Input Data for Calculating Feed-in Tariff (FiT) for Renewable Energy

March 10th, 2010 Posted in feed-in tariff, financial models

Input Data for Calculating Feed-in Tariff (FiT) for Renewable Energy

Your energy technology selection expert and author of this blog has standardized the input data requirements for calculating feed-in tariff (FiT) for Renewable Energy (RE) sources such as biomass, cogen, mini-hydro, wind and solar.

Please refer to the snippet of the input worksheet below.

Thanks,

Marcial T. Ocampo

Energy Technology Selection & Business Development Consultant

———————————

Instructions for Running this Project Finance Model (by Marcial T. Ocampo) – US Dollar Model						Licensed for:	National Renewable Energy Board
Enter the required data starting from the first step to the last step, then converge the model by pressing ctrl + u							press ctrl + u to converge model (DCF IRR)

0)	1	Select DCF IRR (1) or RORB (0)					Blue cells are input fields for updating					used
	0	Include Carbon Emission Credits (1), no CER (0)					These cells are case switches					used
	0	Include Depreciation (1), no depreciation (0)										used

1)	3	Define the NPV and return IRR to be used (1-3).										used
	0	NPV-ROI	return on investment (100% equity, 0% debt) – project cost versus cash flow
	0	NPV-ROE	return on equity (say 30% equity, 70% debt) – equity portion of project cost versus cash flow
	1	NPV-FC	return on equity (say 30% equity, 70% debt) – equity portion of project cost versus dividends flow (free cash) – default

	47.00	Exchage Rate, PhP / US$										used
2)	5.00%	RP CPI	Philippine escalation rate, % p.a.									used
	2.50%	US CPI	US escalation rate, % p.a.									used

3)	2009	Define the end of construction period (year 0).	It assumes everything has been constructed and finished at the end of this year (0) and will operate on following year (1).									used

4)		Rated Capacity and Losses	Unit Capacity	No. of Units
	34.000	Rated Capacity (RC), MW	17.000	2								used
	10.00%	Power Plant Own Use										used
	3.00%	Transmission Line Losses (10 km line)	Select red cells below for T/L losses									used

		Transmission Line Losses
		Line Voltage	69	kV		km	1.609
		Power	34,000	kW		mile	1
		Length	10.00	km		feet	5280
		Power Factor	0.85	lag
		Total Line Current	334.696	A		resistivity of Al	20	17.002	ohm-cmil/ft
		Line Current/Circuit	111.565	A			25	17.345	ohm-cmil/ft
		No. of Circuit	3

		Transmission Line							Cost of T/L	Cost of T/L	With 50%
	Used	Conductor Type	Ampacity	Resistance (ohms/mile)			Loss (3-phase)*		$ / km	PhP / km	allowance
		ACSR (MCM)	A	25 deg.C	50 deg.C	90 deg.C	kW	%
	0	336	530	0.278	0.306	0.351	632.29	1.860%	$25,532	1,200,000	2.79%	used
	0	795	900	0.119	0.138	0.168	302.59	0.890%	$29,787	1,400,000	1.33%	used
		AAC (MCM)	A	20 deg.C	25 deg.C	90 deg.C	kW
	0	336	495	0.267	0.273	0.343	617.57	1.816%	$34,043	1,600,000	2.72%	used
	1	789	855	0.114	0.116	0.146	263.00	0.774%	$42,553	2,000,000	1.16%	used
		USED						0.774%	$42,553	2,000,000	1.16%	used

5)		Capacity Factor (365 days, 5 year cycle)		1	2	3	4	5	Average
	56	Planned Overhaul, days (8 wks)						56
	28	Regular Maintenance, days (4 wks)		28	28	28	28
	0.10%	Economic S/D, % of CD		0.365	0.365	0.365	0.365	0.365
	0.50%	Deactivated S/D – External, % of CD		1.825	1.825	1.825	1.825	1.825
	8.00%	Forced Outage – Internal, % of CD		29.2	29.2	29.2	29.2	29.2
	90.00%	Load Factor, % of DC		59.39	59.39	59.39	59.39	87.39	64.99	vary load factor to hit 75%
	75.00%	Capacity Factor, % of RC		305.61	305.61	305.61	305.61	277.61	300.01
		CD = Calendar Days (365 days per year)		84.89%	84.89%	84.89%	84.89%	77.11%	83.34%
		RC = Rated Capacity, MW		90.00%	90.00%	90.00%	90.00%	90.00%	90.00%
		DC = Dependable Capacity, MW (after degradation)		76.40%	76.40%	76.40%	76.40%	69.40%	75.00%			used

