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Economic Model (Project Finance Model) for a CFB Power Plant (coal, biomass)

February 24th, 2016 Posted in financial models

Economic Model (Project Finance Model) for a CFB Power Plant (coal, biomass)

I am pleased to announce the availability of a new project finance model for a CFB power plant that can burn both coal and biomass.

The model accepts the following information:

Project Site Name & Location – technology 30 mw
Renewable Energy Source – fuel Biomass
Hours per Year 8760
Timing
Construction Period (from FC) (mos) – max 60 mos (5 yrs) 24
Operating Period (yrs from COD) – max 30 yrs 25
Yrs from base year CPI & Forex (2015) for FIT 1
Yrs from base year CPI (2016) for CAPEX 0
Yrs from base year CPI (2016) for OPEX 0
Construction Sources and Uses of Funds, $000 30 MW
Uses of Fund:
   Land Cost $543
   EPC (Equipment, Balance of Plant, Transport, Access Roads) $46,003
   Transmission Line Interconnection Facility $40
   Sub-Station Facility $800
   Development & Other Costs $3,880
   Construction Contingency $2,029
   Value Added Tax $3,846
   Financing Costs $3,553
   Initial Working Capital $5,060
Total Uses of Fund – $000 $65,754
                                 – PhP 000 3,024,702
Sources of Fund: PRESS ctrl + g to converge CAPEX
   Debt $46,028
   Equity $19,726
Total Sources of Fund $65,754
$123,420
Construction Unit Costs (US$/kW): 5,677,320
   EPC Cost $1,533
   Plant Cost (Excluding VAT, Financing, Working Capital) $1,758
   All-in Project Cost $2,192
Target EPC Cost $1,500
Variance $33
Model Check:
Balance Sheet OK
Foreign Debt Amortization OK
Local Debt Amortization OK
Depreciation OK
Sources and Uses of Funds OK
Debt-to-Equity Ratio OK
Base Years and Commercial Operating Date
Base year CPI & Forex for FiT 2015
Base year CPI for CAPEX 2016
Base year CPI for OPEX 2016
Commercial Operating Date 2017
Payback Period, years
Equity Payback (30% equity, 70% debt) 4.74
Project Payback (100% equity, 0% debt) 6.91
Deterministic Model 1  
Technical and EPC Assumptions
Unit Capacity of Plant (MW/unit) 15.000 Days Down
No. of Units (unit) 2 10
Gross Installed Capacity (MW) 30.00 25.16
Plant Availability Factor, % 97.26%
Guaranteed Efficiency Factor, % 98.00%
Allowance for losses & own use, % 12.00% Gross
Net Capacity Factor after losses & own use, % 83.88% 95.3%
Net Electrical Output (MWh in 1st year) 220,429 250,488
Plant Degradation, % p.a. (1-20 yrs) 0.2% % LC
Land cost, $000 $543.48 100.0%
Equipment Cost ex BOP, Transport ($000/MW) $1,217.00 15.0%
Insurance, Ocean Freight, Local Transport, % of Equipment Cost 5.0% 100.0%
Balance of Plant (BOP), % of Equipment Cost 21.0% 100.0%
Transmission Line Distance (km) 1.00
T/L Cost per km, 69 kV ($000/km) $40.00 100.0%
Switchyard & Transformers ($000) $800.00 100.0%
Access Roads ($000/km) $200.00 100.0%
Distance of Access Road (km) 1.00
Dev’t & Other Costs (land, permits, etc.) (% of EPC) 8.0% 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%
Press ctrl + e to converge NPV to zero 271,499
Operating Assumptions Equity IRR
Feed-in-Tariff (PhP/kWh) – 6.63 FIT (250 MW) 5.200 21.23%
Duration of FiT (yrs) 20 Project IRR
Tariff post FiT period (PhP/kWh) 6.200 13.00%
FiT using Asset Base Methodology (PhP/kWh) 5.351 (501,286)
Annual CER Volume (tCO2e/year) and $/tCO2e – not used 5.351
Salvage value, % 5%
O&M Cost ($000/unit/year) – fix $500.00 fix
Spare Parts, Tools & Equipment ($000/MW/year) – var $10.00 var
O&M + Spares as % of EPC, T/L, S/S 2.78%
Refurbishment Cost (% of EPC) – 4 x 2% 8%
Timing of Refurbishment (Year from COD) – every 5 years 5
G&A ($000/year) – fix $100.00 fix
Fuel Cost (switch for Biomass: 1=yes, 0=no) 1 $/MT
Average Fuel Cost (PhP/mt)          3,022.40 $65.70
Fuel Rate (kWh/mt)          1,343.03
Average Fuel Consumption (mt/year)          182,033 net
Average Unit Cost of Fuel (PhP/kWh) – gross              2.877 3.270
Receivables, Payables, Inventory, VAT and Incentives receivable payable
Days Receivable, Payable and Inventory 20 20
VAT Recovery, % 70% inventory
Timing of VAT recovery (yrs after COD) 5 45
Type of incentives (1 = NO, 2 = BOI, 3 = PEZA) 2 BOI
Fuel Heating Value, Plant Thermal Efficiency and Cost 0 NO VAT
Gross Heating Value 7,978 Btu/lb
2.2046 lb/kg
1000 kg/MT
17,587,528 Btu/MT
Plant Thermal Efficiency, % (Biomass Cogeneration) 26.06% of GHV
Plant Heat Rate 3600 kJ/kWh
1.05506 kJ/Btu
3,412 Btu/kWh
13,095 Btu/kWh
Fuel Rate 1,343.03 kWh/MT
Cost of Fuel – gross 3,022.40 PhP/MT
1,343.03 kWh/MT
             2.250 PhP/kWh
Density of liquid fuel 1000 kg/MT
Cost per kg 3.022 PhP/kg
Lube oil density 0.980 kg/L
Specific lube oil consumption 0.500 g/kWh
Lube oil rate 0.0005 L/kWh
Lube oil cost 200.000 PhP/L
1 Btu 1.05506 kJ
1 kcal 4.1868 kJ
1 kWh 3600 kJ
1 kg (metric) 2.2046 lb
Heating value of coal 4,500 kcal/kg
18,841 kJ/kg
8,100 Btu/lb
Fuel Cost (coal) 2,990 PhP/MT
Heating value of bagasse 2,800 kcal/kg
11,723 kJ/kg
5,040 Btu/lb
Fuel Cost (bagasse) 3,800 PhP/MT
Ave. Heating value of fuel 4,432 kcal/kg
18,556 kJ/kg
7,978 Btu/lb
Ave. Fuel Cost 3,022 PhP/MT
Annual generation (gross) 250,488 MWh/yr
250,488,000 kWh/yr
Heat rate (gross) 3,300 kcal/kWh
13,095 Btu/kWh
Heat requirement (gross) 8.2661E+11 kcal/yr
Fuel heating value (gross) 4,500 kcal/kg
Annual fuel consumption 183,691,200 kg/yr
183,691 MT/yr
Coal consumption 523.23 MT/day coal
Limestone consumption 17.52 MT/day lime
0.0335 MT/MT coal
Limestone cost 171.00 PHP/MT lime
Start-up diesel consumption 12,800 L/year diesel
Diesel cost 43.00 PHP/L diesel
Water consumption 384.00 m3/day water
Water cost 22.00 PHP/m3 water
   
