Base Foreign Exchange Rate (PhP/US$) – 2013           48.0000 (construction)

Forward Fixed Exchange Rate (PhP/US$) – 2014           50.2971 (operating)

 

Escalation (CPI):

Annual Local CPI – for OPEX      0.0%            4.0%     for CAPEX (to model construction delay)

Annual US CPI – for OPEX           0.0%            2.0%     for CAPEX (to model construction delay)

 

Results of Financial Analysis:

 

First year tariff (Feed-in-Tariff) = 17.85986 P/kWh = 0.35509 USD/kWh

(at zero equity NPV)

 

Short run marginal cost (SRMC) and Long run marginal cost (LRMC):

Item PhP 000 PhP/kWh
Fuel                      – 0.000
Lubes              17,667 0.002
Var O&M            885,860 0.086
Total            903,527 0.088
MWh net        10,259,712
SRMC            903,527 0.088
Fix O&M        13,857,218 1.351
Capital Cost      168,476,263 16.421
LRMC      183,237,009 17.860

 

Equity Returns: (30% equity, 70% debt)

IRR          = 16.44    % p.a. (target returns)

NPV        = 0.00    ‘000$

PAYBACK = 6.84    years

 

Project Returns: (100% equity, 0% debt)

IRR          = 12.53        % p.a.

NPV        = (7,627,154)  ‘000$ (negative since IRR < 16.44%)

PAYBACK = 6.22        years

——————————————————————————————-

The above runs were based on goal-seek to make equity NPV = 0 (to meet equity IRR target of 16.44% p.a.).

You can perform sensitivity analysis and save the results in a case column (copy paste value).

You can breakdown the tariff ($/kWh) into its capital ($/kW-month) and variable cost recovery ($/kWh) portions.

You can prepare all-in capital cost breakdown showing interest cost during construction and does model the impact of project construction delays.

You can show the evolution of capacity and generation (degradation) during the operating period and show other revenues, expenses and balance sheet accounts as they change over time during operation years.

You can show the income & expense statement.

You can show the cash flow statement.

You can show the balance sheet.

You can show the debt service cover ratio (DSCR) as it computes the cash flow available for debt service.

It also computes the benefits to cost ratio (B/C) of the project.

Finally, it computes the other financial ratios such as:

LIQUIDITY RATIOS

SOLVENCY RATIOS

EFFICIENCY RATIOS

PROFITABILITY RATIOS

MARKET PROSPECT RATIOS

 

Download the sample file below:

Model Inputs and Results – Ocean Thermal

 

Download the complete demo model for an ocean thermal power plant in PHP and USD currencies are shown below:

ADV Ocean Thermal Model3_50 MW – demo5b

ADV Ocean thermal Cogeneration Model3 (USD) – demo5b

 

To purchase the PHP and USD models at a discount (only USD400 for two models), click the link below:

OTEC 50 mw Project Finance Model Ver. 3 – in USD and PHP Currency

 

You may place your order now and avail of a package for the unlocked model with free guidance on using it. The list price of the ocean thermal model is USD1,400 and I will give you one-hour free for assistance in putting your input data into the model (via telephone or email or FB messenger).

 

Your energy technology selection expert.

Email me for more details and how to order off-line:

energydataexpert@gmail.com

Visit our on-line digital store to order on-line

www.energydataexpert.com

www.energytechnologyexpert.com

 

How to use the advanced (regulator) biomass power plant project finance model

How to use the advanced (regulator) biomass power plant project finance model

(Lord God, bless my website and my readers that they will contribute to my charity fund for the jobless, sickly, needy, homeless, hungry and destitute. God Bless you all my friends for reading my blog and ordering my project finance models. Amen.)

Finding an easy-to-use project finance model for a biomass power plant with built-in data is sometimes difficult as some models don’t have the sophistication of a regulator template model as well as the ease of using the model and viewing immediately the results of a sensitivity change in the inputs to the model.

This is now made easy because the Input & Assumptions worksheet (tab) has combined all the input and output information in a single worksheet and placing the reports in other worksheets such as Tariff Breakdown, Construction Period, Operating Period, Financial Reports and Levelized Tariff.

Following is a sample case study on a biomass power plant. From the preliminary design and cost estimates, the top management would want to know if the business idea of going into biomass power development, construction and operation is worth the effort – is it feasible and what are the economic and financial returns for risking capital.

