EU GCC CLEAN ENERGY NETWORK II · Net Present Value (NPV)-62.413 € 1.973.870 € Internal Rate of...

Funded by

EU GCC CLEAN ENERGY NETWORK IIJoin us: www.eugcc-cleanergy.net Contact us: [email protected]

Dimitrios Angelopoulos & Dimitrios Kanellopoulos

Funded by

Techno-economic Analysis

• Examination of the economic feasibility of wind power investments;

• Calculation of the appropriate economic indicators;

• Sensitivity analysis of the key input parameters.

Funded by

Economic Indicators

• Net Present Value (NPV)

• Internal Rate of Return (IRR)

• Payback Period

• Levelized Cost of Electricity (LCOE)

• Profitability Index (PI)

Funded by

Net Present Value

• Differences between the present values of cash inflows and cash outflows.

• Most usable metric for assessment of investment’s profitability.

• Positive NPV expresses economic feasibility of the project examined.

• Project with the highest NPV is considered as most preferable for investment.

– 𝐶𝑂: Investment cost

– 𝑃𝑉𝑡: Present value of cash flows in year t

– 𝑑 : Discount rate

– 𝑁: Project duration (in years)

– 𝑆𝑉𝑁: Salvage value of investment in Nth year

𝑁𝑃𝑉 = −𝐶𝑂 +

𝑡=1

𝑁𝑃𝑉𝑡1 + 𝑑 𝑡

+𝑆𝑉𝑁(1 + 𝑑)𝑁

Funded by

Net Present Value

Advantages

+ Direct measure of the profit contribution to the stakeholders (equity and debt providers).

+ Easy to calculate.

+ Inflation and returns are taken into account.

Weaknesses

- Projects with different project lifetimes may not be directly compared with each other.

- Sensitive to reliability of future cash flows.

- It is assumed that the future cash flows are reinvested with the discount rate of the initial investment.

- Project size in not taken into account.

Funded by

Economic Indicators



• Payback Period



Funded by

Internal Rate of Return

• It is the interest rate that makes NPV of a project equal to zero.

• Every examined investment/project should provide higher IRR than the enterprise’s cost of capital.

• The project with the highest IRR is, then, promoted for implementation.

Basic Assumptions

• The investment is held till maturity.

• All intermediate cash flows are reinvested at the IRR.

• Identical time intervals between two cash flows are necessary.

𝑁𝑃𝑉(𝑑=𝐼𝑅𝑅) = 0

Funded by

Internal Rate of Return

Advantages

+ Easy to understand.

+ Expresses returns and not absolute profit values (as NPV) – most preferable from investors.

+ May be estimated regardless of the discount rate level.

Weaknesses

- Difficulty of IRR calculation, especially, in cases of non-stable cash flows.


- When two examined projects are mutually exclusive, then the investment with the highest IRR is not exclusively the most profitable.

Funded by

NPV vs IRR

Timing of cash flows and project sizes may result in conflicting outcomes in

the NPV and IRR methods.

Attention!!

Funded by

Economic Indicators



• Payback Period



Funded by

Payback Period

• Represents the time period (in years) needed in order to “pay back” project’s initial investment.

• The minimum acceptance and ranking criteria are set by decision makers/investors.

𝑃𝑎𝑦𝑏𝑎𝑐𝑘 𝑃𝑒𝑟𝑖𝑜𝑑 =𝐼𝑛𝑖𝑡𝑖𝑎𝑙 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡

𝐶𝑎𝑠ℎ 𝐼𝑛𝑓𝑙𝑜𝑤 𝑝𝑒𝑟 𝑃𝑒𝑟𝑖𝑜𝑑

Funded by

Payback Period

Advantages

+ Easy to understand and use

+ Biased towards liquidity

+ Is based on earlier cash flows

Weaknesses

- Ignores the time value of money

- Ignores differences in risk of alternative investments

- Uses an arbitrary cutoff point to determine which projects to reject

- Ignores cash flows after the payback period

Advancement - Discounted Payback Period

Takes into consideration the time value of money

Investment decision is based on its comparison with an acceptable time horizon

𝑁𝑃𝑉(𝑁=𝐷𝑃𝑃) = 0

Funded by

Economic Indicators



• Payback Period



Funded by

Levelized Cost of Electricity

• Representation of the cost of electricity produced per unit (euro/MWh)

