Project Finance Model for Determining the “Best New Entrant” Power Generation Technology
Project Finance Model for Determining the “Best New Entrant” Power Generation Technology
In proposing a new power plant project to address a supply deficiency problem in a given grid, it is important for the project proponent and developer to demonstrate to the investors as well as to the regulator and end-users that the proposed power generation technology solution is the “best new entrant” that will address the power deficiency and provide the cheapest, reliable and stable electricity service.
Determining the “Best New Entrant” or BNE technology will invariably require a series of sensitivity runs to determine the optimal combination of power generation technology (oil, gas, coal, nuclear, geothermal, biomass, etc), which original equipment manufacturer (Siemens, Westinghouse, General Electric, Mitsubishi, Alstom, etc), what engine model (capacity, plant heat rate or efficiency), what cooling system to use (sea water once thru, lake water once thru, river water cooling tower, deepwell water cooling tower, dry cooling or radiator cooling, pumping energy), what plant location (access to body of water for cooling, elevation or atmospheric pressure, ambient air temperature and humidity, power output adjustment), what transmission line system (type of T/L, length of cabling, type of conductor, energy loss), and what type of fuel or energy source (diesel, gasoil, bunker, orimulsion, natural gas, LNG, coal, nuclear fuel, geothermal, biomass, landfill gas, biogas, hydro, wind, solar, ocean thermal, ocean wave, tide).
A project finance model for thermal power generation systems (oil, gas, nuclear, geothermal, biomass) has been developed by the technology expert and is now available for use. Thru a series of sensitivity runs using a macro, the first year tariff for each combination is copy pasted and saved in a spread sheet so that the summary table could be analyzed further in determining the optimal or “best new entrant” technology – the combination that provides the lowest first year tariff given the project cost, O&M costs, fuel costs, equity structure and cost of equity and debt, plant heat rate or efficiency, plant capacity, capacity factor, reliability, availability and operating hours.
A summary of the results is shown below:
| PhP/kWh | US$/kWh | MW | Technology |
| 11.4755 | 0.2368 | 300 | Oil Thermal |
| 9.3000 | 0.1919 | 100 | Orimulsion Thermal |
| 8.7536 | 0.1806 | 100 | Gas Thermal |
| 6.6796 | 0.1378 | 35 | Simple Gas Turbine AD (nat gas) |
| 9.9570 | 0.2055 | 35 | Simple Gas Turbine AD (oil) |
| 6.0000 | 0.1238 | 500 | Combined Cycle GT (nat gas) |
| 8.2257 | 0.1697 | 500 | Combined Cycle GT (oil) |
| 6.8464 | 0.1413 | 600 | Pulverized Coal Thermal |
| 7.2427 | 0.1495 | 350 | Atmospheric CFB |
| 7.0101 | 0.1447 | 350 | Pressurized FBC |
| 6.8568 | 0.1415 | 350 | IGCC |
| 5.8317 | 0.1203 | 1,330 | PHWR once thru |
| 11.9769 | 0.2471 | 50 | Geothermal Flashed Steam |
| 12.8278 | 0.2647 | 1,000 | Biomass Direct Combustion |
If you need more information, please write the author:
Marcial T. Ocampo
Energy Technology & Business Development Consultant
Project Finance & Financial Modeling
Market, Technical & Feasibility Studies
email mars_ocampo@yahoo.com
web www.energytechnologyexpert.com
http://ph.linkedin.com/in/ocampomarcial
——————- sample rows and columns of the thermal power plant model
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PROJECT FINANCE MODEL : Thermal Power Plant Model | Name | Thermal Power Plant Model |
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Thermal Power Plant Model license for: | ||
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(Oil, Gas, Coal, Nuclear, Geothermal, Biomass) |
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(C) Copyright 2009 by Marcial T. Ocampo (November 2009) | |||
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INSTRUCTIONS |