Here are the inputs and outputs of the advanced template model from OMT ENERGY ENTERPRISES:

——————————————————————————————-

Here are the summary of inputs:

all-in capital cost (overnight cost) = 4,114 $/kW (target cost)

EPC cost portion = 2,848 $/kW (computed by model)

refurbishment cost = 10% of EPC cost on the 10th year (overhaul)

fixed O&M cost = 105.63 $/kW/year (target cost) = 5,132.47 ‘000$/unit/year (computed by goal seek)

variable O&M cost = 5.26 $/MWh (target cost) = 27.22 ‘000$/MW/year (computed by goal seek)

general admin cost = 10.00 ‘000$/year (target cost)

 

Thermal power plant inputs:

Gross heating value of biomass fuel = 5,198 Btu/lb

Plant heat rate = 12,186 Btu/kWh (28.00% thermal efficiency)

Cost of biomass fuel = 1.299 PhP/kg = 1,299 PhP/MT

 

Lube oil consumption rate = 5.4 gram/kWh

Density of lube oil = 0.980 kg/Liter

Cost of lube oil = 200.00 PhP/Liter

 

capacity = 50.00 MW/unit x 1 unit = 50.00 MW

 

Plant Availability Factor, %                                         97.08% (computed by goal seek)

Load Factor, %                                                            95.00% (assumed)

Allowance for losses & own use, %                            10.00% (assumed)

Net Capacity Factor after losses & own use, %         83.00% (target net capacity factor)

Degradation rate, %                                                      0.2%

 

construction period = 24 months (start 2014)

operating period = 20 years (start 2016)

 

Capital cost estimation assumptions and % local cost (LC):

Power plant footprint (ha)                                   50.00

Cost of purchased land (PhP/sqm)                    28.65 (no land lease)

Land cost, $000 $284.81 100.0%
Equipment Cost ex BOP, Transport ($000/MW) $1,964.38 24.7%
Insurance, Ocean Freight, Local Transport, % of Equipment Cost 10.0% 100.0%
Balance of Plant (BOP), % of Equipment Cost 35.0% 100.0%
Transmission Line Distance (km) 10.00
T/L Cost per km, 69 kV ($000/km) $20.00 100.0%
Switchyard & Transformers ($000) $569.03 100.0%
Access Roads ($000/km) $20.00 100.0%
Distance of Access Road (km) 10.00
Dev’t & Other Costs (land, permits, etc.) (% of EPC) 10.0% 100.0%
VAT on importation (70% recoverable) 12% 100.0%
Customs Duty 0% 100.0%
Initial Working Capital (% of EPC) 11.0% 100.0%
Contingency (% of Total Cost) 4.0% 50.0%

 

Capital cost breakdown (‘000$): (computed values)

Uses of Fund:
   Land Cost $285
   EPC (Equipment, Balance of Plant, Transport) $142,417
   Transmission Line Interconnection Facility $200
   Sub-Station Facility $569
   Development & Other Costs (Civil Works, Customs Duty) $14,442
   Construction Contingency $6,305
   Value Added Tax $9,253
   Financing Costs $16,563
   Initial Working Capital $15,666
Total Uses of Fund – $000 $205,700
                                 – PhP 000 10,346,113
Sources of Fund:
   Debt $143,990
   Equity $61,710
Total Sources of Fund $205,700

 

Local and Foreign Cost Components (from individual cost item):

Local Capital   = 59 %

Foreign Capital = 41 %

 

Balance Sheet Accounts:

Receivables = 30 days of revenue

Payables      = 30 days of expenses

Inventory     = 60 days of consumables

 

Imported Capital Equipment:

Customs duty = 0%

Value added tax (VAT) = 12%

VAT recovery = 70% on 5th year of operation

 

Type of input / output VAT = 0 (none)

Type of incentives = 2 (BOI incentives)

 

Tax Assumptions:

Income Tax Holiday (yrs) 7
Income Tax Rate % (after ITH) 10%
Property tax (from COD) 1.5%
Property tax valuation rate (% of NBV) 80%
Local Business Tax 1.0%
Government Share (from COD) 1.0%
ER 1-94 Contribution (PhP/kWh) 0.01
Withholding Tax on Interest (Foreign Currency) – WHT 10%
Gross Receipts Tax on Interest (Local Currency) – GRT 5%
Documentary Stamps Tax (DST) 0.5%
PEZA Incentives (% of gross income) – 0% / 5% 0%
Royalty

 

Capital Structure:

Equity Share = 30% at 16.44% p.a. target equity returns (IRR)

Debt Share   = 70% (59% local, 41% foreign)

 

Debt Terms:

