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MTO Mini-Hydro Model.xls

June 24th, 2012 Posted in renewable energy

MTO Mini-Hydro Model.xls

Mini-hydro or run-of-river system is carried out mostly in the mountains where a slowly snaking terrain will lend itself to conveying the water via a canal headrace with minimal head loss and then dropping the water head thru the penstock to the power turbines and exiting to the tailrace to rejoin the river flow. As such, it does not need a dam but rather a diversion weir to divert water to the canal headrace.

This MTO first-year tariff model for mini-hydro makes use of the basic assumptions of the country’s RE regulator for rated capacity (0.9 MW), capacity factor (80%), plant own use (2.9%), and transmission line loss (0.061%).

It assumes an overnight capital cost, fixed and variable O&M, spare parts replacement cost, substation and transmission line cost and distance, access road cost and distance, project development cost, 12% VAT, working capital and contingency. VAT recovery is 70% on the 5th year.

Construction period is 24 months while operating period is 20 years. Cost of capital is 16% p.a. for 30% equity and 10% p.a. for 70% debt.

Exchange rate is 44.00 PhP/US$.

Incentives provided by the RE Law is applied such as the 7 years income tax holiday, after which a 10% income tax is applied. Property tax of 1.5% applied on 80% of book value. Local business tax is 1% while DOE 1-94 contribution is 0.01 PhP/kWh.

To order, pay and download this model, follow this link:

http://energydataexpert.com/product_info.php?cPath=19_32&products_id=133

The summary worksheet is shown below:

 

Executive Summary
Mini-Hydro   power generation plant     RETURN ON
    EQUITY
Investors’   Returns:     NPV-ROE
  Equity IRR (% p.a.) 42.07%
  Payback Period (years) 2.41
  NPV @ 16% p.a.   discounting rate (‘000 US$)           1,520.72
Uses   and Sources of Funds During Construction:         000 US$          $ / kW
Uses   of Funds:
Initial investment in land (10 PhP/sqm) x (10,000 sqm/ha) 4.09 $5
Freight on Board = FOB USA = $/kW 1,440.00 $1,600
Ocean Freight = FRT = 5% x FOB 72.00
Insurance = INS = 1% x FOB 14.40
Cargo, Insurance & Freight = CIF = FOB + FRT + INS 1,526.40
Value Added Tax = VAT = 12% x CIF 183.17
Customs Duty = (CIF + VAT) x (% Duty) x (1 + % VAT) 0.00
Duty-Paid Landed Cost = DPLC = CIF + VAT + Duty 1,709.57
Local Freight Cost = LFC = 3% x CIF 45.79
Delivered Cost at Site = DCS = DPLC + LFC 1,755.36
Installation Cost = IC = 5% x FOB 72.00
Transmission line cost 69 kV (2,000,000 PhP/km) = T/L 909.09
Total EPC = DCS + IC + T/L 2,736.45
Contingency (10%) = EPC x 10% 273.65
Documentary Stamps (1%) = EPC x 1% = DS 27.36
Total Fixed Assets (EPC + Contingency + DS) 3,037.46 $3,375
Capitalized Expenses:
Development costs (developer, modeler) 15.21
Other Costs including taxes, contingencies 0.00
Carbon Emission Registration & Consultancy 25.00
Initial investment in capitalized expenses 40.21 $45
Working Capital: 3,077.67 $3,420
  Working capital (adjustment to   meet DSCR = 1.1) 0.00         months
  Expenses for diverted water fee   (fuel) 0.00 3
  Maintenance of water   turbine/generator (spares) 0.61 3
  Utilities (fuel, lubes,   electricity, water) 0.92 3
  Maintenance of the rest of the   plant 1.41 3
  Personnel expense 1.41 3
  Land lease, rent 0.84 3
  Taxes, Insurance, services, and   others 0.56 3
  Transport 0.28 3
  Total Working Capital 6.03 $7
Interest During Construction:
Dev’t fees (developer, loan arranger) 15.44
Front end fees (modeler, loan arranger) 15.44
Commitment fees (bank) 15.44
Interest During Construction (bank) – 24 months 370.54
  Total Legal &   Financing Fees and IDC 416.85 $463
Total Uses of Fund, ‘000 US$ 3,504.65 $3,894
Sources   of Fund:
  % to be financed by capital 1,051.39 30.00%
  % to be financed by non   refundable subsidy 0.00 0.00%
  % to be financed by debt 2,453.25 70.00%
Total Sources of Fund, ‘000 US$ 3,504.65 100.00%
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 (MW/unit) 0.300
  No. of Units 3
  Total Gross Installed   Capacity (MW) 0.900

 

National   Renewable Energy Board
Licensed to: (Name of   Client)
Generation and Sales:
  Capacity Factor (% of rated) 80.00%
  Days per year 365
  Hours per day 24  MW
  Gross Generation (MWh/year) 6,307 0.900
  Power Plant Own Use (%) 2.939% 2.939%
185 0.026
  Net Generation (MWh/year) 6,122 0.874
  Transmission Line Loss assumed (%) 0.061%
4
  Net Sales (MWh/year) 6,118
Transmission Line:
  Line Voltage 69  kV
  Power 900  kW
  Length 20.000  km
  Power Factor 0.850  lag
  No. of Circuit 3
  Transmission Line Loss calculated (%) 0.041%
  Cost per km: 2,000,000  PhP
45,455  $
Capital and O&M Cost   Assumptions:
First Year Tariff (PhP/kWh) 6.1500 0.13977   US$/kWh
Cost per kW FOB USA ($/kW) 1,600
Variable O&M ($/kWh): 0.001
  Maintenance of water turbine/generator   (spares) 2.46   000 US$
  Utilities (fuel, lubes, electricity, water) 3.68   000 US$
Fixed O&M ($/kW/year) 0.02
  Maintenance of the rest of the plant 5.63   000 US$
  Personnel expense 5.63   000 US$
  Land lease, rent 3.38   000 US$
  Taxes, Insurance, services, and others 2.25   000 US$
  Transport 1.13   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:
  VAT recovery at 5th year 70%
  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 0.00%
  Social Benefit Fund – Host Community 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$ 44.00 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 24.00

 

 

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