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US$/kWh |
mars_ocampo@yahoo.com |
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|
|
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(This example is in PhP Thousand, except for the unit prices which are in PhP/kWh) |
0.2286 |
energydataexpert@gmail.com |
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||
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Year 0 reflects the starting assumptions, which will be applicable starting in year 1. |
Select NPV to use (1) |
11.0789 |
NPV |
IRR |
Payback |
|
|
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Blue cells must be filled out by the user. |
|
NPV-ROI |
0 |
(142,169,183) |
5.53% |
31.42 |
|
|
Escalate fuel, lubes, tariff and O&M costs? (1=yes, 0=no) |
0 |
NPV-ROE |
1 |
0 |
15.00% |
9.95 |
|
|
CALCULATION OF GROSS OPERATING MARGIN |
|
NPV-FC |
0 |
(4,851,602) |
14.21% |
10.15 |
|
|
|
|
NPV-FC discounted |
0 |
(18,323,526) |
11.49% |
11.25 |
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Year |
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used |
0.00 |
2009 |
2010 |
2011 |
|
|
Days Per Year |
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|
|
365 |
365 |
365 |
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Hours Per Day |
24 |
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|
24 |
24 |
24 |
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Plant Operation |
365 |
|
Year |
0 |
1 |
2 |
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|
Overhaul Cycle |
|
|
|
0 |
1 |
2 |
|
|
Capacity Degradation |
|
|
|
|
|
|
|
|
Normal, % p.a. |
1.00% |
|
|
1.0000 |
1.0100 |
1.0201 |
|
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Overhaul, % p.a. |
-4.00% |
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|
1.00% |
1.00% |
|
|
Overhaul Cycle, yr |
5 |
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|
|
|
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Recovery, % |
80.00% |
|
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|
14 |
Select Manufacturer/Engine Model: |
MW |
Heat Rate, Btu / kWh |
Efficiency, % |
EPC Cost, $/kW |
Variable O&M |
Fixed O&M |
|
0 |
Oil Thermal |
0.000 |
10,340 |
33.00% |
991 |
0.00050 |
0.300 |
|
0 |
Orimulsion Thermal |
0.000 |
8,979 |
38.00% |
1,376 |
0.00065 |
0.390 |
|
0 |
Gas Thermal |
0.000 |
7,583 |
45.00% |
1,000 |
0.00050 |
0.300 |
|
0 |
Simple Gas Turbine AD (nat gas) |
0.000 |
8,979 |
38.00% |
325 |
0.00500 |
0.040 |
|
0 |
Simple Gas Turbine AD (oil) |
0.000 |
8,979 |
38.00% |
325 |
0.00500 |
0.040 |
|
0 |
Combined Cycle GT (nat gas) |
0.000 |
6,093 |
56.00% |
650 |
0.00200 |
0.150 |
|
0 |
Combined Cycle GT (oil) |
0.000 |
6,093 |
56.00% |
650 |
0.00200 |
0.150 |
|
0 |
Pulverized Coal Thermal |
0.000 |
8,979 |
38.00% |
1,079 |
0.00325 |
0.225 |
|
0 |
Atmospheric CFB |
0.000 |
8,322 |
41.00% |
1,300 |
0.00325 |
0.225 |
|
0 |
Pressurized FBC |
0.000 |
7,935 |
43.00% |
1,200 |
0.00325 |
0.242 |
|
0 |
IGCC |
0.000 |
7,583 |
45.00% |
1,206 |
0.00187 |
0.242 |
|
0 |
PHWR once thru |
0.000 |
10,340 |
33.00% |
1,518 |
0.00040 |
0.550 |
|
0 |
Geothermal Flashed Steam |
0.000 |
12,186 |
28.00% |
2,000 |
0.00015 |
0.957 |
|
1 |
Biomass Direct Combustion |
1,000.000 |
14,835 |
23.00% |
1,900 |
0.00520 |
0.430 |
|
Used |
|
1,000.000 |
14,835 |
23.00% |
1,900.00 |
0.00520 |
0.430 |
|
|
(1) Own use is mainly condenser cooling pumping power |
8.275 |
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|
|
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| RC | Plant Rated Capacity, MW |
991.725 |
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|
991.725 |
991.725 |
| DC | Dependable Capacity, MW |
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|
|
|
981.906 |
972.185 |
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Plant Availability |
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| CD | Calendar Days |
365.24 |
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|
|
365 |
365 |
| PH | Total Period Hours |