• Inclusion of annualized electricity production and cost, at present values

• Direct comparison of LCOE with the electricity selling price

• Acceptance of investments with the lowest LCOE

𝐿𝐶𝑂𝐸 =𝐼𝐶 + 𝑡=1

𝑁 𝑂&𝑀𝑡(1 + 𝑑)𝑡

𝑡=1𝑁 𝐸𝑡(1 + 𝑑)𝑡

=𝐼𝐶 ∙ 𝐶𝑅𝐹 + 𝑂&𝑀𝑎𝑛𝑛𝑢𝑎𝑙

𝐸𝑎𝑛𝑛𝑢𝑎𝑙Where:

𝐼𝐶 : Investment Cost €

𝑂&𝑀 : Operation & Maintenance Cost €

𝐸 : Annual Electricity Production [MWh]

𝑑 : Discount Rate [%]

𝐶𝐹 : Capacity Factor [%]

𝐶RF : Capital Recovery Factor [%]

t : Year of Operation 𝑦𝑒𝑎𝑟

N : Project lifetime 𝑦𝑒𝑎𝑟

𝐶𝑅𝐹 =𝑑

(1 − ( 1 + 𝑑 −𝑁)

Funded by

Economic Indicators



• Payback Period



Funded by

Profitability Index

• It is extracted by dividing the future cash flows with the initial investment cost.

• Expresses the value created for each monetary unit expensed.

• Accepted investments are those with PI>1.

• Selection of the project with the highest PI among investment alternatives.

𝑃𝐼 =𝑁𝑃𝑉 + 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝐶𝑜𝑠𝑡

𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝐶𝑜𝑠𝑡

Funded by

Profitability Index

Advantages

+ Easy to understand

+ Closely related to NPV, leading generally to identical decisions

+ Used by companies when available funding is limited

Weaknesses

- Same as IRR, it may lead to wrong decisions when comparing two mutually exclusive projects.


Funded by

Numerical Case Study

• Assessment of the economic attractiveness of a typical onshore wind power plant in Greece;

• Calculation of the respective economic indicators;

• Sensitivity analysis of the main input parameters.

Funded by


Project Wind park

Area Greece

Total Power (MW) 20

Capacity Factor (%) 25,7%

Production (MWh) 45.000

Investment Cost (€/MW) 1.200.000 €

Operation & Maintenance Costs (€/kW/year) 47

Total Investment Cost (€) 24.000.000 €

Basic Information

2,250 full load hours

Funded by


Grants 0,00 € 0 %

Equity capital 12.000.000 € 50 %

Debt capital 12.000.000 € 50 %

Debt rate (%) 7 % Capital Structure

Debt term (years) 10

Electricity Price (€/MWh) 98 €

Discount Rate (%) 10 %

Project Lifetime (years) 20

Corporate tax rate (%) 29 %

Economic Input Data

Funded by


Indicators Values

Net Present Value (NPV)-62.413 €

1.973.870 €

Internal Rate of Return (IRR)-0,03 %1,09 %

Discounted Payback Period (DPP) >20 Years

Profitability Index (PI) 0,997

Levelized Cost of Electricity (LCOE) 83,5 €/MWh

Financial IndicatorsDebt/Equity

ratio:0/100

Debt/Equity ratio:50/50

Funded totally by Equity

capital

Taxes & Interests are not included!