Local & Foreign Upfront & Financing Fees 2.00%
Local & Foreign Commitment Fees 0.50%
Local All-in Interest Rate excluding tax 10.00%
Local Debt Payment Period (from end of GP) (yrs) 10
Foreign All-in Interest Rate excluding tax 8.00%
Foreign Debt Payment Period (from end of GP) (yrs) 10
Local and Foreign Grace Period from COD (mos) 6
Local and Foreign debt Service Reserve (mos) 6

 

Foreign Exchange Rate:

Base Foreign Exchange Rate (PhP/US$) – 2013            48.0000 (construction)

Forward Fixed Exchange Rate (PhP/US$) – 2014           50.2971 (operating)

 

Escalation (CPI):

Annual Local CPI – for OPEX        0.0%            4.0%      for CAPEX (to model construction delay)

Annual US CPI – for OPEX            0.0%            2.0%      for CAPEX (to model construction delay)

 

Results of Financial Analysis:

 

First year tariff (Feed-in-Tariff) = 7.39755 P/kWh = 0.1471 USD/kWh

(at zero equity NPV)

 

Short run marginal cost (SRMC) and Long run marginal cost (LRMC):

Item PhP 000 PhP/kWh
Fuel        10,951,959 1.535
Lubes                8,734 0.001
Var O&M        2,085,235 0.292
Total        13,045,928 1.829
MWh net        7,132,655
SRMC        13,045,928 1.829
Fix O&M        7,453,730 1.045
Capital Cost        32,264,546 4.523
LRMC        52,764,204 7.398

 

Equity Returns: (30% equity, 70% debt)

IRR           = 16.44     % p.a. (target returns)

NPV         = 0.00     ‘000$

PAYBACK = 7.27     years

 

Project Returns: (100% equity, 0% debt)

IRR           = 13.22         % p.a.

NPV         = (1,451,954)   ‘000$ (negative since IRR < 16.44%)

PAYBACK = 6.24         years

——————————————————————————————-

The above runs were based on goal-seek to make equity NPV = 0 (to meet equity IRR target of 16.44% p.a.).

You can perform sensitivity analysis and save the results in a case column (copy paste value).

You can breakdown the tariff ($/kWh) into its capital ($/kW-month) and variable cost recovery ($/kWh) portions.

You can prepare all-in capital cost breakdown showing interest cost during construction and does model the impact of project construction delays.

You can show the evolution of capacity and generation (degradation) during the operating period and show other revenues, expenses and balance sheet accounts as they change over time during operation years.

You can show the income & expense statement.

You can show the cash flow statement.

You can show the balance sheet.

You can show the debt service cover ratio (DSCR) as it computes the cash flow available for debt service.

It also computes the benefits to cost ratio (B/C) of the project.

Finally, it computes the other financial ratios such as:

LIQUIDITY RATIOS

SOLVENCY RATIOS

EFFICIENCY RATIOS

PROFITABILITY RATIOS

MARKET PROSPECT RATIOS

 

Download the sample file below:

Model Inputs and Results – Biomass Cogeneration

 

Download the complete demo model for a biomass power plant in PHP and USD currencies are shown below:

ADV Biomass Cogeneration Model3 – demo5b

ADV Biomass Cogeneration Model3 (USD) – demo5b

 

To purchase the PHP and USD models at a discount (only USD400 for two models), click the link below:

Biomass Cogeneration Project Finance Model Ver. 3 – in USD and PHP Currency

Biomass Gasification Project Finance Model Ver. 3 – in USD and PHP Currency

Biomass IGCC Project Finance Model Ver. 3 – in USD and PHP Currency

Biomass WTE Project Finance Model Ver. 3 – in USD and PHP Currency

Biomass WTE-pyrolysis Project Finance Model Ver. 3 – in USD and PHP Currency

 

You may place your order now and avail of a package for the unlocked model with free guidance on using it. The list price of the biomass model is USD1,400 and I will give you one-hour free for assistance in putting your input data into the model (via telephone or email or FB messenger).

 

Your energy technology selection expert.

Email me for more details and how to order off-line:

energydataexpert@gmail.com

Visit our on-line digital store to order on-line

www.energydataexpert.com

www.energytechnologyexpert.com

 

How to use the advanced (regulator) mini-hydro power plant project finance model

How to use the advanced (regulator) mini-hydro power plant project finance model

(Lord God, bless my website and my readers that they will contribute to my charity fund for the jobless, sickly, needy, homeless, hungry and destitute. God Bless you all my friends for reading my blog and ordering my project finance models. Amen.)

