How to use the advanced (regulator) natural gas CCGT power plant project finance model

July 25th, 2017 No Comments   Posted in financial models

How to use the advanced (regulator) natural gas CCGT power plant project finance model

Finding an easy-to-use project finance model for a natural gas CCGT (combined cycle gas turbine) power plant with built-in data is sometimes difficult as some models don’t have the sophistication of a regulator template model as well as the ease of using the model and viewing immediately the results of a sensitivity change in the inputs to the model.

This is now made easy because the Input & Assumptions worksheet (tab) has combined all the input and output information in a single worksheet and placing the reports in other worksheets such as Tariff Breakdown, Construction Period, Operating Period, Financial Reports and Levelized Tariff.

Following is a sample case study on a natural gas CCGT power plant. From the preliminary design and cost estimates, the top management would want to know if the business idea of going into natural gas CCGT power development, construction and operation is worth the effort – is it feasible and what are the economic and financial returns for risking capital.

Here are the inputs and outputs of the advanced template model from OMT ENERGY ENTERPRISES:

——————————————————————————————-

Here are the summary of inputs:

all-in capital cost (overnight cost) = 917 $/kW (target cost)

EPC cost portion = 575 $/kW (computed by model)

refurbishment cost = 5% of EPC cost on the 12th year (overhaul)

fixed O&M cost = 14.13 $/kW/year (target cost) = 6,916.62 ‘000$/unit/year (computed by goal seek)

variable O&M cost = 3.60 $/MWh (target cost) = 26.87 ‘000$/MW/year (computed by goal seek)

general admin cost = 370.00 ‘000$/year (target cost)

 

Thermal power plant inputs:

Gross heating value of natural gas CCGT fuel = 22,129 Btu/lb

Plant heat rate = 7,050 Btu/kWh (48.40% thermal efficiency)

Cost of fuel per mmBtu = 9.103 $/mmBtu

Cost of natural gas fuel = 8.628 $/GJ = 444.10 $/MT

 

Lube oil consumption rate = 5.4 gram/kWh

Density of lube oil = 0.980 kg/Liter

Cost of lube oil = 200.00 PhP/Liter

 

capacity = 620.00 MW/unit x 1 unit = 620.00 MW

 

Plant Availability Factor, %                                    96.40% (computed by goal seek)

Load Factor, %                                                     95.00% (assumed)

allowance for losses & own use, %                         5.00% (assumed)

Net Capacity Factor after losses & own use, %    87.00% (target net capacity factor)

Degradation rate, %                                               0.2%

 

construction period = 36 months (start 2014)

operating period = 25 years (start 2017)

 

Capital cost estimation assumptions and % local cost (LC):

Power plant footprint (ha)                                   20.00

Cost of purchased land (PhP/sqm)                    25.00 (no land lease)

Land cost, $000 $99.41 100.0%
Equipment Cost ex BOP, Transport ($000/MW) $458.10 11.4%
Insurance, Ocean Freight, Local Transport, % of Equipment Cost 4.5% 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) $786.21 100.0%
Access Roads ($000/km) $181.82 100.0%
Distance of Access Road (km) 1.00
Dev’t & Other Costs (land, permits, etc) (% of EPC) 15.0% 100.0%
VAT on importation (70% recoverable) 12% 100.0%
Customs Duty 3% 100.0%
Initial Working Capital (% of EPC) 11.0% 100.0%
Contingency (% of Total Cost) 4.0% 48.7%

 

Capital cost breakdown (‘000$): (computed values)

Uses of Fund:
   Land Cost $99
   EPC (Equipment, Balance of Plant, Transport) $356,450
   Transmission Line Interconnection Facility $40
   Sub-Station Facility $786
   Development & Other Costs (Civil Works, Customs Duty) $63,157
   Construction Contingency $16,437
   Value Added Tax $31,222
   Financing Costs $61,034
   Initial Working Capital $39,316
Total Uses of Fund – $000 $568,542
                                 – PhP 000 28,596,013
Sources of Fund:
   Debt $397,979
   Equity $170,563
Total Sources of Fund $568,542

 

Local and Foreign Cost Components (from individual cost item):

Local Capital = 49 %

Foreign Capital = 51 %

 

Balance Sheet Accounts:

Receivables = 30 days of revenue

Payables    = 30 days of expenses

Inventory    = 60 days of consumables

 