24 |
|
|
|
8760 |
8760 |
| POH | Planned Overhaul, days (3 wks) |
21 |
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|
|
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| RMH | Regular Maintenance, days (1 wks) |
7 |
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|
7 |
7 |
| ESD | Economic S/D, % of CD |
0.30% |
|
|
|
1.10 |
1.10 |
| DSD | Deactivated S/D – External, % of CD |
0.50% |
|
|
|
1.83 |
1.83 |
| UO | Total Unforced Outage, days |
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|
9.92 |
9.92 |
| FO | Forced Outage – Internal, % of CD |
5.00% |
|
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|
18.25 |
18.25 |
| TO | Total Outage, days |
30.98 |
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|
28.17 |
28.17 |
| TOH | Total Operating Hours |
8,022 |
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|
8,084 |
8,084 |
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Plant Statistics |
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|
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| OR | Outage Rate = FO*24/ (FO*24+TOH) |
5.18% |
|
|
|
5.14% |
5.14% |
| AVL | Availability = TOH/PH |
91.52% |
|
|
|
92.28% |
92.28% |
| EA | Equivalent Availability |
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| EA = (DC*(PH/24 -POH-RMH-FO-ESD-DSD))/(RC*(PH/24-ESD-DSD)) |
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|
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|
92.11% |
91.19% |
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Reliability = 1-OR |
94.82% |
|
|
|
94.86% |
94.86% |
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Generation and Capacity Factor |
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|
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| LF | Load Factor, % of DC |
95.00% |
|
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|
95.00% |
95.00% |
| PG | Potential Generation = DC*LF*TOH | MWh |
197,445,729 |
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|
7,540,770 |
7,466,109 |
| RG | Rated Generation = RC*PH | MWh |
217,330,681 |
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|
8,687,515 |
8,687,515 |
| CF | Capacity Factor = PG / RG |
90.85% |
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|
86.80% |
85.94% |
|
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Plant Heat Rate |
1=CCGT |
2=Cogen |
3=Diesel Engine |
4=Thermal |
|
|
| GT | Gas Turbine Output (1 / 3) |
33.33% |
77.00% |
40.00% |
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|
|
| ST | Steam Turbine Input (2 / 3) |
66.67% |
23.00% |
|
|
|
|
| BE | Boiler Efficiency at 1% cont. BD |
90.00% |
85.00% |
|
90.00% |
|
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| STE | Steam Turbine Efficiency |
40.00% |
37.00% |
|
37.00% |
|
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| ME | Mechanical Drive / Clutch Efficiency |
99.00% |
99.00% |
99.00% |
99.00% |
|
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| GE | Generator Efficiency |
96.00% |
96.00% |
96.00% |
96.00% |
|
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| OE | Overall Efficiency=(GT+ST*BE*STE)*ME*GE |
54.49% |
80.06% |
38.02% |
31.65% |
23.00% |
|
|
|
Plant Heat Rate at 100% eff. |
3412.12822 |
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|
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| IPHR | Plant Heat Rate, Btu / kWh = 3412/ OE |
6,262 |
4,262 |
8,976 |
10,781 |
14,835 |
14,835 |
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Heat Rate (Efficiency) Degradation |
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|
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|
|
|
|
Normal, % p.a. |
1.00% |
|
|
1.0000 |
1.0100 |
1.0201 |
|
|
Overhaul, % p.a. |
-4.00% |
|
|
|
1.00% |
1.00% |
|
|
Overhaul Cycle, yr |
5 |
|
|
|
|
|
|
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Recovery, % |
80.00% |
|
|
|
|
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| APHR | Actual Plant Heat Rate, Btu/kWh |
