...
The Project, Equity and Payout IRRs are calculated using following function, with the only difference being that the Reference is adjusted for the different IRR levels. Also, it is important to note that the calculations are based on monthly cashflows as opposed to quarterly or yearly.
The Equity and Payout cashflows used as reference can be easily derived from the Fimo. They each have a different line indicating the respective cashflows. The project IRR is based on adjusted free cashflows, which is calculated by subtracting the tax shield from the free cashflow. which is also an individual line in the Fimo. The Tax Shield itself is calculated as follows:
- The tax payments are calculated on EBIT. This by multiplying the tax rate times EBIT and adding the reduction in taxes paid due to Deferred Tax Assets
- The tax payments are calculated on EBT by multiplying the tax rates by EBT and adding the reduction in taxes paid due to Deferred Tax Assets
- The taxes paid on EBT (see 2) are subtracted from the taxes paid on EBIT (see 1). The resulting value is the tax shield for the respective month.
...
.gif?version=1&modificationDate=1567073500652&cacheVersion=1&api=v2&height=53)
...
DSCR = internal financed components of the operative Cashflow(t) / Debt Service referred to the Look Back Period
...
Full-load Hours = Production Amount per year / Power
...
Capacity Factor = Full-load Hours / ha
with ha = hours per year (8760 h)
...
| Mathblock | ||
|---|---|---|
| ||
\mathrm{LCOE} = \frac{\sum^T_{t=0} \frac{ \mathrm{Sales}_t - \mathrm{Cashflow to Equity}_t}{ (1 + \mathrm{Hurdle Rate})^t}}{ \sum^T_{t=0} \frac{\mathrm{Production}_t}{(1 + \mathrm{Hurdle Rate})^t}} |
t=0: Valuation Date
...
The LCOE graph shows the breakdown of the LCOE by category, where category includes Opex, Taxes, Capex, Debt and Reserve Account. In the below example, the cost of electricity by kWh is 8.52 Cent. This means that if the renumeration per kWh is above 8.52 Cents, the project is profitablt. If the renumeration is below, the project generates losses. The Equity IRR used for the calculation can be switched between the Effective Equity IRR and the Hurdle Rate, this by clicking on the dropdown bar and selecting the desired Equity IRR.