Funded by


• Calculation of the discounted net cash flows (for investment funded totally by equity or by equity and debt) during the first 10 years of operation

Year 1 2 3 4 5 6 7 8 9 10

INCOME 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 €

EXPENSES 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 €

EBITD 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 €

DEPRECIATION 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 €

EBIT 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 €

INTERESTS -840.000 € -779.203 € -714.150 € -644.543 € -570.064 € -490.372 € -405.101 € -313.861 € -216.234 € -111.773 €

EBT 1.430.000 € 1.490.797 € 1.555.850 € 1.625.457 € 1.699.936 € 1.779.628 € 1.864.899 € 1.956.139 € 2.053.766 € 2.158.227 €

TAXES - Equity -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 €

TAXES - Equity & Debt -414.700 € -432.331 € -451.197 € -471.382 € -492.981 € -516.092 € -540.821 € -567.280 € -595.592 € -625.886 €

Present Value - Equity 2.556.091 € 2.323.719 € 2.112.472 € 1.920.429 € 1.745.844 € 1.587.131 € 1.442.847 € 1.311.679 € 1.192.435 € 1.084.032 €

Present Value - Equity & Debt 2.615.900 € 2.433.735 € 2.264.255 € 2.106.578 € 1.959.881 € 1.823.399 € 1.696.422 € 1.578.287 € 1.468.379 € 1.366.125 €

Funded by

Year 1 2 3 4 5 6 7 8 9 10

INCOME 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 €

EXPENSES 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 €

EBITD 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 €

DEPRECIATION 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 €

EBIT 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 €

INTERESTS -840.000 € -779.203 € -714.150 € -644.543 € -570.064 € -490.372 € -405.101 € -313.861 € -216.234 € -111.773 €

EBT 1.430.000 € 1.490.797 € 1.555.850 € 1.625.457 € 1.699.936 € 1.779.628 € 1.864.899 € 1.956.139 € 2.053.766 € 2.158.227 €

TAXES - Equity -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 €






𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑏𝑒𝑓𝑜𝑟𝑒 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡𝑠, 𝑇𝑎𝑥𝑒𝑠 𝑎𝑛𝑑 𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛(𝐸𝐵𝐼𝑇𝐷) = 𝐼𝑁𝐶𝑂𝑀𝐸 − 𝐸𝑋𝑃𝐸𝑁𝑆𝐸𝑆

Funded by

Year 1 2 3 4 5 6 7 8 9 10

INCOME 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 €

EXPENSES 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 €

EBITD 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 €

DEPRECIATION 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 €

EBIT 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 €

INTERESTS -840.000 € -779.203 € -714.150 € -644.543 € -570.064 € -490.372 € -405.101 € -313.861 € -216.234 € -111.773 €

EBT 1.430.000 € 1.490.797 € 1.555.850 € 1.625.457 € 1.699.936 € 1.779.628 € 1.864.899 € 1.956.139 € 2.053.766 € 2.158.227 €

TAXES - Equity -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 €






𝐸𝐵𝐼𝑇 = 𝐸𝐵𝐼𝑇𝐷 − 𝐷𝐸𝑃𝑅𝐸𝐶𝐼𝐴𝑇𝐼𝑂𝑁

Funded by

Year 1 2 3 4 5 6 7 8 9 10

INCOME 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 €

EXPENSES 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 €

EBITD 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 €

DEPRECIATION 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 €

EBIT 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 €

INTERESTS -840.000 € -779.203 € -714.150 € -644.543 € -570.064 € -490.372 € -405.101 € -313.861 € -216.234 € -111.773 €

EBT 1.430.000 € 1.490.797 € 1.555.850 € 1.625.457 € 1.699.936 € 1.779.628 € 1.864.899 € 1.956.139 € 2.053.766 € 2.158.227 €

