This first session overviews the fundamental financial variables within a renewable power project and shows how they map to a cashflow analysis (including one which is provided, in Excel format). How should you ‘read’ a financial analysis, from revenue to returns? What are the main differences to be considered for different power project types? Which factors influence the balance towards project viability? How much detail is required?
- Fundamentals of the business case: the key cost and revenue variables
- Introducing and understanding the cashflow sheet
- The ‘cashflow waterfall’
- Defining some commonly used terminology (IRR, NPV, EBITDA, DSCR etc.)
- Strengths and limitations of a simple model
- Key timeframes, including revenue certainty, debt tenor and project lifetime
- Contrasting cost structures between different renewable power project types
- The project lifecycle and financial risk
- Policy mechanisms and their financial influence