|
|
|
|
14,984 |
15,134 |
| AOE | Actual Overall Efficiency, % of fuel GHV |
|
|
|
|
22.77% |
22.55% |
|
|
Net Electricity Sales, MWh |
|
|
|
|
|
|
|
|
Potential Generation |
|
|
|
|
7,540,770 |
7,466,109 |
|
Less: |
Step-up Transformer Loss (Switchyard), MWh |
5.000% |
|
|
|
5.00% |
5.00% |
|
|
Generation at Plant Fence |
|
|
|
|
7,163,732 |
7,092,803 |
|
Less: |
Transmission Line Losses, MWh |
0.502% |
|
|
|
0.50% |
0.50% |
|
|
Net Electricity Sales to Customer |
|
|
|
|
7,127,774 |
7,057,202 |
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Less: |
Other Losses (non-technical, pilferage), MWh |
0.000% |
|
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|
0.00% |
0.00% |
|
|
Electricity sales to the network (MWh) |
|
|
|
|
7,127,774 |
7,057,202 |
|
|
Annual increase of the volume, % p.a. |
|
|
|
|
0.0% |
-1.0% |
|
|
Fuel Consumption |
|
|
|
|
|
|
|
|
Gross Generation (Potential Generation), MWh |
|
|
|
|
7,540,770 |
7,466,109 |
|
|
Plant Heat Rate, Btu/kWh |
|
|
|
|
14,984 |
15,134 |
|
100.00% |
Total Energy Input to be supplied by fuel, Million Btu |
|
|
|
|
112,988,586 |
112,988,586 |
|
% Blend |
Energy Supplied by each fuel, Million Btu |
GHV, Btu/lb |
NHV, Btu/lb |
GHV / NHV |
|
|
|
|
0.00% |
Natural Gas (Malampaya Gas) – cogen, CCGT |
22,129 |
20,249 |
1.093 |
|
0 |
0 |
|
2.00% |
Diesel Oil – engine, CCGT |
19,650 |
18,453 |
1.065 |
|
2,259,772 |
2,259,772 |
|
2.00% |
Low Sulfur Fuel Oil (LSFO – 1% S) – cogen, CCGT |
18,400 |
17,449 |
1.055 |
|
2,259,772 |
2,259,772 |
|
1.00% |
Bunker Fuel Oil (BFO – 3% S) – thermal, CCGT |
19,670 |
18,565 |
1.060 |
|
1,129,886 |
1,129,886 |
|
0.00% |
Coal (Lignite, Bituminous, Anthracite) – thermal |
10,000 |
9,475 |
1.055 |
|
0 |
0 |
|
0.00% |
Nuclear Fuel, $/kg |
3,900 |
GJ/kg |
|
|
0 |
0 |
|
0.00% |
Geothermal Steam, $/GJ |
1,104 |
Btu/lb steam |
|
|
0 |
0 |
|
0.00% |
Orimulsion (50% water, 50% bitumin) |
5,000 |
4,738 |
1.055 |
|
0 |
0 |
|
95.00% |
Biomass Fuel (Bagasse, Woodwaste) – engine |
4,000 |
3,463 |
1.155 |
|
107,339,157 |
107,339,157 |
|
lb/kg |
Fuel Quantity |
kg / Liter |
GHV, Btu/Liter |
|
|
|
|
|
2.2046 |
Natural Gas (Malampaya Gas) – cogen, CCGT |
1.05506 |
kJ / Btu |
GJ (Million kJ) |
|
0.000 |
0.000 |
|
liters/gal |
Diesel Oil – engine, CCGT |
0.8448 |
36,597 |
Million Liters |
|
61.747 |
61.747 |
|
3.7854 |
Low Sulfur Fuel Oil (LSFO – 1% S) – cogen, CCGT |
0.9659 |
39,181 |
Million Liters |
|
57.675 |
57.675 |
|
kJ / Btu |
Bunker Fuel Oil (BFO – 3% S) – thermal, CCGT |
0.8916 |
38,664 |
Million Liters |
|
29.223 |
29.223 |
|
|
Coal (Lignite, Bituminous, Anthracite) – thermal |
Btu/kg |
22,046 |
Million kg |
|
0.000 |
0.000 |
|
|
Nuclear Fuel, $/kg |
GJ/kg |
3,900 |
kg |
|
0.000 |
0.000 |
|
|
Geothermal Steam, $/GJ |
Btu/kg |
2,434 |
Million kg |
|
0.000 |
0.000 |
|
|
Orimulsion (50% water, 50% bitumin) |
Btu/kg |
11,023 |
Million kg |
|
0.000 |
0.000 |
|
|
Biomass Fuel (Bagasse, Woodwaste) – engine |
Btu/kg |
8,818 |
Million kg |
|
12,172.181 |
12,172.181 |
|
|
Total Million Liters FOE |
|
|
Million Liters FOE |
|
2,922.337 |
2,922.337 |
|
|
Specific Fuel Consumption, Liters FOE / kWh |
|
|
|
|
0.388 |
0.391 |
|
Reference |
Unit Fuel Cost |
PhP / Liter 2009 |
Escalation |
2009 |
$ / Million Btu |
|
|
|
8.628 |
Natural Gas (Malampaya Gas) – cogen, CCGT |
418.113 |
0.00% |
PhP / GJ |
9.103 |
418.11 |
418.11 |
|
46.44 |
Diesel Oil – engine, CCGT |
30.000 |
0.00% |
PhP / Liter |
16.916 |
30.00 |
30.00 |
|
35.97 |
Low Sulfur Fuel Oil (LSFO – 1% S) – cogen, CCGT |
23.236 |
0.00% |
PhP / Liter |
12.238 |
23.24 |
23.24 |
|
34.84 |
Bunker Fuel Oil (BFO – 3% S) – thermal, CCGT |
22.506 |
0.00% |
PhP / Liter |
12.012 |
22.51 |
22.51 |
|
$85.00 |
Coal (Lignite, Bituminous, Anthracite) – thermal |
4.119 |
0.00% |
PhP / kg |
3.856 |
4.12 |
4.12 |
|
$765.00 |
Nuclear Fuel, $/kg |
37,071.900 |
0.00% |
PhP / kg |
0.207 |
37,071.90 |
37,071.90 |
|
$2.00 |
Geothermal Steam, $/GJ |
0.249 |
0.00% |
PhP / kg |
2.110 |
0.25 |
0.25 |
|
50.00% |