Imported Capital Equipment: (fossil fuel)

Customs duty = 3%

Value added tax (VAT) = 12%

VAT recovery = 0% on 5th year of operation

 

Type of input / output VAT = 1 (with VAT)

Type of incentives = 1 (NO incentives)

 

Tax Assumptions:

Income Tax Holiday (yrs) 0
Income Tax Rate % (after ITH) 30%
Property tax (from COD) 2.0%
Property tax valuation rate (% of NBV) 80%
Local Business Tax 1.0%
Government Share (from COD) 0.0%
ER 1-94 Contribution (PhP/kWh) 0.01
Withholding Tax on Interest (Foreign Currency) – WHT 10%
Gross Receipts Tax on Interest (Local Currency) – GRT 1%
Documentary Stamps Tax (DST) 0.5%
PEZA Incentives (% of gross income) – 0% / 5% 0%
Royalty 0%

 

Capital Structure:

Equity Share = 30% at 14.00% p.a. target equity returns (IRR)

Debt Share = 70% (49% local, 51% foreign)

 

Debt Terms:

Local & Foreign Upfront & Financing Fees 2.00%
Local & Foreign Commitment Fees 0.50%
Local All-in Interest Rate excluding tax 10.00%
Local Debt Payment Period (from end of GP) (yrs) 10
Foreign All-in Interest Rate excluding tax 8.00%
Foreign Debt Payment Period (from end of GP) (yrs) 10
Local and Foreign Grace Period from COD (mos) 6
Local and Foreign debt Service Reserve (mos) 6

 

Foreign Exchange Rate:

Base Foreign Exchange Rate (PhP/US$) – 2013            48.0000 (construction)

Forward Fixed Exchange Rate (PhP/US$) – 2014           50.2971 (operating)

 

Escalation (CPI):

Annual Local CPI – for OPEX      0.0%            4.0%     for CAPEX (to model construction delay)

Annual US CPI – for OPEX           0.0%            2.0%     for CAPEX (to model construction delay)

 

Weighted Average Cost of Capital:

WACC = 10.48% p.a.

WACC pre-tax = 11.97% p.a.

WACC after-tax = 8.38% p.a.

 

Results of Financial Analysis:

 

First year tariff (Feed-in-Tariff) = 4.81729 P/kWh = 0.09578 USD/kWh

(at zero equity NPV)

 

Short run marginal cost (SRMC) and Long run marginal cost (LRMC):

Item PhP 000 PhP/kWh
Fuel      391,742,442 3.39778
Lubes            133,745 0.00116
Var O&M        21,841,145 0.18944
Total      413,717,332 3.58838
MWh net      115,293,514
SRMC      413,717,332 3.58838
Fix O&M        23,045,754 0.19989
Capital Cost      118,638,864 1.02902
LRMC      555,401,951 4.81729

SRMC = 3.58838 PHP/kWh (variable O&M + fuel + lubes)

LRMC = 4.81729 PHP/kWh (capital cost + fixed O&M + regulatory + SRMC)

 

Equity Returns: (30% equity, 70% debt)

IRR          = 14.00    % p.a. (target returns)

NPV        = 0.00     ‘000$

PAYBACK = 9.87    years

 

Project Returns: (100% equity, 0% debt)

IRR          = 11.41          % p.a.

NPV        = (4,243,735)  ‘000$ (negative since IRR < 14.00%)

PAYBACK = 7.35           years

——————————————————————————————-

The above runs were based on goal-seek to make equity NPV = 0 (to meet equity IRR target of 14.00% p.a.).

You can perform sensitivity analysis and save the results in a case column (copy paste value).

You can breakdown the tariff ($/kWh) into its capital ($/kW-month) and variable cost recovery ($/kWh) portions.

You can prepare all-in capital cost breakdown showing interest cost during construction and does model the impact of project construction delays.

You can show the evolution of capacity and generation (degradation) during the operating period and show other revenues, expenses and balance sheet accounts as they change over time during operation years.

You can show the income & expense statement.

You can show the cash flow statement.

You can show the balance sheet.

You can show the debt service cover ratio (DSCR) as it computes the cash flow available for debt service.

It also computes the benefits to cost ratio (B/C) of the project.

