How to use the advanced (regulator) diesel genset power plant project finance model

July 22nd, 2017 No Comments   Posted in financial models

How to use the advanced (regulator) diesel genset power plant project finance model

Finding an easy-to-use project finance model for a diesel genset 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 diesel genset power plant. From the preliminary design and cost estimates, the top management would want to know if the business idea of going into diesel genset 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) = 1,040 $/kW (target cost)

EPC cost portion = 585 $/kW (computed by model)

refurbishment cost = 5% of EPC cost on the 10th year (overhaul)

fixed O&M cost = 10.73 $/kW/year (target cost) = 204.08 ‘000$/unit/year (computed by goal seek)

variable O&M cost = 33.28 $/MWh (target cost) = 111.79 ‘000$/MW/year (computed by goal seek)

general admin cost = 10.00 ‘000$/year (target cost)

 

Thermal power plant inputs:

Gross heating value of diesel genset fuel = 18,600 Btu/lb

Plant heat rate = 10,663 Btu/kWh (32.00% thermal efficiency)

Density of diesel fuel = 0.845 kg/L

Cost of diesel genset fuel = 30.00 PhP/L = 705.86 USD/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 = 25.00 MW/unit x 1 unit = 25.00 MW

 

Plant Availability Factor, %                                    40.82% (computed by goal seek)

Load Factor, %                                                     100.00% (assumed)

Allowance for losses & own use, %                         2.00% (assumed)

Net Capacity Factor after losses & own use, %    40.00% (target net capacity factor)

Degradation rate, %                                               0.5%

 

construction period = 24 months (start 2014)

operating period = 20 years (start 2016)

 

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

Power plant footprint (ha)                                   10.00

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

Equipment Cost ex BOP, Transport ($000/MW) $465.76 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) 10.00
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) 10.00
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% 55.4%

 

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

Uses of Fund:
   Land Cost $50
   EPC (Equipment, Balance of Plant, Transport) $14,613
   Transmission Line Interconnection Facility $400
   Sub-Station Facility $786
   Development & Other Costs (Civil Works, Customs Duty) $4,400
   Construction Contingency $792
   Value Added Tax $1,281
   Financing Costs $2,052
   Initial Working Capital $1,607
Total Uses of Fund – $000 $25,982
                                 – PhP 000 1,306,832
Sources of Fund:
   Debt $18,188
   Equity $7,795
Total Sources of Fund $25,982

 

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

Local Capital = 55 %

Foreign Capital = 45 %

 

Balance Sheet Accounts:

Receivables = 30 days of revenue

Payables    = 30 days of expenses

Inventory    = 120 days of consumables

 

Imported Capital Equipment: (fossil fuel)

Customs duty = 0%

Value added tax (VAT) = 0%

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% (55% local, 45% 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)

 

Results of Financial Analysis:

 

First year tariff (Feed-in-Tariff) = 14.26954 P/kWh = 0.28371 USD/kWh

(at zero equity NPV)

 

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

Item PhP 000 PhP/kWh
Fuel        15,720,785 9.42053
Lubes                1,877 0.00112
Var O&M          2,848,052 1.70667
Total        18,570,714 11.12832
MWh net          1,668,780
SRMC        18,570,714 11.12832
Fix O&M            741,261 0.44419
Capital Cost          4,500,753 2.69703
LRMC        23,812,727 14.26954

 

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

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

NPV        = 0.00    ‘000$

PAYBACK = 10.12    years

 

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

IRR          = 11.35        % p.a.

NPV        = (201,064)  ‘000$ (negative since IRR < 14.00%)

PAYBACK = 7.50        years

——————————————————————————————-

The above runs were based on goal-seek to make equity NPV = 0 (to meet equity IRR target of 16.44% 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 – Diesel Genset

 

Download the complete demo model for a diesel genset power plant in PHP and USD currencies are shown below:

ADV Diesel Genset Model3 – demo5b

ADV Diesel Genset Model3 (USD) – demo5b

 

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

CI Diesel Genset 50 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 with free guidance on using it. The list price of the diesel genset model is USD1,400 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

 

Advanced (ADV) Project Finance Models for Conventional, Fossil, Nuclear and Renewable Energy Power Generation Technologies – Price List and Specs

September 28th, 2014 No Comments   Posted in cost of power generation

Advanced (ADV) Project Finance Models for Conventional, Fossil, Nuclear and Renewable Energy Power Generation Technologies – Price List and Specs (offer up to Sep 30, 2014 only)

Your power generation technology selection expert is pleased to make a final call to all project finance and power plant modelers to purchase the Advanced (ADV) Project Finance Models for Conventional, Fossil, Nuclear and Renewable Energy Power Generation Technologies.

