Feed-in Tariff Models for Renewable Energy – biomass, cogen, mini-hydro, wind, solar and ocean thermal (OTEC)
April 29th, 2010 Posted in feed-in tariff
Feed-in Tariff Models for Renewable Energy – biomass, cogen, mini-hydro, wind, solar and ocean thermal (OTEC)
Renewable energy feed-in tariffs for biomass, biomass cogen, mini-hydro or run-of-river hydro, wind, solar PV and ocean thermal energy conversion (OTEC) have been calculated using a project finance model prepared for the National Renewable Energy Board (NREB) by Marcial Ocampo – your favorite energy technology expert.
Using standard assumptions of supplier FOB, the all-in capital cost is calculated. The summary sheet of the model then summarizes the assumptions and results.
Marcial Ocampo
Energy & Business Development Consultant
The summary sheet of the model is shown below:
| Executive Summary | |||
| WIND POWER PLANT | |||
| Investors’ Returns: | NPV-FC | ||
| Equity IRR (% p.a.) | 16.00% | ||
| Payback Period (years) | 6.45 | ||
| Uses and Sources of Funds During Construction: | 000 US$ | $ / kW | |
| Uses of Funds: | |||
| Total Investment in Land (10 PhP/sqm) x (10,000 sqm/ha) | 4.26 | $0 | |
| Freight on Board = FOB USA = $/kW | 45,000.00 | $1,500 | |
| Ocean Freight = FRT = 5% x FOB | 2,250.00 | ||
| Insurance = INS = 1% x FOB | 450.00 | ||
| Cargo, Insurance & Freight = CIF = FOB + FRT + INS | 47,700.00 | ||
| Value Added Tax = VAT = 12% x CIF | 5,724.00 | ||
| Customs Duty = (CIF + VAT) x (% Duty) x (1 + % VAT) | 0.00 | ||
| Duty-Paid Landed Cost = DPLC = CIF + VAT + Duty | 53,424.00 | ||
| Local Freight Cost = LFC = 3% x CIF | 1,431.00 | ||
| Delivered Cost at Site = DCS = DPLC + LFC | 54,855.00 | ||
| Installation Cost = IC = 5% x FOB | 2,250.00 | ||
| Transmission line cost 69 kV (2,000,000 PhP/km) = T/L | 851.06 | ||
| Total EPC = DCS + IC + T/L | 57,956.06 | ||
| Contingency (10%) = EPC x 10% | 5,795.61 | ||
| Documentary Stamps (1%) = EPC x 1% = DS | 579.56 | ||
| Total Fixed Assets (EPC + Contingency + DS) | 64,331.23 | $2,144 | |
| Capitalized Expenses: | |||
| Development costs (developer, modeler) | 1,286.71 | ||
| Other Costs including taxes, contingencies | 0.00 | ||
| Carbon Emission Registration & Consultancy | 30.00 | ||
| Total Investment in Capitalized Expenses | 1,316.71 | $44 | |
| Working Capital: | |||
| months | |||
| Working capital (adjustment to meet DSCR = 1.1) | 0.00 | ||
| Expenses from fuel consumption | 0.00 | 2 | |
| Maintenance of wind turbine/generator (spares) | 1.13 | 2 | |
| Utilities (fuel, lubes, electricity, water) | 2.54 | 3 | |
| Maintenance of the rest of the plant | 244.52 | 3 | |
| Personnel expense | 244.52 | 3 | |
| Land lease, rent | 1.33 | 1 | |
| Taxes, Insurance, services, and others | 32.60 | 1 | |
| Transport | 16.30 | 1 | |
| Total Working Capital | 542.95 | $18 | |
| Interest During Construction (IDC): | |||
| Dev’t fees (developer, loan arranger) | 661.95 | ||
| Front end fees (modeler, loan arranger) | 661.95 | ||
| Commitment fees (bank) | 330.98 | ||
| Interest During Construction (bank) – 12 months | 5,295.61 | ||
| Total Legal & Financing Fees and IDC | 6,950.49 | $232 | |
| Total Uses of Fund, ’000 US$ | 73,145.64 | $2,438 | |
| Sources of Fund: | |||
| % to be financed by capital | 21,943.69 | 30.00% | |
| % to be financed by non refundable subsidy | 0.00 | 0.00% | |
