ADV Coal-Fired PC subcritical coal-fired power plant model (rev. 4)
ADV Coal-Fired PC subcritical coal-fired power plant model (rev. 4)
UPDATED Aug 25, 2021
To know more about coal-fired power generation technologies, click on the link:
A quick user guide on how to use the 3 model versions may be found in the documents below.
The documents also show the tables (***) that could not be displayed properly by LinkedIn:
Yes, your energy technology expert has updated its advanced Subcritical coal-fired power plant to handle construction period up to 5 years (60 months) and 35 years of plant operation.
Here are the minimal starting inputs to develop your initial model, for further refinements as your study gets more up to date data:
construction period = 5 years’ x 12 = 60 months
operating period = 35 years (economic life)??????????????????????????????????????????????????????????????????????????????????????
gross capacity = 600 MW
net capacity factor = 85% = % availability x % load factor x (1 - % own use)
= 96.37% x 98% x (1 - 10%) = 85%
fist year annual generation (net) = 600 x 365 x 24 x 85%
= 4,467,600 MWh/yr
Plant capacity degradation rate = 0.2% per year
Capital cost buildup inputs and % Local Cost (LC) composition: (table found in the doc file):
*** Table
all-in capital cost = 2,934 $/kW
total capital cost = 2,934 x 600 x 1,000 = 1,760,400,000 USD
fixed O&M = 3% p.a. of total capital cost = 3% x 1,760,400,000 USD / (600 x 1,000 kW)
= 88.02 USD/kW/yr
variable O&M = 1% p.a. of total capital cost = 1% x 1,760,400,000 USD / (4,467,000 MWh)
= 3.94 USD/MWh
fixed G&A (general and admin costs) = (20,000 / 53 USD/mos) x 1.30 fringe x 13 mos/yr x 50 engineers = 318,870 USD/yr
NOTE: you may set select flag (cell Q32 = 1) to 1 to select the old values of the model (in brown font) or to zero (cell Q32 = 0) to select the default calculations for the targets ($/kW, $/kW/yr and $/MWh) shown above.
coal fuel cost = 85.00 USD/MT
coal fuel energy to electricity efficiency = 43.66 % GHV
plant heat rate = 3,412 / 43.66% = 7,816 Btu/kWh
GHV of coal fuel = 10,000 Btu/lb
Capital structure:
30% equity with 14% p.a. target IRR
70% debt with:
57% local debt = 10% p.a. interest, 10 years’ term,
43% foreign debt = 8% p.a. interest, 10 years’ term
local and foreign upfront financing fees = 2.0% one time
local and foreign commitment fees = 0.50% p.a. on undrawn loan
local and foreign loan grace period = 6 months
local and foreign loan debt service reserve (DSR) = 6 months
days receivables = 30 days
days payables = 30 days
days fuel inventory = 60 days
refurbishment (overhaul cost) = 10% of original cost, on the 10th year
salvage value = 10% of original cost
With Board of Investments (BOI) incentives tax regime (1 = none, 2 = BOI, 3 = PEZA):
BOI tax incentives (enter 2)
income tax holiday (ITH) = 0
income tax rate after ITH = 10% of taxable income
property tax rate from COD = 2% of 80% valuation of net book value (NBV) of properties (equipment, building), land is not depreciated while equipment and building are depreciated
depreciation rate = 1 / economic life = 1/35 per year
LGU tax = 1% of last year's revenues
Gov't share (for RE projects) = 0% (for fossil and non-RE projects)
ER 1-94 contribution = 0.01 PHP/kWh sold
Withholding tax on interest (foreign currency) = 10%
Gross receipts tax on interest (local currency) = 1%
Based Foreign Exchange Rate = 53.00 PHP/USD
Forward Fixed Exchange Rate = 53.00 PHP/USD
Inflation Rate:
Local CPI = 0.0% p.a. (OPEX) = 4.02% p.a. (CAPEX)
Foreign CPI = 0.0% p.a. (OPEX) = 2.0% p.a. (CAPEX)
With the above information and using the Discounted Cash Flow Internal Rate of Return (DCFIRR) method, you can determine the equity and project returns (IRR, NPV, PAYBACK, DSCR) and all financial ratios, show income and expense statement, balance sheet and cash flow.
Following are the results for Deterministic model:
% Local Component (funded by local debt) = 57%
% Foreign Component (funded by foreign debt) = 43%
Capital cost buildup results: (table found in the doc file):
*** Table
First year tariff (LCOE, LRMC) to hit target equity IRR = 6.84818 PHP/kWh
= 0.12921 USD/kWh
Levelized tariff (NPV of asset value / NPV of generation) = 5.58642 PHP/kWh
= 0.10540 USD/kWh
SRMC = 2.00667 PHP/kWh = 0.03786 USD/kWh
Pre-tax WACC =12.14% p.a.