6)		Define overhaul cycle and capacity degradation
	0.50%	Normal, % p.a.	normal degradation rate									used
	-2.00%	Overhaul, % p.a.	degradation recovered after overhaul									not-used
	5	Overhaul Cycle, yr	overhaul cycle									not-used
	80.00%	Recovery, %	fraction of normal degradation recovered during overhaul									not-used

7)		Define overhaul cycle and heat rate degradation
	0.50%	Normal, % p.a.	normal degradation rate									used
	-2.00%	Overhaul, % p.a.	degradation recovered after overhaul									not-used
	5	Overhaul Cycle, yr	overhaul cycle									not-used
	80.00%	Recovery, %	fraction of normal degradation recovered during overhaul									not-used

8)	3	Plant Heat Rate (enter type of engine, 1-3)	1=CCGT	2=Diesel	3=Thermal
GT		Gas Turbine Output (1 / 3)	33.33%	40.00%
ST		Steam Turbine Input (2 / 3)	66.67%
BE		Boiler Efficiency at 1% cont. BD	85.00%		80.00%
STE		Steam Turbine Efficiency	40.00%		35.00%
ME		Mechanical Drive / Clutch Efficiency	99.00%	97.00%	95.00%
GE		Generator Efficiency	98.00%	96.00%	94.00%
OE	25.00%	Overall Efficiency=(GT+STBESTE)MEGE	54.33%	37.25%	25.00%							used
		Plant Heat Rate at 100% eff. (3600 / 1.05506), Btu/kWh	3412.12822
PHR		Plant Heat Rate, Btu / kWh = 3412/ OE	6,280	9,160	13,649
			0	0	1


9)		Define fuel properties	GHV, Btu/lb	NHV, Btu/lb	GHV / NHV	kg / Liter	Btu/liter	Reference	$/MMBtu	PhP / liter 2009
	0.00%	Natural Gas (Malampaya Gas) – main fuel	22,129	20,249	1.093	2009	$GJ	8.628	9.10	405.52	PhP/GJ	not-used
	0.00%	Diesel Oil – backup fuel (gas pipeline downtime)	19,650	18,453	1.065	0.8448	36,597	46.44	17.44	30.00	PhP/liter	not-used
	0.00%	Low Sulfur Fuel Oil (LSFO – 1% S) – boiler fuel	18,400	17,449	1.055	0.9659	39,181	35.97	12.62	23.24	PhP/liter	used
	0.00%	Bunker Fuel Oil (BFO – 3% S) – boiler fuel	19,670	18,565	1.060	0.8916	38,664	34.84	12.39	22.51	PhP/liter	not-used
	0.00%	Coal (Lignite, Bituminous, Anthracite) – thermal	10,000	9,475	1.055			$85.00	3.86	4.00	PhP/kg	not-used
	100.00%	Biomass (Solid Waste, Woodwaste, Landfill Gas, Biogas)	4,000	3,463	1.155			8.70%	4.88	2.02	PhP/kg	used
		Lube Oil				0.8500		232.00		149.87	PhP/liter	not-used
			3600	kJ/kWh		2.2046	lb/kg		1.05506	kJ/Btu		used
						1000	kg/MT					used
10)		Lube Oil Consumption
	0.50%	Normal, % p.a.	normal degradation rate									not-used
	-2.00%	Overhaul, % p.a.	degradation recovered after overhaul									not-used
	5	Overhaul Cycle, yr	overhaul cycle									not-used
	80.00%	Recovery, %	fraction of normal degradation recovered during overhaul									not-used
	0.254	Ideal Lube Oil Consumption, g/kWh										not-used

