poster title poster title continued - nrel · pdf fileposter title poster title continued ......

Poster TitlePoster Title continued

ResearchersrsquoPresentersrsquo NamesInstitutionOrganizationCompany

Methods

Methods

Figure3 ProjectEnergyYieldforallthreecasestudies

WhyResourceMatters ImpactsofPreconstructionResourceDataonLongͲTermProductionEstimatesandProjectFinance

PaulThienpontndash MeteorologistMarieSchnitzerndash VPConsultingServicesRebeccaTilbrookndash SolarServicesTeamLead

bull Determinehowvarioussourcesofsolarandmeteorologicaldataimpactproductionestimates

bull Determinehowuncertaintyofdatasetsinhibittheabilitytoleveragetheproject

bull Determinehowplantoverproductioncanleadtolostrevenue

bull Determinehowplantoverproductioncanresultinlowerrateofreturnsfordebttaxequityandcash equityfinancepartners

Accurateresourceandenergyproductionassessmentsareneededtoestablishprojectrevenueswith confidencetherebysizingdebtappropriatelyHoweverwhenplantperformanceexceedsthepreͲ constructionenergyestimatewhatarethefinancialimplications

Thispresentationwillreviewtheimpactsofoverproductionontaxequityanddebtfinancingmodels whileevaluatingthemajorvariablesthatcontributetoplantsoutperformingthepreͲconstruction energyestimatessuchassolarresourceinputdataplantlossassumptionsanduncertainty

SomedevelopersarestillrelyingonhigheruncertaintyornonͲsitespecificsolarresourcedataforinputs intoenergysimulationmodelsThesedatasetstypicallyhavealargeruncertaintybandandareless accurateeitherunderͲestimatingoroverͲestimatingtheresourceattheprojectlocationWhenusedin anenergysimulationtherearedirectimpactsontheforecastedenergyproductionAdditionally accurateplantlossconsiderationsarecrucialtobestrepresentthelongͲtermproductionofthesolar plantWhenpoorplantlossassumptionsaremadeinconjunctionwithinaccurateandhighuncertainty solarresourcedatasetsactualplantproductionmayvaryconsiderablyfromthepreͲconstruction estimate

Plantproductionandtheassociatedrevenuearekeyinputsintofinancialmodelsusedtosizedebtortax equitycontributionsThereforerelyingonapoorqualityresourceandenergyestimatecanleadtoless thanoptimaldebtsizingwhichcanresultinlowerreturnsoninvestmentforequitypartners

Abstract

Objectives

Methodology Resource Inputs TotesttheimpactsofpotentialoverͲproductionAWSTevaluatedthreegeographicallydiversesitesacrossthe

UnitedStatesstudyingtheimpactsofhowvariousresourceinputspredictlongͲtermresourceversusahigh qualitygroundreferenceThesourcesofdataincludedTypicalMeteorologicalYear(TMY)from bull Satellitederiveddataset bull NationalSolarRadiationDatabase(NSRDB)TMY3[1] bull GroundmeasureddatafromtheUnitedStatesClimateReferenceNetwork(USCRN)[2]

ThegroundmeasurementsfromtheUSCRNsiteswereusedasthebaselineforallresultsandassumedtobe representativeoftheactualirradianceonsite

Thethreeprojectsitesselectedwerein bull MercedCalifornia bull TusconArizona bull MillbrookNewYork

UncertaintyforeachdatasetwereassessedutilizingAWSTrsquosstandardapproach Energy Analysis EnergywassimulatedforeachofthestudiedresourcefilesusingthePVSyst Software AllthreesitesweresimulatedusingAWSTruepower standardlossassumptions Basicplantdesignsareasfollows

bull 125MWDC 100MWAC (DCACRatio125) bull Generic300Wpolycrystallinemodule bull Generic500kWinverter bull RowtiltoptimizedforeachprojectlocationusingPVsyst bull Modeledwithoutnearshading bull Plantlossassumptionswereappliedconsistentlyforeachprojectlocationandresourceanalysis

Uncertainty Analysis Uncertaintyaroundresourcedataasapercentageoftheresourcedataishighlyvariableanddependenton

thesourceofdatatypeofcampaignandaccuracyofthesensorsutilized bull Measurements1Ͳ 5dependingonthemeasurementcampaign

Investor Interests

bull CashEquityInvestorsLongͲTermenergyproductionestimates(ReliantonP50analysis) bull TaxEquityInvestorsInterestsaregreatestinthebeginningoftheprojectlifeͲcycle(ReliantonP50

analysis) bull DebtLendersInterestedinonlytheminimumabilitytopaybackloan(ReliantonP90P99analysis)