Finally, it computes the other financial ratios such as:

LIQUIDITY RATIOS

SOLVENCY RATIOS

EFFICIENCY RATIOS

PROFITABILITY RATIOS

MARKET PROSPECT RATIOS

 

Download the sample file below:

Model Inputs and Results – Natural Gas Combined Cycle GT

 

Download the complete demo model for a natural gas CCGT power plant in PHP and USD currencies are shown below:

ADV Natgas Combined Cycle Model3 – demo5b

ADV Natgas Combined Cycle Model3 (USD) – demo5b

If you have actual data from your OEM and EPC suppliers, kindly share the data with me or simply enter your live data into the above models and see how the results will change immediately before your eyes. Please email me back the updated demo model with your new data so you may share it will all our readers of this blog.

 

To purchase the PHP and USD models at a discount, click the link below:

Natural Gas-fired CCGT 620 mw Power Project Finance Model Ver. 3 – in USD and PHP Currency

 

You may place your order now and avail of a package for the unlocked model and I will give you one-hour free for assistance in putting your input data into the model (via telephone or email or FB messenger).

Your energy technology selection expert.

Email me for more details and how to order off-line:

energydataexpert@gmail.com

Visit our on-line digital store to order on-line

www.energydataexpert.com

www.energytechnologyexpert.com

 

Natural Gas-fired Combined Cycle Gas Turbine (CCGT) Power Plant Model in African Country Currencies

March 15th, 2017 No Comments   Posted in financial models

Natural Gas-fired Combined Cycle Gas Turbine (CCGT) Power Plant Model in African Country Currencies – with financial ratios for risk analysis

Finding a project finance model template for natural gas-fired CCGT in African country currencies is now made easy using exchange rates to US DOLLAR as of March 14, 2017.

CCGT using natural gas is needed in Africa to develop its human capital and natural resources so it could provide the needed engine for growth. Investments in CCGT power generation technology will provide both base load and intermediate peak load capacities with low CO2 and NOX emissions and particulate emissions that are common from coal-fired and oil-based power generation.

The models also include financial ratios to identify potential risks during the project development stage, such as:

a) Liquidity Ratios (current ratio, quick ratio)

b) Solvency Ratios (debt to equity ratio, equity ratio, debt ratio)

c) Efficiency Ratios (asset turnover ratio, inventory turnover ratio)

d) Profitability Ratios (gross margin ratio, EBITDA margin ratio, return on assets ratio, net profit to assets ratio, return on owners’ equity, return on capital employed ratio)e) Market Prospect Ratios (earnings per share, price earnings ratio, dividend payout ratio, dividend yield ratio)

The sample models are based on the advanced (regulator) template that is easy to use and understand.

Try the samples below (paste the links below into your browser or Google the demo model):

COMBINED CYCLE GAS TURBINE (CCGT) POWER PLANT MODELS

Exchange rates are for the month of March 2017.

 

1 – ALGERIAN – DINAR (1 USD = 109.88583 DZD)

ADV Natgas Combined Cycle Model3 (DZD) – demo5b

2 – ANGOLAN – KWANZA (1 USD = 165.92052 AOA)

ADV Natgas Combined Cycle Model3 (AOA) – demo5b

3 – BENIN

to follow

4 – BOTSWANA – PULA (1 USD = 10.43969 BWP)

ADV Natgas Combined Cycle Model3 (BWP) – demo5b

5 – BURKINA FASO

to follow

6 – BURUNDI – FRANC (1 USD = 1709.35556 BIF)

ADV Natgas Combined Cycle Model3 (BIF) – demo5b

7 – CABO VERDE:

CAPE VERDE – ESCUDO (1 USD = 103.75679 CVE)

ADV Natgas Combined Cycle Model3 (CVE) – demo5b

CFA BCEAO – FRANC (1 USD = 615.35595 XOF)

ADV Natgas Combined Cycle Model3 (XOF) – demo5b

CFA BEAC – FRANC (1 USD = 615.35595 XAF)

to follow

8 – CAMEROON

to follow

9 – CENTRAL AFRICAN REPUBLIC (CAR)

to follow

10 – CHAD

to follow

11 – COMOROS

to follow

12 – DEMOCRATIC REPUBLIC OF CONGO

to follow

13 – REPUBLIC OF THE CONGO

to follow

14 – COTE D’IVOIRE

to follow

15 – DJIBOUTI – FRANC (1 USD = 178.78179 DJF)