TAXES - Equity -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 €






𝐸𝐵𝑇 = 𝐸𝐵𝐼𝑇 − 𝐼𝑁𝑇𝐸𝑅𝐸𝑆𝑇𝑆

Funded by



𝑃𝑟𝑒𝑠𝑒𝑛𝑡 𝑉𝑎𝑙𝑢𝑒𝐸𝑞𝑢𝑖𝑡𝑦 = 𝐸𝐵𝐼𝑇𝐷 − 𝑇𝐴𝑋𝐸𝑆𝐸𝑞𝑢𝑖𝑡𝑦

𝑇𝐴𝑋𝐸𝑆𝐸𝑞𝑢𝑖𝑡𝑦 = 𝐸𝐵𝐼𝑇 ∗ 𝑇𝑎𝑥 𝑅𝑎𝑡𝑒

Year 1 2 3 4 5 6 7 8 9 10

INCOME 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 €

EXPENSES 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 €

EBITD 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 €

DEPRECIATION 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 €

EBIT 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 €

INTERESTS -840.000 € -779.203 € -714.150 € -644.543 € -570.064 € -490.372 € -405.101 € -313.861 € -216.234 € -111.773 €

EBT 1.430.000 € 1.490.797 € 1.555.850 € 1.625.457 € 1.699.936 € 1.779.628 € 1.864.899 € 1.956.139 € 2.053.766 € 2.158.227 €

TAXES - Equity -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 €




Funded by



Year 1 2 3 4 5 6 7 8 9 10

INCOME 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 €

EXPENSES 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 €

EBITD 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 €

DEPRECIATION 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 €

EBIT 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 €

INTERESTS -840.000 € -779.203 € -714.150 € -644.543 € -570.064 € -490.372 € -405.101 € -313.861 € -216.234 € -111.773 €

EBT 1.430.000 € 1.490.797 € 1.555.850 € 1.625.457 € 1.699.936 € 1.779.628 € 1.864.899 € 1.956.139 € 2.053.766 € 2.158.227 €

TAXES - Equity -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 €




𝑃𝑟𝑒𝑠𝑒𝑛𝑡 𝑉𝑎𝑙𝑢𝑒𝐸𝑞𝑢𝑖𝑡𝑦&𝐷𝑒𝑏𝑡 = 𝐸𝐵𝐼𝑇𝐷 − 𝑇𝐴𝑋𝐸𝑆𝐸𝑞𝑢𝑖𝑡𝑦&𝐷𝑒𝑏𝑡 − 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡𝑠 ∗ 𝑇𝑎𝑥 𝑅𝑎𝑡𝑒

𝑇𝐴𝑋𝐸𝑆𝐸𝑞𝑢𝑖𝑡𝑦&𝐷𝑒𝑏𝑡 = 𝐸𝐵𝑇 ∗ 𝑇𝑎𝑥 𝑅𝑎𝑡𝑒

Funded by

Year 11 12 13 14 15 16 17 18 19 20

INCOME 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 €

EXPENSES 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 €

EBITD 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 €

DEPRECIATION 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 €

EBIT 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 €

INTERESTS 0 € 0 € 0 € 0 € 0 € 0 € 0 € 0 € 0 € 0 €

EBT 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 €

TAXES - Equity -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 €


Present Value - Equity 985.484 € 895.894 € 814.449 € 740.408 € 673.099 € 611.908 € 556.280 € 505.709 € 459.735 € 417.941 €

Present Value - Equity & Debt 985.484 € 895.894 € 814.449 € 740.408 € 673.099 € 611.908 € 556.280 € 505.709 € 459.735 € 417.941 €


• Calculation of the discounted net cash flows (for investment funded totally by equity or by equity and debt) during the last 10 years of operation

