Financial Modeling for Renewable Energy Projects

Financial Modeling for Renewable Energy Projects

Financial Modeling for Renewable Energy Projects

You will learn how to model a project financied either by one or multiple equity sources/financiers. Delegates will learn to calculate project returns (IRR and NPV), set PPA prices (with and without escalators), Using model switches in Microsoft Excel to calculate Loan Capitalization based on grace periods, interest amortization among other.

Delegates attending this class will also learn the importance of workbook organization and information presentation.

Financial Modeling for Renewable Energy Projects Training teaches you how to efficiently develop, modify and analyze financial models in the renewable energy sector. The course covers essential topics including funding mechanics, operational analysis and investment metrics and gives you a robust platform for analysis in the most sophisticated environments.

You will learn the financial modeling techniques needed to build a best practice financial model suitable for debt structuring, investment analysis and operational scenario evaluation.

Financial Modeling for Renewable Energy Projects will enable you to

  • Master best practice techniques for financial modelling of renewable energy projects to achieve flexibility and robustness
  • Build a flexible and powerful scenario manager to analyze your project’s sensitivity to key drivers
  • Prepare trusted analysis of commercial outputs tailored to investors and financiers, with a focus on valuation and risk
  • Understand a flexible framework for tax modelling, adaptable to regional jurisdictions
  • Develop flexible funding structures for analysis of project finance debt and other funding sources

Do you build or analyze project finance models in the renewable energy sector?

If you need to build, review or analyze project finance models in the renewable energy sector, then this course is for you. Typical attendees include analysts, financial managers from project companies, advisors and financiers.

Required knowledge: Excel, Finance and the Renewables sector

It is expected that you have some previous experience with financial models in Excel, and foundation knowledge of investment concepts such as NPV and cash flows analysis.

 Develop a strong understanding of financial model architecture and process in the renewable energy sector, to ensure the big picture is always in mind:

  • Understand how to envision a financial modeling process from beginning to end
  • Recognize the process similarities in modeling for wind, solar or hydro projects and learn which modules can be standardized across energy sources
  • Gain insights into a typical financial model development process – step-by-step- for a renewable energy model
  • Benefit from a flexible timing framework to underpin the model architecture – an essential feature for projects where the dates / timing may change over time (which includes 99% of all projects)
  • Capture the financial implications of delays (construction / operations) in the project time table with a structured financial modeling approach

Representing the construction phase of a renewable energy project in the Excel model:

  • Discuss funding alternatives for renewable energy projects (bank debt, capital markets, government supported structures, export and agencies) and how this impacts the financial modelling process
  • Incorporate flexible functionality for construction delays and/or cost over-runs
  • Integrate typical renewable energy construction contracts and contingencies

Modelling of pricing and purchase agreements in renewable energy:

  • Learn about power purchase agreements (PPA)
  • Integrate both PPA and spot pricing into the operational calculations
  • Integrate flexible renewable subsidy mechanisms

Forecasting and modeling of production metrics:

  • Understand application of different forecasting methods, the appropriate allocation of each
  • Learn to integrate multiple probability exceedance profiles concurrently (e.g., P50, P90)
  • Convert gross production to net production by accounting for: Operational ramp up schedules, impact of production unit (e.g., turbines) availability and efficiency, degradation and gains and losses of production such as seasonality of renewable energy.

Financial modelling techniques for operational costs and project maintenance:

  • Integrate fixed and variable costs typical of renewable energy projects
  • Learn how to model flexible volume driver controls for variable costs
  • Understand the important role of real vs. nominal costs (escalation) and how to integrate powerful indices
  • Discuss different reserve account structures (i.e., maintenance)

Project finance modelling: Integrate project finance debt:

  • Develop comprehensive debt modelling mechanics, with a specific application of DSCR sculpted repayment using first principle calculation for full transparency
  • Review other repayment options including bullets and linear commonly used in project finance
  • Discuss debt sizing methodologies

Financial return analysis: Project Return – essential financial model output

  • Inclusion of best practice net present value (NPV) and internal rate of return (IRR) calculations for the renewable energy project
  • Discussion about key differences between XNPV vs. NPV functions
  • Limitations and dangers in the application of the IRR function
  • Calculate key outputs e,g. Levelized cost of electricity

Master Scenario Management with an efficient financial model structure:

  • Work faster, better with more insights using Excel’s Scenario Management solutions
  • Use commercial scenario analysis to assess the working of the financial model, and to sense check your logic and calculations
  • Build confidence in your analysis through pre-programmed combinations of model inputs

How to Sign up for Financial Modeling for Renewable Energy Project Training

We train groups of minimum 5 persons in a location of your choice. Kindly contact David K. Kandie on david.kandie@opencastlabs.co.ke or Request a Proposal for Onsite Training

 

 

 

 

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