This intensive, hands-on course will provide a comprehensive analysis of issues associated with independent electric power projects ranging from economic analysis of PPA contracts to financial modelling of projects.
In working through analysis of projects, a mixture of case studies, lectures and analytical exercise will be used to evaluate electricity price forecasts, debt structuring, technology choice, cost of capital, and architecture of financial models.
The course will feature:
Understand the objectives, theory, public policy and nuances of risk allocation between investor and off-taker for availability, heat rate, commissioning delay, operating costs, fuel prices, construction expenditures and capacity factor.
Learn the importance of debt structuring in measuring project risk and measuring project value and the effect of different financing structures on PPA bidding strategies through computing required PPA prices in financial models to meet IRR and DSCR targets.
Create flexible and transparent financial models of independent power projects from A-Z that incorporate availability risk; heat rate risk, operating cost risks, financing structure, tax treatments, alternative pricing policies and other factors.
Prepare economic analysis that evaluates tradeoffs between penalty provisions and PPA costs such as increasing availability penalty relative to required operation and maintenance costs as well as evaluation of PPA tariffs relative to the long-run marginal cost of electricity.
Measure and evaluate changes in the risk of projects over different stages of the project and how equity returns and asset value change if purchases and sales occur at different phases of a project's life.
Learn practical tools to analyse details of power projects including efficient tools to work with supply and demand data; creating flexible scenario and sensitivity analysis to evaluate efficiency and availability risk, construction risk, O&M risk and debt structuring; developing techniques to resolve circular references related to funding debt and sculpting debt without copy and paste macros.
Work through implementation of risk allocation in PPA tariff design and evaluation of off-taker risk and off-taker financial analysis.
The course is delivered using a mixture of hands-on analytical exercises, case studies and lectures in order that participants can learn from each other as well as from the course leader. In addition to development of skills in the course, participants will receive a series DVD containing a range of relevant models, business cases, articles and documents for further reference.
As a participant in the course, you will create a variety of exercise including a project finance model from A to Z that includes working through economic assumptions, developing alternative construction scenarios, evaluating tariff components, constructing a cash flow waterfall and resolving painful circular references. The case studies are also used to demonstrate how break-even analysis, scenario analysis, tornado diagrams, time series equations and Monte Carlo simulation can be used to analyse risk with project finance models of independent power projects.
In creating analyses, some participants will be particularly interested in adding excel features such as VBA with macros, flexible graphs, alternative circularity resolution, vintage depreciation and indirect functions to their project finance models. To accommodate people who are interested in technical programming subjects, added sessions will be held after at the end of the first and second days of the course.
"The instructor was extremely knowledgeable and went out of his way to answer questions with examples" - delegate from Saudi Aramco