Finding an easy-to-use project finance model for a mini-hydro power plant with built-in data is sometimes difficult as some models don’t have the sophistication of a regulator template model as well as the ease of using the model and viewing immediately the results of a sensitivity change in the inputs to the model.

This is now made easy because the Input & Assumptions worksheet (tab) has combined all the input and output information in a single worksheet and placing the reports in other worksheets such as Tariff Breakdown, Construction Period, Operating Period, Financial Reports and Levelized Tariff.

Following is a sample case study on a mini-hydro power plant. From the preliminary design and cost estimates, the top management would want to know if the business idea of going into mini-hydro power development, construction and operation is worth the effort – is it feasible and what are the economic and financial returns for risking capital.

Here are the inputs and outputs of the advanced template model from OMT ENERGY ENTERPRISES:

——————————————————————————————-

Here are the summary of inputs:

all-in capital cost (overnight cost) = 3,523 $/kW (target cost)

EPC cost portion = 2,434 $/kW (computed by model)

refurbishment cost = 5% of EPC cost on the 12th year (overhaul)

fixed O&M cost = 16.96 $/kW/year (target cost) = 33.94 ‘000$/unit/year (computed by goal seek)

variable O&M cost = 2.40 $/MWh (target cost) = 8.73 ‘000$/MW/year (computed by goal seek)

general admin cost = 20.00 ‘000$/year (target cost)

 

Thermal power plant inputs: (not used in mini-hydro)

Gross heating value of biomass fuel = 5,198 Btu/lb

Plant heat rate = 12,186 Btu/kWh (28.00% thermal efficiency)

Cost of biomass fuel = 1.299 PhP/kg = 1,299 PhP/MT

 

Lube oil consumption rate = 0.54 gram/kWh

Density of lube oil = 0.980 kg/Liter

Cost of lube oil = 200.00 PhP/Liter

 

capacity = 3.60 MW/unit x 1 unit = 3.60 MW

 

Plant Availability Factor, %                                        48.06% (computed by goal seek)

Load Factor, %                                                              92.00% (assumed)

Allowance for losses & own use, %                            2.00% (assumed)

Net Capacity Factor after losses & own use, %       43.33% (target net capacity factor)

Degradation rate, %                                                      0.5%

 

construction period = 24 months (start 2014)

operating period = 25 years (start 2016)

 

Capital cost estimation assumptions and % local cost (LC):

Power plant footprint (ha)                                   1.00

Cost of purchased land (PhP/sqm)                    25.00 (no land lease)

Land cost, $000 $4.97 100.0%
Equipment Cost ex BOP, Transport ($000/MW) $2,064.54 43.0%
Insurance, Ocean Freight, Local Transport, % of Equipment Cost 4.5% 100.0%
Balance of Plant (BOP), % of Equipment Cost 10.0% 80.0%
Transmission Line Distance (km) 3.50
T/L Cost per km, 69 kV ($000/km) $84.00 100.0%
Switchyard & Transformers ($000) $500.00 100.0%
Access Roads ($000/km) $20.00 100.0%
Distance of Access Road (km) 3.50
Dev’t & Other Costs (land, permits, etc) (% of EPC) 2.5% 100.0%
VAT on importation (70% recoverable) 12% 100.0%
Customs Duty 0% 100.0%
Initial Working Capital (% of EPC) 5.0% 100.0%
Contingency (% of Total Cost) 7.5% 50.0%

 

Capital cost breakdown (‘000$): (computed values):

Uses of Fund:
   Land Cost $5
   EPC (Equipment, Balance of Plant, Transport) $8,510
   Transmission Line Interconnection Facility $294
   Sub-Station Facility $500
   Development & Other Costs (Civil Works, Customs Duty) $283
   Construction Contingency $719
   Value Added Tax $569
   Financing Costs $988
   Initial Working Capital $426
Total Uses of Fund – $000 $12,293
                                 – PhP 000 618,317
Sources of Fund:
   Debt $8,605
   Equity $3,688
Total Sources of Fund $12,293

 

Local and Foreign Cost Components (from individual cost item):

Local Capital   = 58%

Foreign Capital = 42%

 

Balance Sheet Accounts:

Receivables = 30 days of revenue

Payables     = 30 days of expenses

Inventory     = 60 days of consumables

 

Imported Capital Equipment:

Customs duty = 0%

Value added tax (VAT) = 12%

VAT recovery = 70% on 5th year of operation

 

Type of input / output VAT = 0 (none)

Type of incentives = 2 (BOI incentives)

 

Tax Assumptions:

 