After-tax WACC = 8.50% p.a.
WACC = (30% x 14% p.a.) + 70% (57% x 10% p.a. + 43% x 8% p.a.) = 10.60% p.a.
Equity IRR = 14.00% p.a.
Equity NPV = 0.0
Equity PAYBACK = 9.67 years
领英推荐
Project IRR = 11.58% p.a.
Project NPV = -12,084,210 ‘000 PHP
Project PAYBACK = 7.07 years
Debt Service Cover Ratio (DSCR) min = 1.12
Debt Service Cover Ratio (DSCR) ave = 1.41
Debt Service Cover Ratio (DSCR) max = 1.76
Benefits to Cost (B/C) Ratio, discounted at pre-tax WACC = 0.906 (less than unity)
Financial Ratios (liquidity ratios, solvency ratios, efficiency ratios, profitability ratios, market prospect ratios) = see bottom of the Financials worksheet)
Results for Sensitivity Model (NEW model):
If we vary the price of the coal fuel from 85, 80, 75, 70, and 65 USD/MT, the resulting WACC and equity and project returns are as follows (table found in the doc file):
*** Table
The sensitivity model also uses the Excel Table Function to calculate automatically (pressing F9) to determine the impact of minute or incremental changes (user inputs) of debt ratio, forward exchange rate, unit capacity, plant availability factor, plant degradation rate, gross heating value (GHV) of fuel, plant heat rate, fuel cost, construction period, and operating period (e.g. independent variables) with the dependent variables: net capacity factor, equity and project returns (IRR, NPV, PAYBACK), pre-tax WACC, after-tax WACC, SRMC and LRMC (or LCOE).
When the sensitivity switch (sens = cell U116 = 1 in the Inputs & Assumptions worksheet) is set to 1 and you press F9, the Excel Table Function automatically updates the table. Example is the impact of changing the debt ratio from 0.01% to 70% to 90% in intervals of 10% to the above mentioned dependent variables (then set cell U116 to zero again) before you save and exit the model to make it ready for the next run):
*** Table
Results for Monte Carlo Simulation (MCS model):
You enter the number of random trials (500 – 1,000). If number of trials is in bold font, the MCS model will generate a distribution graph for each of the 9 variables being simulated (equity and project returns such as IRR, NPV and PAYBACK, pre-tax WACC, SRMC and LRMC). For lack of space, the SRMC and LRMC are not displayed in the table below (table found in the doc file):
*** Table
You can view the distribution graph from the file:
It is now available too in 3 versions: deterministic (fixed inputs), sensitivity (varying set of inputs or scenario) and stochastic or probabilistic inputs (randomly changing set of inputs) that will help you as project developer to identify project risks.
How to run the deterministic models:
Update first the blue inputs
Calibrate the model to meet the targets (run macro 2, ctrl + f):
1.???NCF?????target = 83%
2.???Local?????component of project cost target = 57% (43% foreign component)
3.???All-in?????capital cost target = 4,000 $/kW
4.???Fixed?????O&M target = 120.00 $/kW/yr
5.???Variable?????O&M target = 5.50 $/MWh
6.???Fixed?????G&A target = 63.77 ‘000 $/yr
7.???Set?????the project NPV (100% equity, 0% debt) to zero (run macro 3, ctrl + d)
8.???Set?????the equity NPV (30% equity, 70% debt) to zero (run macro 1, ctrl + e)
View the results:
1.???Inputs?????& Assumptions: shows all the inputs and the outputs summary so you?????will see immediately the impact 0f changing any input. It also shows the?????current values of the LCOE (levelized cost of energy) or LRMC (long run?????marginal cost = annualized capital and fixed costs + SRMC) and SRMC (short?????run marginal cost consisting of variable costs and fuel and lube costs)
2.???Tariff?????Breakdown
3.???Sensitivity?????Analysis (copy paste value of each run into the case column)
4.???Construction?????Period (view the total investment cost breakdown, annual capital cost?????drawdown)
5.???Operating?????Period (view the annual operating data: capacity, generation, tariff,?????revenue, exchange rate, fuel cost, lube oil cost, fixed O&M cost, variable?????O&M cost, refurbishment or overhaul cost, G&A cost, land lease,?????land value, depreciation cost, net book value, property tax, LGU tax,?????gov’t share, ER 1-94 contribution, income tax, working capital or?????receivables, payables, inventory, input/output VAT, initial working?????capital and other assets, other assets like VAT recovery expense, foreign?????debt and local debt amortization tables)
6.???Financials:?????(income & expense statement, retained earnings and capital, cash flow?????statement, required debt service reserve (DSR) balance, balance sheet,?????equity IRR and PAYBACK, project IRR and PAYBACK, debt service cover ratio?????(DSCR), benefits and costs analysis ratio, and other financial ratios like?????liquidity ratios, solvency ratios, efficiency ratios, profitability ratios?????and market prospect ratios)
7.???Asset?????Base FiT (calculates the NPV of total assets, annual generation and?????levelized cost using the pre-tax WACC as discounting rate)
How to run the sensitivity analysis (NEW) models – up to 5 sets of inputs or scenarios:
1.???Update?????first the blue inputs
2.???Calibrate?????the model to meet the targets (run macro 2, ctrl + f)
3.???Set?????the project NPV (100% equity, 0% debt) to zero (run macro 3, ctrl + d)
4.???Set?????the equity NPV (30% equity, 70% debt) to zero (run macro 1, ctrl + e)
5.???Run?????the sensitivity macro 8 (ctrl + q) for the various scenarios found inputs?????& assumptions worksheet columns V to Z which uses the Table Function?????of Excel to run automatically case 1 (base case), case 2, case 3, case 4?????and case 5 columns. The results are in rows 1 to 14 for: equity and?????project IRR, NPV, PAYBACK, WACC, pre-tax, after-tax, and first year?????tariff.
