NREL Wind Energy Finance WEF Analysis Tool

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NREL Wind Energy Finance (WEF) Analysis Tool

• Tony Jimenez
• 10 April 2006
• National Renewable Energy Lab

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Presentation Overview

• WEF Overview
• Step through the screens
• Outputs
• WEF Limitations

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What Does WEF Do?

• Allows for the financial analysis of a proposed
  wind project at a moderate level of detail 1 -
  2 steps beyond the back of the envelope level
  of analysis.
• web site http//analysis.nrel.gov/windfinance/l
  ogin.asp

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Who Should Use WEF?

• Anyone interested in evaluating the economics of
  a utility scale wind project. WEF is designed
  for those with some knowledge of project finance
  but with little knowledge of wind energy

• Rural co-op municipal utility officials
• Rural landowners interested in owning a utility
  scale wind project
• Local economic development officials

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WEF Features

• Extensive help
• Module to calculate project capacity factor
• Calculates Internal Rate of Return (IRR), Debt
  Service Coverage Ratios (DSCR). Alternately,
  user can specify minimum IRRs and/or DSCR and
  program will calculate minimum PPA price.
• WEF can handle PTC and REPI. Depreciation
  schedules are hard-wired in.
• Debt repayment options (level mortgage, level
  principle, custom)
• Exportable summary results and detailed cash
  flows
• Users can save multiple projects

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WEF Inputs

• General assumptions
• Capital costs
• Operating expenses
• Financing assumptions
• Tax assumptions
• Economic assumptions
• Financial constraints

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WEF Outputs

• Minimum PPA price needed to meet financial
  constraints
• Levelized cost of energy
• Payback period
• Net present value
• Internal rate of return
• Summary and detailed cash flows

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Welcome Screen
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Project Selections
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General Assumptions
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Capital Costs
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Operating Costs
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Financing Assumptions
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Tax Assumptions
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Economic Assumptions
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Financial Constraints
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Summary Output (1 of 2)
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Summary Output (2 of 2)
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Cashflow Rollup
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Detailed Cashflow (1 of 2)
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Detailed Cashflow (2 of 2)
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WEF Limitations
WEF shouldnt be the final word in your project!

• Basic point of view is developer / owner
• Cant model complex ownership structures (e.g.
  flips)
• Cant model discontinuous changes in PPA price

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Questions? tony_jimenez_at_nrel.gov