Orimulsion (50% water, 50% bitumin) |
11.436 |
0.00% |
PhP / kg |
21.408 |
11.44 |
11.44 |
|
10.00% |
Biomass Fuel (Bagasse, Woodwaste) – engine |
2.287 |
0.00% |
PhP / kg |
5.352 |
2.29 |
2.29 |
|
|
Total Fuel Cost, Million PhP |
|
|
|
31,689.826 |
31,689.826 |
|
|
Methane |
Natural Gas (Malampaya Gas) – cogen, CCGT |
|
|
|
|
0.000 |
0.000 |
|
70% |
Diesel Oil – engine, CCGT |
|
|
|
|
1,852.420 |
1,852.420 |
|
Btu/scf |
Low Sulfur Fuel Oil (LSFO – 1% S) – cogen, CCGT |
|
|
|
|
1,340.153 |
1,340.153 |
|
960 |
Bunker Fuel Oil (BFO – 3% S) – thermal, CCGT |
|
|
|
|
657.715 |
657.715 |
|
1100 |
Coal (Lignite, Bituminous, Anthracite) – thermal |
|
|
|
|
0.000 |
0.000 |
|
1030 |
Nuclear Fuel, $/kg |
|
|
|
|
0.000 |
0.000 |
|
|
Geothermal Steam, $/GJ |
|
|
|
|
0.000 |
0.000 |
|
|
Orimulsion (50% water, 50% bitumin) |
|
|
|
|
0.000 |
0.000 |
|
|
Biomass Fuel (Bagasse, Woodwaste) – engine |
|
|
|
|
27,839.538 |
27,839.538 |
|
|
Average fuel cost, PhP/Liter |
10.84 |
|
|
|
10.84 |
10.84 |
|
|
Average fuel cost escalation, % p.a. |
|
0.00% |
|
|
0.0% |
0.0% |
|
|
Lube Oil Consumption |
|
|
|
|
|
|
|
|
Normal, % p.a. |
2.00% |
|
|
1.0000 |
1.0200 |
1.0404 |
|
|
Overhaul, % p.a. |
-8.00% |
|
|
|
2.00% |
2.00% |
|
|
Overhaul Cycle, yr |
5 |
|
|
|
|
|
|
|
Recovery, % |
80.00% |
|
|
|
|
|
|
|
Ideal Lube Oil Consumption, g/kWh |
0.254 |
|
|
|
0.254 |
0.254 |
|
|
Actual Lube Oil Consumption, g/kWh |
|
|
|
|
0.259 |
0.264 |
|
Reference |
Lube Oil Consumption, Million Liters |
0.8500 |
kg/Liter |
|
|
2.294 |
2.317 |
|
232.00 |
Lube Oil Cost, Million PhP |
149.87 |
0.00% |
|
|
343.789 |
347.193 |
|
|
Average lube oil cost, PhP/Liter |
|
|
|
|
149.871 |
149.871 |
|
|
Average lube oil escalation, % p.a. |
|
0.00% |
|
|
0.0% |
0.0% |
|
|
|
|
|
|
|
|
|
|
|
A) Operating income: ’000 PhP |
365 |
|
Year |
0 |
1 |
2 |
|
|
Electric tariff for sales to the network (PhP/kWh) |
|
11.0789 |
|
|
11.0789 |
11.0789 |
|
|
Annual increase of the tariff, % p.a. |
|
0.00% |
|
|
0.00% |
0.00% |
|
|
Income from sales to DU, ’000 PhP |
|
|
|
|
55,277,753 |
54,730,449 |
|
|
Electricity sales to DU, MWh |
70.00% |
of sales |
|
|
4,989,442 |
4,940,042 |
|
|
Electricity tariff to DU, PhP/kWh |
1.000 |
11.0789 |
discount tariff (direct customers) |
11.0789 |
11.0789 |
|
|
|
Income from sales to NPC, ’000 PhP |
|
|
|
|
15,793,644 |
15,637,271 |
|
|
Electricity sales to NPC, MWh |
20.00% |
of sales |
|
|
1,425,555 |
1,411,440 |
|
|
Electricity tariff to NPC, PhP/kWh |
1.000 |
11.0789 |
reference tariff (average grid) |
11.0789 |
11.0789 |
|
|
|
Income from sales to WESM, ’000 PhP |
|
|
|
|
7,896,822 |
7,818,636 |
|
|
Electricity sales to WESM, MWh |
10.00% |
of sales |
|
|
712,777 |
705,720 |
|
|
Electricity tariff to WESM, PhP/kWh |
1.000 |
11.0789 |
WESM tariff (wholesale spot market) |
11.0789 |
11.0789 |
|
|
|
Income from garbage tipping fee, ’000 PhP |
|
|
|
|
1,217,218 |
1,217,218 |
|
|
Garbage quantity, Million MT |
|
|
|
|
12.172 |
12.172 |
|
|
Tipping fee, PhP/MT |
100 |
0.00% |
|
|
100.000 |
100.000 |
|
|
|
|
|
|
|
|
|
|
|
TOTAL OPERATING INCOME |
|
|
|
|
80,185,437 |
79,403,574 |
|
|
Annual increase in Operating Income |
|
|
|
|
0.0% |
-1.0% |
|
|
Total electricity sales to DU, NPC, and WESM, MWh |
|
|
|
|
7,127,774 |
7,057,202 |
|
|
Average Electricity Tariff, PhP/kWh |
|
|
|
|
11.2497 |
11.2514 |
|
|
Annual increase in Electricity Tariff |
|
-0.02% |
|
|
0.0% |
0.0% |
|
|
|
|
|
|
|
|
|
|
|
B) Expenses: ’000 PhP |
|
|
Year |
0 |
1 |
2 |
|
|
Natural Gas (Malampaya Gas) – cogen, CCGT |
|
|
|
|
0 |
0 |
|
|
Diesel Oil – engine, CCGT |
|
|
|
|
1,852,420 |
1,852,420 |
|
|
Low Sulfur Fuel Oil (LSFO – 1% S) – cogen, CCGT |
|
|
|
|
1,340,153 |
1,340,153 |
|
|
Bunker Fuel Oil (BFO – 3% S) – thermal, CCGT |
|
|
|
|
657,715 |
657,715 |
|
|
Coal (Lignite, Bituminous, Anthracite) – thermal |
|
|
|
|
0 |
0 |
|
|
Nuclear Fuel, $/kg |
|
|
|
|
0 |
0 |
|
|
Geothermal Steam, $/GJ |
|
|
|
|
0 |
0 |
|
|
Orimulsion (50% water, 50% bitumin) |
|
|
|
|
0 |
0 |
|
|