How to run the stochastic or probabilistic (MCS) models – up to 500 to 1,000 random trials)
1.???Before?????running the MCS models, you have to load first the Monte Carlo Simulation?????(MCS) add-in that is also part of the model package. It is free and?????downloadable from the internet.
2.???Run?????the MCS model and update first the blue inputs and set deterministic flag?????to 1 (cell F3 = 1)
3.???Calibrate?????the model to meet the targets (run macro 2, ctrl + f)
4.???Set?????the project NPV (100% equity, 0% debt) to zero (run macro 7, ctrl + o)
5.???Set?????the equity NPV (30% equity, 70% debt) to zero (run macro 6, ctrl + n)
6.???Run?????the stochastic macro 5 (ctrl + m) for the Monte Carlo Simulation (MCS).
7.???After?????500 to 1,000 trials, you can view the results in the Sensitivity worksheet?????such as: mean, standard error, median, standard deviation, variance,?????skewness, Kurtosis, expected value, standard deviation x 1.96, 95% of all?????outcomes – max and min
8.???You?????can revert back from stochastic modeling to deterministic modeling by?????setting the deterministic flag from 0 (stochastic) to 1 (deterministic) in?????cell F3 at the Inputs & Assumptions worksheet (table found in the doc?????file):
When an input variable changes in random by +/- 10% from the fixed input, and the model fails to converge the IRR or NPV, that variable is a potential project risk in the proposed project and must be estimated carefully and accurately as it can bring the model to an undefined value for IRR and NPV.
For instance, the diesel genset model cannot handle more than +/- 3% variation in any of its input variable as it will result in undefined IRR and NPV, so when running the stochastic or probabilistic version (MCS or Monte Carlo simulation), the maximum random error must be less than 3% for the MCS model to arrive at a stable answer for IRR and NPV.
Use the USD model to model any local currency. For example, you can use the USD model to mimic the PHP model by entering the exchange rate of 53.00 PHP to a USD, and you can get the same result as running the PHP model.
To run the demo (locked reports) model, please click the link below:
deterministic (fixed inputs)
sensitivity (5 scenarios expandable by user by adding case columns)
stochastic (randomly changing inputs for risk analysis)
The Monte Carlo Simulation uses a default +/- 10% range (user may change the range). If the IRR or NPV does not converge at the assumed % range, then that input variable is a potential risk that needs to be mitigated by estimating it correctly and limiting the value of that input variable between that allowable range as the IRR or NPV becomes undefined.
X (random) = X (fixed) * [90% + (110% - 90%) * rand() ]
where X = electricity tariff, plant availability factor, fuel heating value, debt ratio, plant capacity per unit, variable O&M cost $/MWh, fixed O&M cost $/kW/yr, fixed G&A cost $/yr, cost of fuel, plant heat rate and all-in capital cost
rand() = Excel random number generator, between 0 (zero) and 1.0 (one)
Monte Carlo Simulation (MCS) add-in = you must run this first before you run the MCS models above
and if you want to run the unlocked model (unlocked reports), please order, remit payment thru PayPal and download immediately the unlocked models for the 3 versions (deterministic USD400, sensitivity USD400 and stochastic USD400 = USD1,200 for all 3 versions in PHP and USD currencies) using the link in my on-line store:
50% discount (600 USD) till Feb 28, 2021. Hurry. Limited Offer Only.
Marcial Ocampo
63-967-3143774 (globe mobile, Viber)
marcial.ocampo (Skype)