| % to be financed by debt | 51,201.95 | 70.00% | |
| Total Sources of Fund, ’000 US$ | 73,145.64 | 100.00% | |
| Weighted Average Cost of Capital (WACC): | Returns | ||
| Equity | 16.00% | 30.00% | |
| Subsidy | 0.00% | 0.00% | |
| Debt | 10.00% | 70.00% | |
| WACC | 11.80% | ||
| Rated Capacity: | |||
| Unit Capacity of WTG (MW/unit) | 2.000 | ||
| No. of TWG (unit) | 15 | ||
| Total Gross Installed Capacity (MW) | 30.000 | ||
| National Renewable Energy Board | |||
| Feed-in Tariff (FiT) Calculation Procedure | |||
| Generation and Sales: | |||
| Capacity Factor (% of rated) | 25.00% | ||
| Days per year | 365 | ||
| Hours per day | 24 | ||
| Gross Generation (MWh/year) | 65,700 | ||
| Power Plant Own Use (%) | 5.000% | ||
| 3,285 | |||
| Net Generation (MWh/year) | 62,415 | ||
| Transmission Line Loss assumed (%) | 3.000% | ||
| 1,872 | |||
| Net Sales (MWh/year) | 60,543 | ||
| Transmission Line: | |||
| Line Voltage | 69 | kV | |
| Power | 30,000 | kW | |
| Length | 20.000 | km | |
| Power Factor | 0.850 | lag | |
| No. of Circuit | 3 | ||
| Transmission Line Loss calculated (%) | 1.365% | ||
| Cost per km: | 2,000,000 | PhP | |
| 42,553 | $ | ||
| Capital and O&M Cost Assumptions: | |||
| First Year Tariff (PhP/kWh) | 12.3868 | ||
| Cost per kW FOB USA ($/kW) | 1,500 | ||
| Variable O&M ($/kWh): | 0.000267 | ||
| Maintenance of wind turbine/generator (spares) | 6.77 | 000 US$ | |
| Utilities (fuel, lubes, electricity, water) | 10.16 | 000 US$ | |
| Fixed O&M ($/kW/year): | 0.0853 | ||
| Maintenance of the rest of the plant | 978.09 | 000 US$ | |
| Personnel expense | 978.09 | 000 US$ | |
| Land lease, rent | 15.96 | 000 US$ | |
| Taxes, Insurance, services, and others | 391.24 | 000 US$ | |
| Transport | 195.62 | 000 US$ | |
| Debt Service Reserve Fund: | |||
| Months of debt service | 6 | ||
| DSRF Income -interest on Foreign Currency Deposit | 4.0% | ||
| Withholding Tax on Foreign Currency Deposit | 7.5% | ||
| DSRF Expense | 0.30% | ||
| Taxes and Regulatory Costs: | |||
| Special Privilege Tax – 2% | 1.00% | ||
| Special Realty Tax – 2.5% | 1.50% | ||
| DOE 1-94 : 0.01 PhP/kWh sales | 0.01 | ||
| Corporate income tax rate (% of taxable income) | 10% | ||
| Income tax holiday (ITH), years | 7 | ||
| Profit Sharing, % of IAT | 0.00% | ||
| Social Benefit Fund – Host Community, PhP/month | 0 | ||
| Working Capital Needs: | months | ||
| Cash needed for operations (+) | 3.00 | ||
| Customers / Receivables (+) | 1.00 | ||
| Stocks / Inventory (+) | 2.00 | ||
| Suppliers / Payables (-) | 1.00 | ||
| Exchange Rate and Escalation: | 0 | No Escalation | |
| Exchage Rate, PhP / US$ | 47.00 | 0.00% | depreciation |
| RP CPI (Local) | 5.00% | local escalation | |
| US CPI (Foreign) | 2.50% | foreign escalation | |
| Variable O&M: | weight | 0.00% | variable escalation |
| % Local (30%) | 50.00% | 5.00% | |
| % Foreign (70%) | 50.00% | 2.50% | |
| Fixed O&M: | weight | 0.00% | fixed escalation |
| % Local (70%) | 50.00% | 5.00% | |
| % Foreign (30%) | 50.00% | 2.50% | |
| Loan: | |||
| Interest rate of debt, % p.a. | 10.00% | ||
| Loan term, years | 12 | ||
| Grace period (construction period), months | 12.00 | ||
6 Responses to “Feed-in Tariff Models for Renewable Energy – biomass, cogen, mini-hydro, wind, solar and ocean thermal (OTEC)”
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