11)	0	Escalate fuel, lubes, tariff and O&M costs? (1=yes, 0=no)	Used
	3.00%	Natural Gas (Malampaya Gas) – main fuel	0.00%									not-used
	3.50%	Diesel Oil – backup fuel (gas pipeline downtime)	0.00%									not-used
	2.50%	Low Sulfur Fuel Oil (LSFO – 1% S) – boiler fuel	0.00%	biomass price is tied-up to LSFO price								used
	2.00%	Bunker Fuel Oil (BFO – 3% S) – boiler fuel	0.00%									not-used
	2.00%	Coal (Lignite, Bituminous, Anthracite) – thermal	0.00%									not-used
	2.50%	Biomass (Solid Waste, Woodwaste, Landfill Gas, Biogas)	0.00%									not-used
	5.00%	Lube Oil	0.00%									not-used


12)	% p.a.	Escalation rates for tariff and O&M costs	Used	Foreign (US)	US CPI	Local (RP)	RP CPI
	3.25%	Purchase of chemical materials	0.00%	70.00%	2.50%	30.00%	5.00%	variable O&M				used
	3.25%	Utilities (fuel, lubes, electricity, water)	0.00%	70.00%	2.50%	30.00%	5.00%	variable O&M				used
	3.25%	Maintenance of the installation	0.00%	70.00%	2.50%	30.00%	5.00%	variable O&M				used
	4.25%	Personnel expense	0.00%	30.00%	2.50%	70.00%	5.00%	fixed O&M				used
	4.25%	Land lease, rent	0.00%	30.00%	2.50%	70.00%	5.00%	fixed O&M				used
	4.25%	Taxes, Insurance, services, and others	0.00%	30.00%	2.50%	70.00%	5.00%	fixed O&M				used
	4.25%	Transport	0.00%	30.00%	2.50%	70.00%	5.00%	fixed O&M				used

13)		Define electricity sales & revenues	Factor	Adjustment
	70.00%	Electricity sales to DU, MWh	1.000	0.00%	discount price to direct customers (e.g. -10%)							not-used
	20.00%	Electricity sales to NPC, MWh	1.000	0.00%	reference price to national grid (e.g. 0%)							not-used
	10.00%	Electricity sales to WESM, MWh	1.000	0.00%	wholesale spot market price (e.g. +15%)							not-used
	100.00%	Total must add to 100%

	000 US$	Byproduct Sales	PhP/year	Escalation
	0	Initial amount of sales of by-products, ’000 US$	0	0.00%								used
	0	Other operating income from the plant, ’000 US$	0	0.00%								used
						for cogen only		for biomass
14)	months	Define working capital for initial project cost (months)	000 $/year	Working Capital		PSMA		Paul Breeze
	2	Expenses from biomass purchase	14,871	2,479				not-used				used
	2	Purchase of chemical materials	3,327	555	variable O&M	0.700	PhP/kWh	0.00520	$/kWh			used
	3	Utilities (fuel, lubes, electricity, water)	0	0								used
	3	Maintenance of the installation	4,021	1,005	fixed O&M	0.846	PhP/kWh	0.4300	$/kW/year			used
	3	Personnel expense	0	0								used
	1	Land lease, rent	0	0		land lease from NorthWind						used
	1	Taxes, Insurance, services, and others	0	0	ha	PhP	PhP/yr	$/yr				used
	1	Transport	0	0	100	7,500	750,000	15,957				used
		Total working capital	22,219	4,038

15)		Total Regulatory Expenses
	1.00%	Special Privilege Tax – 2%	of Electricity Revenue									used
	1.50%	Special Realty Tax – 2.5%	of Depreciated Project Cost									used
	0.01	DOE 1-94 : 0.01 PhP/kWh sales	PhP/kWh sales									used

16)		Define corporate income tax rate and income tax holiday
	10%	Corporate income tax rate (% of taxable income)										used
	7	Income tax holiday (ITH), years										used