Funded by


Equity Capital InvestmentPresent Value Payback

-24.000.000 € -24.000.000 €

2.556.091 € -21.443.909 €

2.323.719 € -19.120.190 €

2.112.472 € -17.007.718 €

1.920.429 € -15.087.289 €

1.745.844 € -13.341.445 €

1.587.131 € -11.754.313 €

1.442.847 € -10.311.467 €

1.311.679 € -8.999.788 €

1.192.435 € -7.807.353 €

1.084.032 € -6.723.321 €

985.484 € -5.737.837 €

895.894 € -4.841.943 €

814.449 € -4.027.493 €

740.408 € -3.287.085 €

673.099 € -2.613.986 €

611.908 € -2.002.078 €

556.280 € -1.445.799 €

505.709 € -940.090 €

459.735 € -480.354 €

417.941 € -62.413 €IRR DPP

-0,03% > 20 years

Equity & Debt Capital Investment YEAR

0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

Present Value Payback-24.000.000 € -24.000.000 €

2.615.900 € -21.384.100 €

2.433.735 € -18.950.365 €

2.264.255 € -16.686.110 €

2.106.578 € -14.579.532 €

1.959.881 € -12.619.651 €

1.823.399 € -10.796.252 €

1.696.422 € -9.099.829 €

1.578.287 € -7.521.542 €

1.468.379 € -6.053.163 €

1.366.125 € -4.687.038 €

985.484 € -3.701.554 €

895.894 € -2.805.660 €

814.449 € -1.991.211 €

740.408 € -1.250.802 €

673.099 € -577.704 €

611.908 € 34.204 €

556.280 € 590.484 €

505.709 € 1.096.193 €

459.735 € 1.555.929 €

417.941 € 1.973.870 €IRR DPP

1,09% 15,94

YEAR0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

Funded by

Sensitivity Analysis

Electricity price

-20,0%

-15,0%

-10,0%

-5,0%

0,0%

5,0%

10,0%

(€30.000.000)

(€25.000.000)

(€20.000.000)

(€15.000.000)

(€10.000.000)

(€5.000.000)

€0

€5.000.000

€10.000.000

€15.000.000

€0,00 €20,00 €40,00 €60,00 €80,00 €100,00 €120,00 €140,00

IRR

NP

V

Electricity Price

NPV - Equity & Debt

IRR - Equity & Debt

Funded by


Capacity Factor

-8,0%

-6,0%

-4,0%

-2,0%

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

(€15.000.000)

(€10.000.000)

(€5.000.000)

€0

€5.000.000

€10.000.000

€15.000.000

€20.000.000

0,00% 5,00% 10,00% 15,00% 20,00% 25,00% 30,00% 35,00% 40,00% 45,00%

IRR

NP

V

Capacity Factor

NPV - Equity & Debt

IRR - Equity & Debt

Funded by


Discount rate

-2,0%

-1,0%

0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

6,0%

(€4.000.000)

(€2.000.000)

€0

€2.000.000

€4.000.000

€6.000.000

€8.000.000

€10.000.000

€12.000.000

0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 12,00% 14,00% 16,00%

IRR

NP

V

Discount Rate

NPV - Equity & Debt

IRR - Equity & Debt

Funded by


Debt Capital

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

€0

€500.000

€1.000.000

€1.500.000

€2.000.000

€2.500.000

€3.000.000

€3.500.000

€4.000.000

€4.500.000

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

IRR

NP

V

Debt Capital

NPV - Equity & Debt

IRR - Equity & Debt

Funded by


Debt Term

0,0%

0,2%

0,4%

0,6%

0,8%

1,0%

1,2%

1,4%

1,6%

1,8%

€0

€500.000

€1.000.000

€1.500.000

€2.000.000

€2.500.000

€3.000.000

€3.500.000

0 2 4 6 8 10 12 14 16

IRR

NP

V

Debt Term

NPV - Equity & Debt

IRR - Equity & Debt

Funded by

Conclusions

• Economic analysis is a critical process to examine if an investment/project is worthwhile;

• Different economic indicator may be used to examine financial feasibility of wind energy projects;

• There is no uniform criterion for investment decision making - a combination of indices is most preferable;

• Several scenarios of input parameters are vital in order to examine project attractiveness under different conditions.

Funded by

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EU GCC CLEAN ENERGY NETWORK II · Net Present Value (NPV)-62.413 € 1.973.870 € Internal Rate of...

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