ADV Natgas Combined Cycle Model3 (DJF) – demo5b

16 – EGYPTIAN – POUND (1 USD = 17.91116 EGP)

ADV Natgas Combined Cycle Model3 (EGP) – demo5b

17 – EQUATORIAL GUINEA

to follow

18 – ERITREA

to follow

19 – ETHIOPIAN – BIRR (1 USD = 22.76352 ETB)

ADV Natgas Combined Cycle Model3 (ETB) – demo5b

20 – GABON

to follow

21 – GAMBIAN – DALASI (1 USD = 44.60306 GMD)

ADV Natgas Combined Cycle Model3 (GMD) – demo5b

22 – GHANAIAN – CEDI (1 USD = 4.61531 GHS)

ADV Natgas Combined Cycle Model3 (GHS) – demo5b

23 – GUINEA – FRANC (1 USD = 9401.14454 GNF)

ADV Natgas Combined Cycle Model3 (GNF) – demo5b

24 – GUINEA-BISSAU

to follow

25 – KENYAN – SHILLINGS (1 USD = 102.70678 KES)

ADV Natgas Combined Cycle Model3 (KES) – demo5b

26 – LESOTHO – LOTI (1 USD = 13.13712 LSL)

ADV Natgas Combined Cycle Model3 (LSL) – demo5b

27 – LIBERIA

to follow

28 – LIBYAN – DINAR (1 USD = 1.40009 LYD)

ADV Natgas Combined Cycle Model3 (LYD) – demo5b

29 – MADAGASCAR

to follow

30 – MALAWI – KWACHA (1 USD = 726.04992 MWK)

ADV Natgas Combined Cycle Model3 (MWK) – demo5b

31 – MALI

to follow

32 – MAURITANIA

to follow

33 – MAURITIUS – DIRHAM (1 USD = 10.06507 MAD)

ADV Natgas Combined Cycle Model3 (MAD) – demo5b

MAURITIUS RUPEE (1 USD = 35.45235 MUR)

ADV Natgas Combined Cycle Model3 (MUR) – demo5b

34 – MOROCCO

ADV Natgas Combined Cycle Model3 (MUR) – demo5b

to follow

35 – MOZAMBIQUE

to follow

36 – NAMIBIAN – DOLLAR (1 USD = 13.13712 NAD)

ADV Natgas Combined Cycle Model3 (NAD) – demo5b

37 – NIGER

to follow

38 – NIGERIAN – NAIRA (1 USD = 315.26076 NGN)

ADV Natgas Combined Cycle Model3 (NGN) – demo5b

39 – RWANDA – FRANC (1 USD = 826.05649 RWF)

ADV Natgas Combined Cycle Model3 (RWF) – demo5b

40 – SAO TOME AND PRINCIPE

to follow

41 – SENEGAL

to follow

42 – SYCHELLES

to follow

43 – SIERRA LEONE

to follow

44 – SOMALI – SHILLINGS (1 USD = 578L94811 SOS)

ADV Natgas Combined Cycle Model3 (SOS) – demo5b

45 – SOUTH AFRICAN – RAND (1 USD = 13.15694 ZAR)

ADV Natgas Combined Cycle Model3 (ZAR) – demo5b

46 – SOUTH SUDAN – POUND (1 USD = 6.69044 SDG)

to follow

47 – SWAZILAND – LILANGEN (1 USD = 13.13712 SZL)

to follow

48 – TANZANIAN – SHILLING (1 USD = 2234.14742 TZS)

to follow

49 – TOGO

to follow

50 – TUNISIAN – DINAR (1 USD = 2.30285 TND)

to follow

51 – UGANDA – SHILLING (1 USD = 3595.23765 UGX)

to follow

52 – ZAMBIAN – KWACHA (1 USD = 6.62564 ZMW)

.to follow

53 – ZIMBABWE

to follow

OTHER CURRENCIES

EUROPEAN UNION – EURO (1 USD = 1.0765 EUR)

ADV Natgas Combined Cycle Model3 (EUR) – demo5b

UNITED STATES OF AMERICA – US DOLLAR (1 USD = 1.0000 USD)

ADV Natgas Combined Cycle Model3 (USD) – demo5b

PHILIPPINES – PHILIPPINE PESO (1 USD = 49.7830 PHP)

ADV Natgas Combined Cycle Model3 (PHP) – demo5b

 

The reader may request for other international currencies from the Energy Technology Selection Expert and Project Finance Modeling Expert.