17)		Expenses not eligible for income tax deduction			sample data
	0.00%	Profit Sharing	of income after tax		5.00%	not used						used
	0	Social Benefit Fund – Host Community	per month		10,000	not used						used

18)		Calculation of Working Capital Needs (WCN)
	3.00	Cash needed for operations (+)	months of expenses									used
	1.00	Customers / Receivables (+)	months of revenue									used
	2.00	Stocks / Inventory (+)	months of fuel & chemicals									used
	1.00	Suppliers / Payables (-)	months of payables									used

19)	47.00	Estimate all-in capital cost						check variance	PhP/sqm	sqm/ha
	$4	Initial investment in land (10 PhP/sqm) x (10,000 sqm/ha)	$2,128	68	ha	145		-	10	10000		used
		Freight on Board = FOB USA = $/kW	$1,900	34.000	MW	64,600		-				used
		Ocean Freight = FRT = 5% x FOB	5%			3,230		-				used
		Insurance = INS = 1% x FOB	1%			646		-				used
		Cargo, Insurance & Freight = CIF = FOB + FRT + INS				68,476		-				used
		Value Added Tax = VAT = 12% x CIF	12%			8,217		-				used
		Customs Duty = (CIF + VAT) x (% Duty) x (1 + % VAT)	0%			0		-				used
		Duty-Paid Landed Cost = DPLC = CIF + VAT + Duty				76,693		-				used
		Local Freight Cost = LFC = 3% x CIF	3%			2,054		-				used
		Delivered Cost at Site = DCS = DPLC + LFC				78,747		-				used
		Installation Cost = IC = 5% x FOB	5%			3,230		-				used
		Transmission line cost 69 kV (2,000,000 PhP/km) = T/L	$42,553	10.0		425.53		-				used
		Total EPC = DCS + IC + T/L				82,402.93		-				used
		Contingency (10%) = EPC x 10%	10%			8,240		-				used
		Documentary Stamps (1%) = EPC x 1% = DS	1%			824		-				used
	$2,690	Total Fixed Assets (EPC + Contingency + DS)				91,467		-				used
		Depreciation term (years)	salvage value	10.00%	4,116	20	91,612	-				used
		Development costs (modeler)		0.50%		458		-				used
		Other Costs including taxes, contingencies		0.00%		-		-				used
		Carbon Emission Registration & Consultancy				-		-				used
	$13	Initial investment in capitalized expenses				4,496	458	-				used
		Amortization term (years)	salvage value	10.00%	202	20		-				used
		Working Capital:						-				used
	0.239	Working capital (adjustments for DSCR = 1.1)	1.100	1.339		–		-				used
		Expenses from biomass purchase				2,479		-				used
		Purchase of chemical materials				555		-				used
		Utilities (fuel, lubes, electricity, water)				0		-				used
		Maintenance of the installation				1,005		-				used
		Personnel expense				0		-				used
		Land lease, rent				0		-				used
		Taxes, Insurance, services, and others				0		-				used
	$119	Transport			4,038	0	96,108	-				used
		Interest During Construction:						-				used
		Dev’t fees (loan arranger)		0.50%		481		-				used
		Front end fees (loan arranger)		0.50%		481		-				used
	$466	Commitment fees (bank)		0.50%		481		-				used
		Interest During Construction (bank) – 36 months	18	10.00%		14,416	15,858	-				used
		Amortization term (years)	salvage value	10.00%	714	20		-				used
	$3,293	Total Investment (land, fixed, capitalized expenses, working capital)				111,966		-				used