Income Tax Holiday (yrs) 7
Income Tax Rate % (after ITH) 10%
Property tax (from COD) 1.5%
Property tax valuation rate (% of NBV) 80%
Local Business Tax 1.0%
Government Share (from COD) 1.0%
ER 1-94 Contribution (PhP/kWh) 0.0100
Withholding Tax on Interest (Foreign Currency) – WHT 10%
Gross Receipts Tax on Interest (Local Currency) – GRT 5%
Documentary Stamps Tax (DST) 0.5%
PEZA Incentives (% of gross income) – 0% / 5% 0%
Royalty to NIA 2%

 

Capital Structure:

Equity Share = 30% at 16.44% p.a. target equity returns (IRR)

Debt Share   = 70% (58% local, 42% foreign)

 

Debt Terms:

 

Local & Foreign Upfront & Financing Fees 2.00%
Local & Foreign Commitment Fees 0.50%
Local All-in Interest Rate excluding tax 10.00%
Local Debt Payment Period (from end of GP) (yrs) 10
Foreign All-in Interest Rate excluding tax 8.00%
Foreign Debt Payment Period (from end of GP) (yrs) 10
Local and Foreign Grace Period from COD (mos) 6
Local and Foreign debt Service Reserve (mos) 6

 

Foreign Exchange Rate:

Base Foreign Exchange Rate (PhP/US$) – 2013            48.0000 (construction)

Forward Fixed Exchange Rate (PhP/US$) – 2014           50.2971 (operating)

 

Escalation (CPI):

Annual Local CPI – for OPEX        0.0%            4.0%      for CAPEX (to model construction delay)

Annual US CPI – for OPEX            0.0%            2.0%      for CAPEX (to model construction delay)

 

Results of Financial Analysis:

 

First year electricity tariff (Feed-in-Tariff) = 7.9414 PhP/kWh = 0.1579 USD/kWh

(at zero equity NPV)

 

Short run marginal cost (SRMC) and Long run marginal cost (LRMC):

Item PhP 000 PhP/kWh
Fuel                      – 0.000
Lubes                    36 0.000
Var O&M              39,514 0.123
Total              39,551 0.123
MWh net            321,142
SRMC              39,551 0.123
Fix O&M            258,711 0.806
Capital Cost        2,252,058 7.013
LRMC        2,550,320 7.941

 

Equity Returns: (30% equity, 70% debt)

IRR           = 16.44     % p.a. (target returns)

NPV         = 0.00     ‘000$

PAYBACK = 7.82     years

 

Project Returns: (100% equity, 0% debt)

IRR           = 13.33         % p.a.

NPV         = (87,029)   ‘000$ (negative since IRR < 16.44%)

PAYBACK = 6.37         years

——————————————————————————————-

The above runs were based on goal-seek to make equity NPV = 0 (to meet equity IRR target of 16.44% p.a.).

You can perform sensitivity analysis and save the results in a case column (copy paste value).

You can breakdown the tariff ($/kWh) into its capital ($/kW-month) and variable cost recovery ($/kWh) portions.

You can prepare all-in capital cost breakdown showing interest cost during construction and does model the impact of project construction delays.

You can show the evolution of capacity and generation (degradation) during the operating period and show other revenues, expenses and balance sheet accounts as they change over time during operation years.

You can show the income & expense statement.

You can show the cash flow statement.

You can show the balance sheet.

You can show the debt service cover ratio (DSCR) as it computes the cash flow available for debt service.

It also computes the benefits to cost ratio (B/C) of the project.

Finally, it computes the other financial ratios such as:

LIQUIDITY RATIOS

SOLVENCY RATIOS

EFFICIENCY RATIOS

PROFITABILITY RATIOS

MARKET PROSPECT RATIOS

 

Download the sample file below:

Model Inputs and Results – Mini-hydro

 

Download the complete demo model for a mini-hydro power plant in PHP and USD currencies are shown below:

ADV Mini-Hydro Model3 – demo5b

ADV Mini-Hydro Model3 (USD) – demo5b

 

To purchase the PHP and USD models at a discount (only USD400 for two models), click the link below:

Mini-Hydro Project Finance Model Ver. 3 – in USD and PHP Currency

 

You may place your order now and avail of a package for the unlocked model with free guidance on using it. The list price of the mini-hydro model is USD1,400 and I will give you one-hour free for assistance in putting your input data into the model (via telephone or email or FB messenger).

 

Your energy technology selection expert.

Email me for more details and how to order off-line:

energydataexpert@gmail.com

Visit our on-line digital store to order on-line

www.energydataexpert.com

www.energytechnologyexpert.com