Techno-Economical Analysis of Energy Generation Power Plants€¦ · Thermal ? – A) Queiroz ... photovoltaic power plant or in a wind farm (both greenfield) Staaken a 20km de Berlin

LBE5010 Renewable Energies and Energy Planning

Prof. Paulo Seleghim Jr.Universidade de São Paulo

Techno-Economical Analysis of Energy Generation Power Plants

FOSSIL ENERGY SOURCES

RENEWABLE ENERGY SOURCES

displacementtechno-economical

competition

Techno-Economical Analysis of an Investment Project

Capital Budgeting

Development of an engineering project

Project: Conceptual

AnalysisExecutive

Execution: Implementation

CommissioningOperation

Economic sustainability:

success as a product and as an investment project

Economic Engineering: application of techno-

economical analysis tools to to the engineering projectaiming at identifying the best choice between

excluding alternatives…

Case Study:

Case study: decision about investing R$ 1 billion in a

photovoltaic power plant or in a wind farm (both greenfield)


Solar

Thermal ?

– A) Queiroz Galvão

• Complexo Caldeirão Grande

• 415.8 MW - 2016/2017 (ACL)

– B) Chesf/ContourGlobal/Casa dos Ventos

• Complexo Picos

• 205.1 MW Set/2015

– C) Casa dos Ventos

• Complexo Ventos do Araripe

• 210 MW set/2015

– D) Chesf/ContourGlobal/Casa dos Ventos

• Complexo Ventos do Araripe I I

• 172,4 MW Jan/2016

– D') Casa dos Ventos

• Complexo Ventos do Araripe I I

• 59,2 MW Jan/2016

– E) Casa dos Ventos

• Complexo Ventos do Araripe I I I

• 234.6 MW Mai/2018

Chapada do Araripe




Staaken a 20km de Berlin








70%

4MW

30%

Werneuchen, 18.87 MWp

19MWp





Capital to be invested

(CAPEX) from which it is expected some revenue

(investment fund, etc.)

R$ 1 billion

Alternative: acquisition of

government bonds (public debt, etc.) at fixed interest rates,

having the same redemption term and virtually no risk

R$ 1 billion




Financial temporal simulation of the power plant, including expenditures occurring at the design and execution phases, as well as revenues and costs during the operation phase during the entire lifespam

R$ 1 bilhão

Cash flowR$ 1 bilhão(capital budgeting)




I temized Investment Cost of and Ethiopian Wind project


CAPEX

time

project commissioning

cash flow($/t)

Cashflow analysis: expenses and incomes

revenues

CAPEX

time


cash flow($/t)


fixed costs

revenues

CAPEX

time


cash flow($/t)


OPEX

fixed costs

revenues

CAPEX

time


cash flow($/t)


time

accumulatedcash flow

Accumulated cashflow:

project success

end of lifespanbusiness success

death valley

beginning ofsenescence

increase in operation costs due to equipment

depreciation

Accumulated cashflow:

time


cost

benefit

maximuminvestment

payback

break-even

Accumulated cashflow: characterization parameters

time


Parâmetros do fluxo acumulado – saldo do projeto

150bar boiler

67bar boiler

50MWsurplus

60MWsurplus

CAPEX Revenues

time


Which one is better?

Wind

Photo

R$ 1 billion

time


Objective decision criteria…

time


payback

Payback:• Liquidity, less exposure to risks• disregards revenues after payback• disregards temporal value of money

cost

benefit

maximuminvestment

payback

benefit / cost:expresses how much benefit can be obtained form each unit of value invested…• disregards temporal value of money

Objective decision criteria…

time


Payback:• Liquidity, less exposure to risks• disregards revenues after payback• disregards temporal value of money

Temporal Value of Money

Internal Rate of Return

R$100,00

R$65,00R$50,00

R$0,00

R$100,00

R$20,00R$30,00

R$0,00

R$70,00

Project A

R$100,00

R$115,00

R$100,00

R$120,00

ano1 ano2 ano3

ano1 ano2 ano3 ano4

3 years

4 years

Project B

R$0,00

ano4

Return of R$ 15 in 3 years or return of

R$ 20 in 4 years ???????

Which one is better?