20)		Taxes, Insurances, Benefits & Regulatory Costs	based on 47.00 PhP/US$
		Real Property Tax – Land	1.60%	of land		NOTE: Differentiate between one time, cyclic (every 2 or 5 years) and recurring (annual)						not-used
		Real Property Tax – PPE	1.60%	of fixed assets		and vary the formula in the Main worksheet accordingly.						not-used
		Real Property Tax – Buildings	0.80%	of building		For simplicity in this model, they are assumed to be annual fees to be conservative.						not-used
		Land Lease & ROW	0.00	US$/MT coal								not-used
		Property Insurance – PPE	0.78%	of fixed assets								not-used
		Property Insurance – Building	0.78%	of building								not-used
		Business Interruption Insurance	0.56%	of previous year’s revenue								not-used
	of Capital	Special Education Fund – benefits to host community	1.00%	of land								not-used
	0.277%	SEC Registration & Fees	310.15	Securities & Exchange Commission (certificate of registration)								not-used
		BIR Registration & Fees	11.28	Bureau of Internal Revenue (registration of TIN, VAT)								not-used
	0.007%	DENR Permits & Fees	7.84	Department of Environment & Natural Resources (EIS, ECC)								not-used
		Discharge Fee (BOD, TSS) – DENR	0.00	water pollution discharge permit (4 wastes at 600 each)								not-used
	0.028%	EMB Permits & Fees	31.35	Environment Management Bureau (air quality)								not-used
		NWRB Permits & Fees	370.56	National Water Resources Board (water use permit)								not-used
		PNRI Permits & Fees	125.53	Philippine Nuclear Research Institute (radioactive material license)								not-used
		ERC Registration & Fess	31.91	Energy Regulatory Commission (certificate of compliance, authority to operate)								not-used
	0.015%	DOLE Permits & Fees	16.79	Department of Labor & Employment (permit to operate pressurized vessels)								not-used
		DTI Permits & Fees	0.00	Department of Trade & Industry (registration of business name, with SEC now for corporation)								not-used
	0.142%	LGU Registration & Fees	158.99	Local government units (barangay, municipal, provincial, regional)								not-used
	0.002%	NTC Registration & Fees	2.24	National Telecommunication Commission (radio station permit)								not-used
		BOC Registration & Fees	106.38	Bureau of Customs (accreditation and registration)								not-used
		PPA Registration & Fees	21.28	Philippine Port Authority (permit to operate shore line facilities)								not-used
		ATO Registration & Fees	277.66	Air Transportation Office (height clearance permit for smoke stack)								not-used
		PDEA Registration & Fees	63.83	Philippine Drug Enforcement Agency (essential chemicals commodity permit)								not-used
		BOI Registration & Fees	95.74	Board of Investment (certificate of registration)								not-used
		DOE Permits & Fees	17.02	Department of Energy (authority to import, certificate of registration)								not-used
		Local Business Taxes (1/2 of 1% of GR)	0.00%	of gross revenue								not-used
		National Franchise Taxes (1/2 of 1% of GR)	0.00%	of gross revenue								not-used
		Total Taxes, Insurances, Benefits & Regulatory Costs										not-used

21)		Cost of debt (loan interest)
	8.00%	Reference interest rate (Libor or other)	12	loan term								used
	2.00%	Spread	18.00	grace period (construction period)								used
	10.00%	Interest rate of debt	0	loan amortization method (1 = constant principal repayment, 0 = declining balance method)								used

22)		Capital Structure (equity & debt)
	16.00%	% to be financed by capital	30.00%	Equity IRR								used
	0.00%	% to be financed by non refundable subsidy	0.00%	Subsidy								used
	10.00%	% to be financed by debt	70.00%	Debt Interest								used
		Initial amount of capital	11.80%	WACC

23)		Debt Service Reserve Fund
	6	months of debt service										used
	4.00%	DSRF Income -interest on Foreign Currency Deposit										used
	7.50%	Withholding Tax on Foreign Currency Deposit										used
	0.30%	DSRF Expense – withholding tax										used

24)		Equity Structure (shareholder contribution)
	planned	Annual dividend payable	actual
	60.00%	Investor 1										used
	20.00%	Investor 2										used
	20.00%	Investor 3										used
												used
25)		Your done. Now converge the model by pressing ctrl + u

26)		Print the reports as required

Tags: biomass energy, cogeneration, feed-in tariff, mini hydro, project finance model, solar PV, wind energy

This entry was posted on Wednesday, March 10th, 2010 at 9:12 am and is filed under feed-in tariff, financial models. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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