ADV Natural Gas Combined Cycle Gas Turbine (CCGT) power plant model (ver. 4) rev2
ADV Natural Gas Combined Cycle Gas Turbine (CCGT) power plant model (ver. 4) rev2
Updated Sep 23, 2021
Click the link to know more combined cycle gas turbine (CCGT) power generation technology (pdf)
A quick user guide on how to use the 3 model versions may be found in the document below:
Click the document below to show the tables (***) that could not be displayed properly by LinkedIn:
Yes, your energy technology expert has updated its advanced natural gas IGCC-fired power plant from its current capability of 5 years (60 months) and 30 years, based on an actual request by a model purchaser.
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 = 3 years x 12 = 36 months
operating period = 30 years (economic life)
gross capacity = 620.000 x 1 unit = 620.000 MW
net capacity factor = % availability x % load factor x (1 - % own use)
= 96.40% x 95% x (1 – 10%) = 87%
fist year annual generation (net) = 620.000 x 365 x 24 x 87%
= 4,725,144MWh/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 = 1,000 $/kW
total capital cost = 1,000 x 620.000 x 1,000 = 620,000,000 USD
fixed O&M = 3% p.a. of total capital cost = 3% x 620,000,000USD / (620.000 x 1,000 kW)
= 30.00 USD/kW/yr
variable O&M = 1% p.a. of total capital cost = 1% x 620,000,000USD / (4,725,144MWh)
= 1.31 USD/MWh
fixed G&A (general and admin costs) = (20,000 / 53 USD/mos) x 1.30 fringe x 13 mos/yr x 10 engineers = 63,770 USD/yr
natural gas fuel cost = 8.628 USD/GJ
efficiency of fuel energy to electricity efficiency = 48.40 % GHV
plant heat rate = 3,412 / 48.40% = 7,050 Btu/kWh
GHV of natural gas fuel = 22,129 Btu/lb
Lube consumption = 5.4 g/kWh
Density of lube oil = 0.98 kg/L
Lube oil rate = (5.4 /1000) / (0.98 kg/L) = 0.0055 L/kWh
Lube oil cost = 200 PHP/L
Capital structure:
30% equity with 14.00% p.a. target IRR
70% debt with:
50% local debt = 10% p.a. interest, 10 years term,
50% 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
depreciation rate = 1 / economic life = 1/30 per year
days receivables = 30 days
days payables = 30 days
days fuel inventory = 60 days
refurbishment (overhaul cost) = 5% of original cost, on the 15th year
salvage value = 10% of original cost
With Board of Investments (BOI) incentives tax regime (1 = none, 2 = BOI, 3 = PEZA) = 1
income tax holiday (ITH) = 0
income tax rate after ITH = 30% of taxable income
property tax rate from COD for RE = 1.5% of 80% valuation of net book value (NBV) of properties (equipment, building), land is not depreciated while equipment and building are depreciated
VAT on imported equipment = 12% (70% of which is recoverable on the 5th year)
Customs Duty on imported equipment = 0% (none)
Recovery rate of VAT =0% on 0th year after COD (none)
LGU tax = 1% of last year's revenues
Gov't share (for RE projects) = 1% (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.
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.
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Following are the results for Deterministic model:
% Local Component (funded by local debt) = 49%
% Foreign Component (funded by foreign debt) = 51%
Capital cost buildup results: (table found in the doc file):
*** Table
First year tariff (LCOE, LRMC) to hit target equity IRR = 5.29321 PHP/kWh
= 0.09987 USD/kWh
Levelized tariff (NPV of asset value / NPV of generation), discounted at pre-tax WACC
= 4.89505 PHP/kWh = 0.09326 USD/kWh
SRMC = 1.88008 PHP/kWh = 0.09987 USD/kWh
Pre-tax WACC =11.98% p.a.
After-tax WACC = 8.39% p.a.
WACC = (30% x 14.00% p.a.) + 70% (49% x 10% p.a. + 51% x 8% p.a.) = 10.49% p.a.
Equity IRR = 14.00% p.a.
Equity NPV = 0.0
Equity PAYBACK = 10.14 years
Project IRR = 11.51% p.a.
Project NPV = -4,842,894‘000 PHP
Project PAYBACK = 7.44 years
Debt Service Cover Ratio (DSCR) min = 0.30
Debt Service Cover Ratio (DSCR) ave = 1.34
Debt Service Cover Ratio (DSCR) max = 1.83
Benefits to Cost (B/C) Ratio, discounted at pre-tax WACC = 1.117
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 natural gas fuel from 1.299, 1.169, 1.053, 0.947 and 0.853 PHP/kg, 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:
*** 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:
How to run the deterministic models:
Update first the blue inputs
Calibrate the model to meet the targets (run macro 2, ctrl + f):
View the results:
How to run the sensitivity runs (NEW models) – up to 5 sets of inputs or scenarios:
How to run the stochastic or probabilistic runs (MCS models) – up to 500 to 1,000 random trials)
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: (automatic except data tables, 100 iterations, enable editing, enable content)
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 Sep 30, 2021. Hurry. Limited Offer Only.
Marcial Ocampo
63-967-3143774 (globe mobile, Viber)
marcial.ocampo (Skype)
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