Financial Modelling of Technical Risks in PV Projects Matthias v. - PowerPoint PPT Presentation

Solar Bankability Webinar November 22, 2016 Financial Modelling of Technical Risks in PV Projects Matthias v. Armansperg, ACCELIOS Solar Funded by the Horizon 2020 Framework Programme of the European Union

Risk Modelling Software Modelling software Yield Financing Aux-Excel Aux-Excel Cashflow Excel Dashboard Excel Risk modelling Visual Basic • Solar Bankability Webinar 11/22/2016 2 2

Risk Modelling Software Input parameters Modelling software BM4 Yield Financing BM3 Aux-Excel Aux-Excel BM2 BM1 Business Model techn./finance Cashflow Excel BM4 BM3 BM2 BM1 Techn. risk database Dashboard Excel BM4 BM3 BM2 BM1 Risk modelling Repair & maint. Visual Basic cost factors • Solar Bankability Webinar 11/22/2016 3 3

Risk Modelling Software Input parameters Modelling software Output parameters BM4 Yield Financing BM3 Aux-Excel Aux-Excel BM2 BM1 Business Model BM4 techn./finance BM3 BM2 Cashflow BM1 Excel BM4 Single risk BM3 impact BM2 BM1 Techn. risk BM4 database Dashboard BM3 Excel BM2 BM1 BM4 Risc scenario BM3 impact BM2 BM1 Risk modelling Repair & maint. Visual Basic cost factors • Solar Bankability Webinar 11/22/2016 4 4

Business Model Selection • Solar Bankability Webinar 11/22/2016 5

Financial Performance of Business Models IRR (Base case) • Solar Bankability Webinar 11/22/2016 6

Financial Performance of Business Models IRR (Base case) Cumulative cash flow (Base case) • Solar Bankability Webinar 11/22/2016 7

Selection of Technical Risks • Solar Bankability Webinar 11/22/2016 8

Selection of Technical Risks • Solar Bankability Webinar 11/22/2016 9

Failure Cost Calculation Fixing costs due to repair/substitution (Euros) - Cost of detection (visual inspection, monitoring system, IR for hotspots, EL for crack cells, etc) - Cost of transportation - Cost of labour - Cost of repair/substitution of compontents • Solar Bankability Webinar 11/22/2016 10

Failure Cost Calculation Fixing costs due to repair/substitution (Euros) - Cost of detection (visual inspection, monitoring system, IR for hotspots, EL for crack cells, etc) - Cost of transportation - Cost of labour - Cost of repair/substitution of compontents Downtime costs due to downtime and/or power loss (kWh to Euros) - Failures might cause partial or complete power loss - Downtime duration from occurence of failure till completion of repair/substitution - Failures at component level might affect other components (e.g. module failure might bring down the whole string) • Solar Bankability Webinar 11/22/2016 11

Failure Categories The impact of risks is measured by failure categories based on a 12 month revenue reserve account • Solar Bankability Webinar 11/22/2016 12

Failure Category Overview Business Model 1 Business Model 2 Business Model 3 Business Model 4 • Solar Bankability Webinar 11/22/2016 13

Failure Impact – Business Model 3 (Example) Failure impact on base case IRR of 5,52% • Solar Bankability Webinar 11/22/2016 14

Failure Impact – Business Model 3 (Example) Failure impact on base case IRR of 5,52% Distribution of failure costs • Solar Bankability Webinar 11/22/2016 15

Risk Scenario – Business Model 3 (Example) Risk scenario - businss model 3 Risk Risk number Risk name Start Date Case Phase Risk 1 3020 Hotspot of modules 01.01.2012 Best Infant Risk 2 2) 3101 Flooding of inverter 01.08.2017 Worst Mid-life Risk 3 1) 3051 Lightning strike of inverter 01.06.2020 Worst Mid-life Risk 4 3011 Failure of bypass diode and juction box 01.10.2026 Worst Wear-out Comments 1) External cause independent from project phase 2) Business model specific risk, i.e. due to system design/technology, geographic/climatic conditions • Solar Bankability Webinar 11/22/2016 16

Risk Scenario – Business Model 3 (Example) Risk scenario - businss model 3 Risk Risk number Risk name Start Date Case Phase Risk 1 3020 Hotspot of modules 01.01.2012 Best Infant Risk 2 2) 3101 Flooding of inverter 01.08.2017 Worst Mid-life Risk 3 1) 3051 Lightning strike of inverter 01.06.2020 Worst Mid-life Risk 4 3011 Failure of bypass diode and juction box 01.10.2026 Worst Wear-out Comments 1) External cause independent from project phase 2) Business model specific risk, i.e. due to system design/technology, geographic/climatic conditions Cumulative cash flow 6.000.000 EUR 4.000.000 EUR 2.000.000 EUR 0 EUR -2.000.000 EUR -4.000.000 EUR -6.000.000 EUR -8.000.000 EUR -10.000.000 EUR 20112012201320142015201620172018201920202021202220232024202520262027202820292030 Base case Risk scenario • Solar Bankability Webinar 11/22/2016 17

Risk Mitigation Measures Guarantee Level 1 Commissioning Guarantee Level 2 Warranty Infant Phase Mid-life Phase Wear-out Phase 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Year • Solar Bankability Webinar 11/22/2016 18

Risk Mitigation Measures Mid-life End of Commissioning advanced warranty check check inspection Guarantee Level 1 Commissioning Guarantee Level 2 Warranty Infant Phase Mid-life Phase Wear-out Phase 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Year • Solar Bankability Webinar 11/22/2016 19

Solar Bankability and Risk Management New capital market regulations like Basel III or Solvency II require thorough due diligence and risk management procedures • Solar Bankability Webinar 11/22/2016 20

Project Reports: www.solarbankability.eu • Solar Bankability Webinar 11/22/2016 21

Final Public Workshop 7 th -8 th February 2017 Brussels, Belgium Enhancement of PV Investment Attractiveness Concept: Target groups: Finance sector, insurance, EPCs, service providers, decision makers / broader attendance 1.5-day-Workshop including networking dinner Fully paid workshop for max. 120 participants Registration available: End of Oct 2016 Save the date: 7-8 Feb 2017! • Solar Bankability Webinar 11/22/2016 22

Thank nk you! u! Matthias v. Armansperg, ACCELIOS Solar This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreem ent No 649997. The content of this report reflects only the author’s view and the Commission is not responsible for any use that may be made of the information it contains Funded by the Horizon 2020 Framework Programme of the European Union