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Financial Modelling for Renewable Energy Projects

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Financial Modelling for Renewable Energy Projects will give you the skills to efficiently develop, modify and analyse financial models in the renewable energy sector. The course covers essential topics including funding mechanics, operational analysis and investment metrics and gives you a robust platform for analysis in the most sophisticated environments.

You will learn the financial modelling techniques needed to build a best practice financial model suitable for debt structuring, investment analysis and operational scenario evaluation.


Perform project finance banking analysis, investment reviews or sponsor research

This hands-on course will clarify how project finance bankers, investors and external parties will analyse your project, and provide a deep understanding of the flexibility required in scenario analysis by a range of audiences.


Financial Modelling for Renewable Energy Projects will enable you to

  • Master best practice techniques for financial modelling of renewable energy projects to achieve flexibility and robustness
  • Build a flexible and powerful scenario manager to analyse your project’s sensitivity to key drivers
  • Prepare trusted analysis of commercial outputs tailored to investors and financiers, with a focus on valuation and risk
  • Understand a flexible framework for tax modelling, adaptable to regional jurisdictions
  • Develop flexible funding structures for analysis of project finance debt and other funding sources  
  • Learn how to analyse GP/LP flip structures and tax equity for project financing 


Do you build or analyse project finance models in the renewable energy sector?

If you need to build, review or analyse project finance models in the renewable energy sector, then this course is for you. Typical attendees include analysts, financial managers from project companies, advisors and financiers.


Required knowledge: Excel, Finance and the Renewables sector

It is expected that you have some previous experience with financial models in Excel, and foundation knowledge of investment concepts such as NPV and cash flows analysis.


Extend your understanding of project finance theory

To learn more about project finance theory, we recommend Corality’s ‘Project finance: Concepts & Applications’ course. This one day project finance training course covers topics from ‘What is project finance’ to examples of typical transaction structures, risk mitigation approaches and market examples.


Would a project finance modelling course be more interesting for you?

Corality’s project finance modelling courses are run publically in a number of cities around the world. Some of the more popular locations and courses include Best Practice Project Finance Modelling in Sydney, Advanced Project Finance Modelling in New York, and financial modelling courses in London. For an extensive list, see Corality’s training courses and schedules


What is financial modelling and how can you learn more?

For a deeper understanding of Corality’s approach to financial modelling and SMART (our globally acclaimed financial modelling methodology), we recommend reviewing and downloading some of our financial modelling tutorials from the SMART Campus. Many of the free examples are inspired by content from our training courses in financial modelling and project finance, and from Valuation modelling and theory. 

Visit SMART Campus – financial modelling examples

To learn more about Corality's experience in Wind Energy you may find this article about Hornsdale wind farm financial close interesting.

Course outline

Renewable energy projects often require significant financial analysis, and this hands-on financial modelling training course give you the skills and confidence required to develop a comprehensive financial model for planning, investments and financing analysis.
 

Develop a strong understanding of financial model architecture and process in the renewable energy sector, to ensure the big picture is always in mind:

  • Understand how to envision a financial modelling process from beginning to end

  • Recognise the process similarities in modelling for wind, solar or hydro projects and learn which modules can be standardised across energy sources

  • Gain insights into a typical financial model development process – step-by-step – for a renewable energy model

  • Benefit from a flexible timing framework to underpin the model architecture – an essential feature for projects where the dates / timing may change over time (which includes 99% of all projects)

  • Capture the financial implications of delays (construction / operations) in the project time table with a structured financial modelling approach

Project documentation: Learn the significance of various document and their impact on the financial modelling process:

  • Discuss major project documents used in renewable transactions and their impact on the financial model

  • Understand how to manage ever-changing documentation and assumptions

Representing the construction phase of a renewable energy project in the Excel model:

  • Discuss funding alternatives for renewable energy projects (bank debt, capital markets, government supported structures, export agencies) and how this impacts the financial modelling process

  • Incorporate flexible functionality for construction delays  and/or cost over-runs

  • Integrate typical renewable energy construction contracts and contingencies

Modelling of pricing and purchase agreements in renewable energy:

  • Learn about off-take, prepaid and power purchase agreements (PPA)

  • Integrate both PPA and spot pricing into the operational calculations

  • Expand PPA analysis by having variable pricing structures, milestones, and penalties

Forecasting and modelling of production metrics:

  • Understand application of different forecasting methods, the appropriate allocation of each

  • Learn to integrate multiple probability exceedance profiles concurrently (e.g., P50, P90

  • Convert gross production to net production by accounting for: Operational ramp up schedules, impact of production unit (e.g. turbines) availability and efficiency, and gains and losses of production such as seasonality of renewable energy.

Financial modelling techniques for operational costs and project maintenance:

  • Integrate fixed and variable costs typical of renewable energy projects

  • Learn how to model flexible volume driver controls for variable costs

  • Understand the important role of real vs. nominal costs (escalation) and how to integrate powerful indices

  • Review of leasing structures and application of in renewable energy projects

  • Discuss different reserve account structures (i.e. maintenance)

Project finance modelling: Integrate project finance debt:

  • Develop comprehensive debt modelling mechanics, with a  specific application of DSCR sculpted repayment using first principle calculation for full transparency

  • Incorporate the functionality of target Debt Service Coverage Ratio repayments
  • Review other repayment options including bullets and linear commonly used in project finance
  • Discuss debt sizing methodologies

Flip structures and tax equity:

  • Understand the rationale and calculate GP/LP structure flips
  • Review tax equity concepts and develop flexible calculations appropriate for use in a typical project financing model

Review depreciation and tax calculations:

  • Flexible depreciation calculations for an efficient financial model structure

  • Understand how to develop flexible input structures for analysis of multiple depreciation methods

  • Correct taxable income for tax calculations
     
  • Tax creditor accounts for correct assignation of tax payable and paid
  • Understand the working of tax loss accounts

Financial return analysis: Project Return – essential financial model output:

  • Inclusion of best practice net present value (NPV) and internal rate of return (IRR) calculations for the renewable energy project

  • Discussion about key differences between XPNV vs. NPV functions

  • Limitations and dangers in the application of the IRR function

Master Scenario Management with an efficient financial model structure:

  • Work faster, better and with more insights using Corality’s Scenario Management solutions

  • Use  commercial scenario analysis to assess the working of the financial model, and to sense check your logic and calculations

  • Build confidence in your analysis through pre-programmed combinations of model inputs

schedule

JUL
25-27
9 AM - 5 PMNew York
register
OCT
4-6
9 AM - 5 PMNew York
register
NOV
8-10
9 AM - 5 PMSan Francisco
register

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