Energy Technology Expert

How to calculate the levelized cost of energy and electricity – sample data and calculations

As promised in my last blog “How to Calculate the Levelized Cost of Energy – a simplified approach”, I am sharing sample data, assumptions and calculations to provide our readers with greater understanding.

The author, your favorite Energy Technology Expert – Mr. Marcial T. Ocampo , has indeed invested tremendous time and resources to bring this blog to the world and the Philippines.

Should the reader/user find the materials, topics, technology briefs, energy data and formulas very useful and would like to continue receiving such useful information, Marcial would like to request the benefited reader to donate or sponsor the continued updating of this blog.

Please keep in touch with Marcial using the contact information at the end of this blog. There is no fixed amount. Marcial would leave it to the good reader the amount of donation he would like to contribute.

Alternatively, you could order the specific topics of interest and use PayPal to effect the payment. Delivery via email will follow for the ordered technology topic.

You could also retain me as consultant in your energy and business development projects and when bidding for NPC/PSALM power plants for sale in the Philippines. Our select group (technology expert, power plant expert, financial modeling expert and legal expert) will conduct a legal and technical due diligence of the power plant for sale, prepare the technical, economic and financial inputs to a detailed project finance model for estimating the value of the power plant. In this way, you will enhance the chance of your company winning the bid and start operating your own power plant in the Philippines.

Thank you so much. Keep on reading!

ASSUMPTIONS:

Franchise Tax = 2.0% of revenue

Business Tax = 0.005% of revenue

DOE 1-94 Fee = 0.01 PhP/kWh sold

Corporate Income Tax = 35% of taxable income

Hours Per Year = 24 * 365 = 8,760 hours/year

Equity = 30%

Debt = 70%

Minimum Equity IRR = 15% p.a.

Debt Interest = 12% p.a.

Weighted Average Cost of Capital (WACC) = 30% x 15% p.a. + 70% x 12% p.a.

= 12.9% p.a.

Discounting Rate = WACC = 12.9% p.a.

Exchange Rate = 48.46 PhP/US$ (April 21, 2009)

Diesel Price = 25.45 PhP/Liter = 83.51 US$/bbl

(19,650 BTU/lb HHV, 18,453 BTU/lb LHV, 0.820 kg/Liter)

Bunker Price = 17.90 PhP/Liter = 58.72 US$/bbl

(18,400 BTU/lb HHV, 17,449 BTU/lb LHV, 0.92 kg/Liter)

Natural Gas Price = 6.00 US$/MMBTU

(20,754 BTU/lb HHV, 18,798 BTU/lb LHV)

Orimulsion Price = 50% of Bunker Price

(13,330 BTU/lb HHV, 12,384 BTU/lb LHV)

Coal Price = 85 US$/MT

(11,630 BTU/lb HHV, 11,105 BTU/lb LHV)

Biomass Price = 10% of Bunker Price

(3,591 BTU/lb HHV, 3,020 BTU/lb LHV)

Nuclear Fuel Price = (365 fuel + 400 fabrication) = 765 $/kg

(3,900 GJ/kg)

CONVERSION FACTORS:

1 kg = 2.2046 lb

1 MT = 1,000 kg

1 US gal = 3.7854 Liters

1 bbl = 42 US gal = 42 x 3.7854 = 158.9868 Liters

1 kWh = 3,600 kJ

1 BTU = 1.05506 kJ

1 GJ = 1,000,000 kJ

1 MMBTU = 1,000,000 BTU

SAMPLE DATA FOR CALCULATING LEVELIZED COST (DOWNLOAD FILE) [last update: may 11, 2009)

The input data are summarized inside the word document file.

——————————————————-

Questions:

• What is the levelized cost of electricity for your various power plants in your country?
• What is your energy mix (MWh or GWh or %)?
• What is your weighted average levelized cost of electricity in your country?
• If you include a nuclear power plant, what is the resulting weighted average levelized cost of electricity?
• How does it compare with your neighboring country with nuclear power plants?
• Does it lower your average cost?

Please leave your comments and suggestions.

I would like to invite you and your company to continue supporting this blog thru the DONATE button.  You may order my power generation technology articles and project finance models thru the ENERGY DATA page. Thanks!

Marcial T. Ocampo

(Friendly note: All content written by Engr. Marcial T. Ocampo are copyrighted and may not be redistributed in any way or form.)