Just email me the Country, name of currency and the base rate and forward rate exchange currency per US DOLLAR, and perhaps the OPEX and CAPEX escalation for the Country and the US escalation to assume too.

OTHER TECHNOLOGIES

There are many more renewable (solar CSP, solar PV, wind offshore, wind onshore, mini-hydro, OTEC), conventional (oil genset, oil thermal, coal thermal, petcoke thermal, gas thermal, combined cycle GT, simple cycle GT, geothermal, large hydro), nuclear power, and waste heat recovery systems (gasoline engine, diesel engine, and gas turbines using natural gas, landfill gas, propane, LPG).

Email me for more details and how to order off-line:

energydataexpert@gmail.com

Visit our on-line digital store to order on-line

www.energydataexpert.com

www.energytechnologyexpert.com

 

Combined Cycle and Simple (Open) Cycle Gas Turbine Project Finance Model Template (Financials Tab) – free demo

April 17th, 2016 No Comments   Posted in power generation

Combined Cycle and Simple (Open) Cycle Gas Turbine Project Finance Model Template (Financials Tab) – free demo

This is the latest project finance model template (financials tab or worksheet) that your energy technology selection expert has developed for the various natural gas-fired power generation technologies. Familiarize with the template and if interested, get the full unlocked version for your immediate use. I can also provide data input service or customize further the model.

Natural gas is a clean fuel that may be used in simple cycle (open cycle or Brayton cycle) gas turbines such as those used in jet engines, or when the waste heat is recovered in a heat recovery boiler (Rankin cycle). This two cycles (Brayton and Rankin) combine to raise the overall thermal efficiency from 33% to over 54%.

More »

Summary of inputs and results for project finance models for various power generation technologies – up to Sep 30, 2014 only

September 14th, 2014 No Comments   Posted in cost of power generation

Summary of inputs and results for project finance models for various power generation technologies – up to Sep 30, 2014 only

Dear Friends,

You only have up to September 30, 2014 to purchase the advanced project finance models for conventional, fossil, nuclear and renewable energy power generation technologies.

Beginning Oct 1, 2014, I will be working full-time with a major IPP in the country and I will take a leave in providing project finance models and Feasibility Study and Market Study preparations for a while.

So don’t dilly dally. Order now before I shut down this website for selling such models.

Cheers,

Energy Technology Selection Expert More »

AG&P plans big power plant

August 23rd, 2013 No Comments   Posted in Energy Supply, Uncategorized

AG&P plans big power plant

By Alena Mae S. Flores | Posted on Aug. 17, 2013 at 12:01am

http://manilastandardtoday.com/2013/08/17/agp-plans-big-power-plant/

Atlantic, Gulf and Pacific Company of Manila Inc. will build a 2,400-megawatt combined cycle gas turbine power plant project inside the PNOC AFC Industrial Estate in Bataan.

AG&P is an industrial process outsourcing company providing fabrication and assembly, modularization and asset management services to the oil and gas, mining, power and civil infrastructure sectors.

The industrial estate, meanwhile, is owned by PNOC Alternative Fuels Corp., formerly known as PNOC Petrochemical Development Corp. until its articles of incorporation was amended on July 13, 2006. More »

Biomass, Coal and Oil Thermal, Diesel and CCGT Levelized Tariff, Levelized Cost and Financial Model

November 29th, 2009 2 Comments   Posted in financial models

Biomass, Coal and Oil Thermal, Diesel and CCGT Levelized Tariff, Levelized Cost and Financial Model

The following is a snippet of my state-of-the-art project finance model for calculating levelized tariff, levelized cost of energy, and financial model (generation, fuel requirement, income statement, cash flow statement, balance sheet and financial ratios). More »

Gas Turbine and CCGT LevelizedTariff, Levelized Cost and Financial Model

November 26th, 2009 5 Comments   Posted in financial models

Gas Turbine and CCGT LevelizedTariff, Levelized Cost and Financial Model

The following is a snippet of my state-of-the-art project finance model for calculating levelized tariff, levelized cost of energy, and financial model (generation, fuel requirement, income statement, cash flow statement, balance sheet and financial ratios).  To secure a copy of the spreadsheet, click the ENERGY DATA page for arrangements.

More »