Biomass Fuel (Bagasse, Woodwaste) – engine |
Escalation |
months |
working capital |
|
27,839,538 |
27,839,538 |
|
Fuel |
Total Fuel Costs |
|
2 |
5,281,638 |
31,689,826 |
31,689,826 |
31,689,826 |
|
|
Annual increase of fuel costs |
|
|
|
|
0.0% |
0.0% |
|
Variable |
Expenses from lube purchase |
|
2 |
57,298 |
343,789 |
343,789 |
347,193 |
|
0.40% |
Purchase of chemical materials |
0.00% |
2 |
53,457 |
320,742 |
320,742 |
317,614 |
|
0.25% |
Utilities (electricity, water) |
0.00% |
3 |
50,116 |
200,464 |
200,464 |
198,509 |
|
0.01 |
DOE 1-04 (0.01 PhP/kWh sold) |
|
3 |
17,819 |
71,278 |
71,278 |
70,572 |
|
|
Total Variable O&M |
|
|
178,690 |
|
936,272 |
933,888 |
|
Paul Breeze |
Annual increase of variable O&M |
|
0.30% |
|
|
0.0% |
-0.3% |
|
0.00000 |
Variable O&M, $/kWh |
48.46 |
0.00248 |
|
|
0.00256 |
0.00258 |
|
Fixed |
|
|
|
|
|
|
|
|
5.00% |
Maintenance of the installation |
0.00% |
3 |
1,002,318 |
4,009,272 |
4,009,272 |
3,970,179 |
|
4.00% |
Personnel expense |
0.00% |
3 |
801,854 |
3,207,417 |
3,207,417 |
3,176,143 |
|
3.80% |
Land lease, rent |
0.00% |
1 |
253,921 |
3,047,047 |
3,047,047 |
3,017,336 |
|
3.00% |
Other services |
0.00% |
1 |
200,464 |
2,405,563 |
2,405,563 |
2,382,107 |
|
|
Total Fixed O&M |
|
|
2,258,556 |
|
12,669,299 |
12,545,765 |
|
Paul Breeze |
Annual increase of fixed O&M |
|
1.07% |
|
|
0.0% |
-1.0% |
|
0.0000 |
Fixed O&M, $/kW/year |
48.46 |
0.2759 |
|
|
0.26362 |
0.26105 |
|
|
|
|
|
|
|
|
|
|
|
Taxes, Insurances, Benefits & Regulatory Costs |
0.00% |
|
0 |
|
3,874,406 |
3,493,619 |
|
|
DSRF Expense |
|
0.30% |
0 |
|
38,208 |
36,431 |
|
|
|
|
|
total working capital |
|
|
|
|
|
TOTAL OPERATING EXPENSE |
|
|
7,718,885 |
|
49,208,011 |
48,699,529 |
|
|
Annual increase |
|
0.04% |
|
|
|
-1.0% |
|
|
|
|
|
|
|
|
|
|
|
GROSS OPERATING MARGIN |
|
|
|
|
30,977,426 |
30,704,045 |
|
|
Annual increase |
|
2.35% |
|
|
|
-0.9% |
|
|
|
|
|
|
|
|
|
|
|
PROFIT AND LOSS STATEMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In ’000 PhP |
|
|
Year |
0 |
1 |
2 |
|
|
Operating income |
|
|
|
|
80,185,437 |
79,403,574 |
|
|
Operating expense |
|
|
|
|
49,208,011 |
48,699,529 |
|
|
|
|
|
|
|
|
|
|
|
Operating gross margin |
|
|
|
|
30,977,426 |
30,704,045 |
|
|
|
|
|
|
|
|
|
|
|
- Depreciation & amortization |
|
|
|
|
7,310,838 |
7,310,838 |
|
|
- Interest |
|
|
|
|
13,624,547 |
12,439,803 |
|
|
|
|
|
|
|
|
|
|
|
NET PROFIT BEFORE TAX |
|
|
|
|
10,042,041 |
10,953,403 |
|
|
(Tax rate) and Income Tax Holiday (ITH) years |
30% |
0 |
|
|
30% |
30% |
|
|
- Income tax |
|
|
|
|
3,012,612 |
3,286,021 |
|
|
|
|
|
|
|
|
|
|
|
NET PROFIT AFTER TAX |
|
|
|
|
7,029,429 |
7,667,382 |
|
|
Percentage of increase |
|
|
|
|
|
9.1% |
|
|
|
|
|
|
|
|
|
|
|
NET CASH FLOW |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year |
0 |
1 |
2 |
|
|
Net profit after tax |
|
|
|
|
7,029,429 |
7,667,382 |
|
|
|
|
|
|
|
|
|
|
|
Addback: |
|
|
|
|
|
|
|
|
Depreciation & Amortization |
|
|
|
|
7,310,838 |
7,310,838 |
|
|
Working Capital |
|
|
|
|
|
|
|
|
Salvage Value |
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
DSRF Income |
4.00% |
DSRF Income |
|
|
509,440 |
485,745 |
|
|
Less: |
|
|
|
|
|
|
|
|
Principal Repayment |
|
|
|
|
11,847,432 |
11,847,432 |
|
0 |
Profit Sharing |
0.00% |
of income after tax |
|
|
0 |
0 |
|
$0 |
Social Benefit Fund – Host Community |
0 |
per month |
|
|
0 |
0 |
|
$0.00 |
Add: Carbon Emission Credits (net of monitoring fees) |
0.650 |
0.238 |
kg CO2/kWh |
0.000 |
0 |
0 |
|
0.00% |
NET CASH FLOW |
|
|
|
|
3,002,274 |
3,616,533 |
|
$0 |
Percentage of increase |
|
|
|
|
|
20.5% |
|
|
((0.650 -0.000) kg CO2/ kWh x MWh x 1000 kWh/MWh x MT/1000 kg x $5.00/MT x (100%- 4%) – 1,200 $) x M$/1000$ |
|
|
|
|||
|
|
Total Initial investment |
|
|
|
203,098,833 |
|
|
|
|
Project Cash Flow |
5.53% |
11.50% |
WACC |
-203,098,833 |
3,002,274 |
3,616,533 |
|
|
|
IRR |
NPV |
-142,169,183 |
-203,098,833 |
2,610,673 |
2,734,619 |
|
|
|
|
check |
-112,776,053 |
-203,098,833 |
2,692,623 |
2,908,993 |
|