Temporal value of money

R$100,00

Reference:

5% per annum

at virtually no

risk (example)


R$100,00

Reference:

5% per annum

at virtually no

risk (example)

R$105,001,05

future value

(year 1)


R$100,00

Reference:

5% per annum

at virtually no

risk (example)

R$105,00 R$110,251,05 1,05

future value

(1 year)

future value

(year 2)


R$100,00

Reference:

5% per annum

at virtually no

risk (example)

R$105,00 R$110,25 R$115,761,05 1,05 1,05

future value

(1 year)

future value

(year 2)

future value

(year 3)


R$100,00

Reference:

5% per annum

at virtually no

risk (example)

R$105,00 R$110,25 R$115,761,05 1,05 1,05

n)r(PVFV += 1

future value

(1 year)

future value

(year 2)

future value

(year 3)

R$86,38 R$90,70 R$95,24 R$100,001,051,051,05


Reference:

5% per annum

at virtually no

risk (example)

n)r(FVPV −+= 1

present value

(1 year)

present value

(year 2)

present value

(year 3)

Temporal value of money: expenses and incomes

=k

kPVNPV

cashflow

R0 R1

R2R3

R5

R4

R6R7

R8 R9 R10

D0

D1

D2 D3

D5D4D6

D7

D8D9 D10

= +

−=

N

kk

kk

)r(

DRNPV

0 1

• Rk are incomes @ k-th period• Dk are expenses @ k-th period

• r is the discount rate reflecting

the opportunity cost

Spreadsheet formulae...

Spreadsheet formulae...

NPV: limitations

Net Present Value: limitations

Project A

Initialinvestment

R$ 10 milions

NPV = R$ 2 millions

Project B

InitialinvestmentR$ 2 billions

NPV = R$ 3 millions

Execute B because VPLB > VPLA, however ...

R$100,00

R$65,00R$50,00

R$0,00

R$100,00

R$20,00R$30,00

R$0,00

R$70,00

Project A

ano1 ano2 ano3

ano1 ano2 ano3 ano4

Project B

R$0,00

ano4= +

−=

N

kk

kkA

)r(

DR)r(NPV

0 1

= +

−=

N

kk

kkB

)r(

DR)r(NPV

0 1

Variation of the NPV in function of the discount rate…

5,9%

5,2%

FC_A

100,00-R$

-R$

65,00R$

50,00R$

-R$

FC_B

100,00-R$

-R$

20,00R$

30,00R$

70,00R$

= +

−=

N

kk

kkA

)r(

DR)r(NPV

0 1

= +

−=

N

kk

kkB

)r(

DR)r(NPV

0 1


NPV

B

A

execute A(greater NPV)

referential discount rate (opportunity cost)

r


NPV

B

A

execute B(greater NPV)

execute A(greater NPV)

referential discount rate (opportunity cost)

r


How to evaluate the

opportunity cost by

setting the discount rate ?


26/07/2017:

9,25 % a.a.

NPV

B

A

r


Viability limit: the discount rate above which the

project is no longer

economically viable

B

A

0= )r(NPVr 0)TIR1(

DRN

0kk

kk =+

−

=

r

NPV


IRR – Internal Rate of Return

IRRA > IRRB → A is more resiliente than B

B

A

IRR – Internal Rate of Return

r

NPV


Techno-Economical Analysis of an Investment Project

Capital Budgeting

Capital

Techno-Economical Analysis of an Investment Project (Capital Budgeting):

Engineering Project

Capital


Engineering Project

CAPEX/OPEX

Capital


Engineering Project

CAPEX/OPEX

Capital

Cash Flow


Engineering Project

CAPEX/OPEX

Capital

Cash Flow

Decision Parameters


Engineering Project

CAPEX/OPEX

Capital

Cash Flow

Decision Parameters

Execution


Engineering Project

CAPEX/OPEX

Capital

Cash Flow

Decision Parameters

Execution


Engineering Project

Decision Parameters

CAPEX / OPEX

Obs.: solar thermal

Wind power plants: CAPEX/OPEX

Current LCOE

Blade

Controls/Sensors

Drivetrain

Generator

Electrical

Tower

Pitch System

Foundation

Nacelle

Pitch Control

Condition Monitoring

SCADA

Yaw System

Castings/Forgings

Systems

Yaw Control

2025 LCOE2

5%

redu

ction

in C

AP

EX3,75 ¢/kWh

4,50 ¢/kWh

2%

3%

2%

2%

1%

2%

1%

1%

1%

2%

2%

2%

1%

1%

1%

1%

y = 1,4752x

0

200

400

600

800

1000

1200

1400

0 100 200 300 400 500 600 700 800 900

Cu

sto

(M

US$

)

potência instalada (MW)


características típicas usina solar fotovoltaica unidade

insumo energético primário vento -

capacidade instalada típica 28,00 MWp

FECC Nordeste 35,00 %

Tempo médio de implantação 18 meses

utilização de mão de obra baixa -

Qualificação da mão de obra alta -

característica de operação intermitente -

custo dos insumos baixo -

custo operacional médio -

emissão GEE baixa -

grau de maturidade tecnológica TRL9 -

parâmetros valor unidade

custo capital 3,23 kR$/kW

custo operacional 7,91 R$/kW/mês

venda eletricidade (13/12/2013) 120,37 R$/MWh



insumo energético primário vento -


FECC Nordeste 35,00 %










custo capital 3,23 kR$/kW

custo operacional 7,91 R$/kW/mês

venda eletricidade (13/12/2013) 120,37 R$/MWh

depreciation


R$ 1 billion → 310 MWp

35%

310 GWp → 108 MW

108 MW → 0,85 MR$/month

108 MW → 9,33 MR$/month


month/$MR,month

h

MWh

$RMW 339

3024120108 =

cash flow($/month)