Debt and Equity Assumptions
Local/Foreign Capital Mix:
Local Capital 48.5%
Foreign Capital 51.5%
Debt:
Local & Foreign Upfront & Financing Fees 2.00%
Local & Foreign Commitment Fees 0.50%
Local All-in Interest Rate excluding tax 8.00%
Local Debt Payment Period (from end of GP) (yrs) 12
Foreign All-in Interest Rate excluding tax 4.00%
Foreign Debt Payment Period (from end of GP) (yrs) 12
Local and Foreign Grace Period from COD (mos) 24
Local and Foreign debt Service Reserve (mos) 6
Debt Ratio 70%
Total Local Debt ($000)     – 48.5 % $12,149
Total Foreign Debt ($000)   – 51.5 % $33,879
   Total Debt Amount ($000) – 100 % $46,028
Equity: 16.44%
Equity Ratio 30%
Equity Investment $19,726
Cost of Equity (Onshore Equity IRR) – Nominal 21.23%
Cost of Equity (Onshore Equity IRR) – Real 18.85%
 
WACC pre-tax 10.61%
WACC after-tax 9.55%
WACC 9.09%
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
Economic Assumptions
Base Foreign Exchange Rate (PhP/US$) – 2015 46.0000
Forward Fixed Exchange Rate (2016) 46.0000
Base Local CPI – 2015 160.00
Annual Local CPI – for OPEX 2.0%
Annual US CPI – for OPEX 2.0%
Annual Peso Depreciation Rate 0.0%

 

To use the model, simply do the following steps:

Update the blue cells/blue fonts and the red flags to define the problem and model switches

Then use the following macros to automate the calibration of the model (to set overnight capital cost $/kW, fixed O&M cost $/kW/year and variable O&M cost $/MWh, and converging the NPV to zero by varying the first year tariff (feed-in-tariff for RE projects or electricity price for non-RE projects) such as diesel, oil thermal, coal thermal, petcoke thermal, gas thermal, geothermal, combined cycle GT, simple cycle GT, ocean thermal (OTEC), solar PV, wind (off-shore, on-shore), mini-hydro, large hydro, pumped hydro, and nuclear (PHWR).

 

Step 1 – Press ctrl + f to calibrate model with US EIA (optional) Macro2
Step 2 – Press ctrl + g to calibrate capex with target all-in capital cost (optional) Macro4
Step 3 – Edit blue inputs and red fields (changed by macro to calibrate model)
Step 4 – Select tax and incentives regime (NO, BOI, PEZA)
Step 5 – Press ctrl + e to converge NPV to zero by varying first year tariff Macro1
Step 6 – View Construction, Operating Period and Financial reports
Step 7 – The capex fee, fixed fee and variable fee are shown in Tariff Breakdown tab

 

You may download the sample inputs & assumptions worksheet.

 

Model Inputs and Results – Copy

 

Please email me for sample (locked) model and price list at:

 

energydataexpert@gmail.com

 

Thanks,

Energy Expert

 

 

 

 

 

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