The model consists of the following worksheets/tabs: More »

Why the Philippines is Lacking in Power Supply Always and is Expensive Compared to its Asian Neighbors

September 24th, 2014 No Comments   Posted in cost of power generation

Why the Philippines is Lacking in Power Supply Always and is Expensive Compared to its Asian Neighbors

Following is the outline of my power point presentation on “Why the Philippines is Lacking in Power Supply Always” and  why the Philippines has one of the highest power rate in Asia and the World.

If you need the pdf version, please email me so I could respond to your request.

 “Why the Philippines is Lacking in Power Supply Always”

By: Marcial T. Ocampo

        Energy Technology Selection and Optimization Consultant at

        OMT Energy Enterprises 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 »

ADV Diesel Genset Model.xls

ADV Diesel Genset Model.xls

Diesel Genset (compression ignition or CI engine) is the most common form of power generation for stand-by as well as peaking load power. In remote and off-grid areas, it also serves as base load power. A diesel power station usually consists of 2-3 larger base load gensets and 2-3 smaller peak load gensets. Base load units have 75% capacity factor while peak load units have 50% load factor.

In combination with intermittent renewable energy (RE) such as wind energy and solar PV, the RE component is limited to maximum 20% of total peak load MW and with wind capacity factor of 25% and solar PV capacity factor of 15%, this translates to 3-5% of MWh penetration only.

This advanced model for diesel genset (diesel oil or fuel oil) makes use of the basic assumptions  for rated capacity (5.0 MW base load and 2.5 MW peak load), capacity factor (80%), plant own use (10%), and 0.20% plant degradation rate. More »

Get Your Energy Technology Articles the Easy Way – Shopping Cart

June 19th, 2012 No Comments   Posted in energy technology expert

Get Your Energy Technology Articles the Easy Way – Shopping Cart

You can now order on-line your energy technology articles the easy way – via the Shopping Cart.

Once you have decided to purchase, proceed to order via the shopping cart and pay thru PayPal thru your bank account or your credit card and download immediately the models. More »

Get Your Project Finance Models the Easy Way – Shopping Cart

Get Your Project Finance Models the Easy Way – Shopping Cart

You can now order on-line your project finance models the easy way – via the Shopping Cart.

Once you have decided to purchase, proceed to order via the shopping cart and pay thru PayPal thru your bank account or your credit card and download immediately the models. More »

Wind-Diesel Hybrid Project Finance Model with Wind Resource Assessment – now available

March 17th, 2012 1 Comment   Posted in renewable energy

Wind-Diesel Hybrid Project finance Model with Wind Resource Assessment – now available

Analyzing the economics of a wind-diesel hybrid power plant has now become simple with the new wind-diesel project finance model having a wind energy resource simulator. Avoid the time consuming hassle by purchasing this latest product offering from your energy technology selection expert. More »

Shopping Cart for my Power Generation and Fuel Cycle Technology Power Pt Presentation and Articles – new price list

August 13th, 2011 No Comments   Posted in power generation

Shopping Cart for my Power Generation and Fuel Cycle Technology Power Pt Presentation and Articles – new price list

Due to the tremendous interest and response from avid readers to this blog, your energy technology selection and business development expert is now automating the order taking, payment and downloading of its various power generation power pt presentable and articles as well as project finance models.

Here is the new price list for my energy data base, power plant emission, feed-in-tariff, renewable energy resource assessment and project finance models for conventional, renewable and nuclear energy.

If you are investing in energy and power generation projects in the Philippines or any other country, please email me so you could outsource to me the gathering of all energy, oil and power consumption, demand and projections to support the market study of your feasibility studies. More »

Diesel Genset (fuel oil, diesel oil) Power Plant Model

August 8th, 2011 2 Comments   Posted in cost of power generation

Diesel Genset (fuel oil, diesel oil) Power Plant Model

Buy your diesel genset project finance model now for only $300 and start your emergency power generation business. Use this model to hybrid your renewable energy project to provide 24/7 hours of electricity service. More »