|
|
($101,144,441.72) |
cumulative |
0 |
-203,098,833 |
-200,096,558 |
-196,480,025 |
|
|
|
|
project payback |
31.42 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Invested capital |
|
|
30.00% |
60,929,650 |
|
|
|
|
Equity Cash Flow |
15.00% |
15.00% |
Equity IRR |
-60,929,650 |
3,002,274 |
3,616,533 |
|
|
|
IRR |
NPV |
0 |
-60,929,650 |
2,610,673 |
2,734,619 |
|
|
|
|
check |
0 |
-60,929,650 |
2,610,673 |
2,734,619 |
|
|
|
$0.00 |
cumulative |
0 |
-60,929,650 |
-57,927,375 |
-54,310,842 |
|
|
|
|
equity payback |
9.95 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CALCULATION OF CASH FLOW FOR DEBT SERVICE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year |
0 |
1 |
2 |
|
|
Operating gross margin |
|
|
|
|
30,977,426 |
30,704,045 |
|
|
- Income tax |
|
|
|
|
3,012,612 |
3,286,021 |
|
|
- Increase in working capital needs (WCN) |
|
|
|
|
2,577,155 |
-78,959 |
|
|
- Profit Sharing |
|
|
|
|
0 |
0 |
|
|
+ DSRF Income |
|
|
|
|
509,440 |
485,745 |
|
|
- Social Benefit Fund |
|
|
|
|
0 |
0 |
|
|
+ Carbon Emission Credits |
|
|
|
|
0 |
0 |
|
|
Cash flow available for debt service (CFD) |
|
|
|
|
25,897,098 |
27,982,727 |
|
|
|
|
|
|
|
|
|
|
|
CALCULATION OF DEBT SERVICE COVERAGE RATIO (DSCR) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year |
0 |
1 |
2 |
|
|
Cash flow available for debt service (CFD) |
|
|
|
|
25,897,098 |
27,982,727 |
|
|
|
|
|
|
|
|
|
|
|
Annual debt service (DS) |
|
|
|
|
25,471,979 |
24,287,235 |
|
|
|
MIN |
AVE |
MAX |
|
|
|
|
|
DEBT SERVICE COVERAGE RATIO (DSCR) |
1.017 |
1.414 |
1.927 |
|
1.017 |
1.152 |
|
|
|
|
|
|
|
|
|
|
|
CALCULATION OF DIVIDENDS PAYABLE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year |
0 |
1 |
2 |
|
|
Cash flow available for debt service (CFD) |
|
|
|
|
25,897,098 |
27,982,727 |
|
|
Annual debt service (DS) |
|
|
|
|
25,471,979 |
24,287,235 |
|
|
CF available for dividends (CFDiv = CFD-DS) |
|
|
|
|
425,119 |
3,695,492 |
|
|
Accumulated CFDiv |
|
|
|
0 |
425,119 |
4,120,611 |
|
|
Current year profit after tax |
|
|
|
|
7,029,429 |
7,667,382 |
|
|
Accumulated profit: limit for dividend payable |
|
|
|
0 |
7,029,429 |
14,696,811 |
|
|
Select smaller of accumulated dividends |
|
|
|
|
425,119 |
4,120,611 |
|
|
Accumulated dividend payable |
|
|
|
0 |
425,119 |
4,120,611 |
|
|
Annual dividend payable |
|
|
|
|
425,119 |
3,695,492 |
|
|
|
|
|
|
|
|
|
|
|
CALCULATION OF NPV, IRR AND PAY-BACK ACCORDING TO INVESTED CAPITAL AND DIVIDENDS PAYABLE |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year |
0 |
1 |
2 |
|
|
Invested capital |
|
|
|
60,929,650 |
|
|
|
|
Annual dividend payable |
|
|
|
0 |
425,119 |
3,695,492 |
|
|
Discount rate to be applied for NPV calculation |
|
|
|
15.00% |
15% |
15% |
|
|
Discount factor for this rate |
|
|
1.0000 |
1.0000 |
1.1500 |
1.3225 |
|
|
Discounted dividends |
|
|
|
0 |
369,669 |
2,794,323 |
|
|
Present value of dividends |
|
|
|
56,078,048 |
|
|
|
|
NPV of the investment |
|
|
-4,851,602 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year |
0 |
1 |
2 |
|
|
Investment schedule |
14.21% |
15.00% |
Equity IRR |
-60,929,650 |
425,119 |
3,695,492 |
|
|
IRR of Invested Capital |
IRR |
NPV |
-4,851,602 |
-60,929,650 |
369,669 |
2,794,323 |
|
|
|
|
check |
-4,851,602 |
-60,929,650 |
369,669 |
2,794,323 |
|
|
|
($4,218,784.31) |
cumulative |
0 |
-60,929,650 |
-60,504,530 |
-56,809,039 |
|
|
Pay-back term of invested capital, years |
|
equity payback |
10.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE SHEET ACCOUNTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of Working Capital Needs (WCN): |
|
|
|
|
|
|
|
|
Cash needed for operations (+) |
3.00 |
months of expenses |
|
|
1,872,108 |
1,853,851 |
|
|
Customers / Receivables (+) |
1.00 |
months of revenue |
|
|
6,682,120 |
6,616,964 |
|
|
Stocks / Inventory (+) |
2.00 |
months of fuel & chemicals |
|
5,392,393 |
5,392,439 |
|
|
|
Suppliers / Payables (-) |
1.00 |
months of payables |
|
|
3,150,581 |
3,146,173 |
|
|
WCN |
13.29% |