CAPEX

1º

mo

du

le

2º

mo

du

le

3º

mo

du

lemonth 18

m 12m 6

0,85 MR$/month

9,33 MR$/month

1 GR$/18 months

OPEX

revenues

35 years

Wind power plants: cash flow

0,85*f( T ) MR$/mês

depreciation

cash flow($/month)

CAPEX

1º

mo

du

le

2º

mo

du

le

3º

mo

du

lemonth 18

m 12m 6

9,33 MR$/month

1 GR$/18 months

OPEX

revenues

35 years

Wind power plants: cash flow

+=N

nd185,0Dn

Photovoltaic power plants: CAPEX/OPEX



y = 11,034x

0

200

400

600

800

1.000

1.200

1.400

1.600

1.800

2.000

0 20 40 60 80 100 120

Cu

sto

(M

US$

)

potência instalada (MW)



insumo energético primário luz solar -


FECC Nordeste (5) 30,00 %










custo capital (30MW) (1) (2) (3) 13,31 kR$/kW



custo operacional (1) 6,93 R$/kW/mês

venda eletricidade (4) 215,12 R$/MWh



insumo energético primário luz solar -


FECC Nordeste (5) 30,00 %













custo operacional (1) 6,93 R$/kW/mês

venda eletricidade (4) 215,12 R$/MWh

depreciation


89 GWp → 27 MW

R$ 1 billion → 89 MWp

30%

27 MW → 0,185 MR$/month

27 MW → 4,18 MR$/month

month/$MR,month

h

MWh

$R,MW 184

30241221527 =


cash flow($/month)

CAPEX

1º

mo

du

le

2º

mo

du

le

3º

mo

du

le

m 12m 6

0,185 MR$/m

4,18 MR$/month

1 GR$/36 months

OPEX

revenues

35 years

m 18 m 24

month 36

m 30

4º

mo

du

le

5º

mo

du

le

6º

mo

du

le

Photovoltaic power plants: cash flow

0,185*f( T) MR$/monthOPEX

cash flow($/month)

CAPEX

1º

mo

du

le

2º

mo

du

le

3º

mo

du

le

m 12m 6

4,18 MR$/month

1 GR$/36 months

revenues

35 years

m 18 m 24

month 36

m 30

4º

mo

du

le

5º

mo

du

le

6º

mo

du

le

Photovoltaic power plants: cash flow

depreciation

+=N

nd185,0Dn

Analysis of the Investment Projects (Capital Budgeting)

depreciação 2

taxa de desconto 0,54% ao mês

VPL -401,50MR$

TIR 0,23% ao mês

TIR 2,77% ao ano

Benefício/Custo 0,6632R$/R$

-1.500,00

-1.000,00

-500,00

0,00

500,00

1.000,00

0 100 200 300 400 500

Acumulado (MR$)

depreciação 5


VPL 42,20MR$

TIR 0,65% ao mês

TIR 7,81% ao ano


-1.500,00

-1.000,00

-500,00

0,00

500,00

1.000,00

1.500,00

2.000,00

0 100 200 300 400 500

Acumulado (MR$)

DECISION: WIND. However...

Analysis of the Investment Projects (Capital Budgeting)

depreciação 2


VPL -401,50MR$

TIR 0,23% ao mês

TIR 2,77% ao ano


-1.500,00

-1.000,00

-500,00

0,00

500,00

1.000,00

0 100 200 300 400 500

Acumulado (MR$)

depreciação 5


VPL 42,20MR$

TIR 0,65% ao mês

TIR 7,81% ao ano


-1.500,00

-1.000,00

-500,00

0,00

500,00

1.000,00

1.500,00

2.000,00

0 100 200 300 400 500

Acumulado (MR$)

Photovoltaics at the 10/2014 bid:

202 MWp @ R$ 215,12 / MWh

diversification of energy sources

Tax incentives,

exemption from taxes for equipment,

differentiated tariffs, etc.

R$ 100 / MWh

Installed capacity in MW

Streaming = www.youtube.com/c/pseleghim/live

Next class: conversion of thermal energy

Documents

Techno-Economical Analysis of Energy Generation Power Plants€¦ · Thermal ? – A) Queiroz ... photovoltaic power plant or in a wind farm (both greenfield) Staaken a 20km de Berlin