% of operating income |
8,218,885 |
10,796,040 |
10,717,081 |
|
|
|
|
|
|
|
|
|
|
|
|
CALCULATION OF DEPRECIATION |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48.46 |
In ’000 PhP |
|
|
Year |
0 |
1 |
2 |
|
$0 |
Initial investment in land (PhP/ha), 1 ha = 10,000 m2 |
10,000,000 |
2 |
ha |
20,000 |
|
|
|
|
Freight on Board = FOB USA = $/kW |
92,074 |
1,000.000 |
MW |
92,074,000 |
|
|
|
|
Ocean Freight = FRT = 5% x FOB |
5% |
|
|
4,603,700 |
|
|
|
|
Insurance = INS = 1% x FOB |
1% |
|
|
920,740 |
|
|
|
|
Cargo, Insurance & Freight = CIF = FOB + FRT + INS |
|
|
|
97,598,440 |
|
|
|
|
Value Added Tax = VAT = 12% x CIF |
12% |
|
|
11,711,813 |
|
|
|
|
Customs Duty = (CIF + VAT) x (% Duty) x (1 + % VAT) |
3% |
|
|
3,672,824 |
|
|
|
|
Duty-Paid Landed Cost = DPLC = CIF + VAT + Duty |
|
|
|
112,983,077 |
|
|
|
|
Local Freight Cost = LFC = 3% x CIF |
3% |
|
|
2,927,953 |
|
|
|
|
Delivered Cost at Site = DCS = DPLC + LFC |
|
|
|
115,911,030 |
|
|
|
|
Installation Cost = IC = 5% x FOB |
5% |
|
|
4,603,700 |
|
|
|
1 |
Condenser Cooling System |
358,493,317 |
|
|
358,493 |
|
|
|
1 |
Transmission Line, $ per km and km length |
17,445,600 |
10.00 |
km |
174,456 |
|
|
|
|
Total EPC = DCS + IC+ CCS + T/L |
|
|
|
121,047,680 |
|
|
|
|
Contingency (10%) = EPC x 10% |
10% |
|
|
12,104,768 |
|
|
|
|
Documentary Stamps (1%) = EPC x 1% = DS |
1% |
|
|
1,210,477 |
|
|
|
$2,773 |
Total Fixed Assets (EPC + Contingency + DS) |
|
|
|
134,362,925 |
|
|
|
|
Depreciation term (years) |
salvage |
10.00% |
4,837,065 |
25 |
134,382,925 |
|
|
|
Development costs (modeler) |
|
1.00% |
|
1,343,829 |
|
|
|
|
Other Costs including taxes, contingencies |
|
12.00% |
|
16,125,951 |
|
|
|
|
Carbon Emission Registration & Consultancy |
|
|
|
– |
|
|
|
$360 |
Initial investment in capitalized expenses |
|
|
|
25,688,665 |
17,469,780 |
|
|
|
Amortization term (years) |
salvage |
10.00% |
924,792 |
25 |
|
|
|
|
Working Capital: |
|
|
|
|
|
|
|
|
Working capital (adjustments for DSCR = 1.1) |
|
1.017 |
|
500,000 |
|
|
|
|
Working capital (initial stocks – fuel) – 2 months |
|
|
|
5,281,638 |
|
|
|
|
Working capital (initial stocks – lubes) – 2 months |
|
|
|
57,298 |
|
|
|
|
Working capital (initial stocks – chemical materials) – 2 months |
|
|
|
53,457 |
|
|
|
|
Working capital (mobilization – utilities) – 2 months |
|
|
|
50,116 |
|
|
|
|
Working capital (mobilization – DOE 1-94) – 2 months |
|
|
|
17,819 |
|
|
|
|
Working capital (mobilization – maintenance) – 2 months |
|
|
|
1,002,318 |
|
|
|
|
Working capital (mobilization – personnel expense) – 2 months |
|
|
|
801,854 |
|
|
|
|
Working capital (pre-paid expense – advance rent) – 2 months |
|
|
253,921 |
|
|
|
|
$170 |
Working capital (pre-paid expense – other services) – 2 months |
|
8,218,885 |
200,464 |
160,071,589 |
|
|
|
|
Interest During Construction: |
|
|
|
|
|
|
|
|
Dev’t fees (loan arranger) |
|
1.00% |
|
1,600,716 |
|
Year -2 |
|
|
Front end fees (loan arranger) |
|
1.00% |
|
1,600,716 |
|
33.0% |
|
|
Commitment fees (bank) |
|
0.50% |
|
1,600,716 |
|
52,823,624 |
|
$888 |
Interest During Construction (bank) – 36 months |
3.00 |
12.00% |
|
38,225,096 |
43,027,243 |
52,823,624 |
|
|
Amortization term (years) |
salvage |
10.00% |
1,548,981 |
25 |
|
536,240 |
|
$4,191 |
Total Investment (land, fixed, capitalized expenses, working capital) |
|
|
203,098,833 |
203,098,833 |
6,338,835 |
|
|
$4,191 |
checksum |
|
|
|
|
|
|
|
|
Depreciation of fixed assets |
|
|
|
|
4,837,065 |
4,837,065 |
|
|
Amortization of capitalized expenses (development costs, working capital) |
|
|
|
924,792 |
924,792 |
|
|
|
Amortization of capitalized expenses (IDC) |
|
|
|
|
1,548,981 |
1,548,981 |
|
|
|
|
|
|
|
|
|
|
|
TOTAL DEPRECIATION & AMORTIZATION EXPENSE |
|
|
|
|
||
One Response to “Project Finance Model for Determining the “Best New Entrant” Power Generation Technology”
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September 8th, 2011 at 9:58 pm
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