Financial Model Key Performance Metrics bull DebtRatioRatioofacquireddebttocashequity

bull TaxEquityContributionAmountfinancedthroughtaxequityinvestor bull ProjectedInternalRateofReturn(IRR)EstimatedIRRforthecashequityinvestorwhenfinancing

witheachresourcedataset bull ActualIRRRealizedIRRforthecashequityinvestorwhenrunningtheactualgroundmeasured

resourcedatafilethroughthefinancialmodelfortheSatelliteTMYandNSRDBTMY3

Figure3presentsthegrossenergyyieldandlongͲtermnetenergyyieldfortheNSRDBTMY3and SatellitemodeledTMYforeachcasestudylocation

bull FromthisgraphthemostnotabletrendisthattheNSRDBTMY3underͲpredictstheenergy yieldwhencomparedtothegroundmeasureddataatallthreelocations

bull TheSatelliteModeledTMYismorevariableacrosseachregion

Figure4presentstheprojectedrevenuefortheSatelliteModelandtheNSRDBTMY3atthe MercedCAlocationwherebothestimatesunderͲpredictedtheresourceandenergy

bull Inbothcasestheprojectedrevenueislowerthanwhattheplantwouldactuallyproduce bull FortheNSRDBTMY3theestimateislowenoughthatoverthelongͲtermthePPA

overproductionthresholdwouldbemetresultinginlostrevenueofapproximately05

Figure 4 ProjectRevenuefortheMercedCAcasestudy

bull SatelliteModeled5Ͳ 10dependingontheresolutionofthemodelandtheprojectlocation

bull NSRDBTMY310orgreaterdependingontheproximityofthedatasettotheprojectlocation

Projected Revenue PowerPurchaseAgreement(PPA)pricingforeachprojectlocationwasdevelopedusingLocationalMarginal

Pricing (LMP)[3] bull TheBasePricewasassumedtobe15xtheaverageLMP bull TimeofDayandSeasonal(TOD)multipliersweredevelopedfromtherawLMPprices

PotentialprojectrevenuewasestimatedfromthehourlynetenergyandtheTODPPAprice

ProductionthresholdswereassumedwithinthePPAstructure bull GuaranteedEnergywasassumedtobetheannualP50estimate

bull Overproductionlimitationsbeganat110oftheGuaranteedEnergyandpaid75oftheTODPPAprice bull Defaultwasassumedtooccurat70oftheannualP50

Financial Model TraditionalDebtfinancingandTaxEquityFinancingstructureswereevaluated

bull CAPEX$22WAC InstalledCapacity bull OPEX$25kWACyearInstalledCapacity

DebtSizingsizedusingaDSCRof10andP99productionestimates TaxEquityInvestmentsizedassumingan80IRR

Results

Figure5 Exampleoflowuncertainty(left)andhighuncertainty(right)

Figure5illustrateshowenergyestimateswithlargeruncertaintybandscanimpactthe P90P99

bull Whenfinancingwithdebtuseofhigheruncertaintyresourcedatasetswilllimittherisk lendersarewillingtotakeon

Figure6presentstheDebtRatioProjectedIRRandActualIRRforatraditionaldebtfinancing structure

bull TheresultsoffinancingwiththeSatelliteModeledTMYfortheMercedCAcasestudy showsthatthecashequityinvestorwouldhaveyieldedanActualIRRof05lowerthanifa higherqualityresourcedatasetwasusedforfinancingIfweassumea$10Mcashequity investmentovera25Ͳyearprojectlifetimethe05IRRdifferentialwouldhaveacash equivalentofroughly$13Mofunrealizedrevenuepotential

bull TheresultsfromtheNSRDBTMY3analysisyieldactualIRRlossesofnearlydoublethoseof thesatellitemodelwhichisduetothelargeruncertaintybandaroundtheresourcedata ThispointIllustratestheimportanceofhighqualityresourceinputdatatoreducethe spreadbetweenP50toP90P99estimates

Figure7 presentstheTaxEquityContributionProjectedIRRandActualIRRforataxequity financingstructure

bull TheresultsoffinancingwiththeSatelliteModeledTMYfortheMercedCAcasestudy showsthatthecashequityinvestorwouldhaveyieldedanActualIRRof05 lowerthanif ahigherqualityresourcedatasetwasusedforfinancingAsinthescenarioabovefora $10Mcashequityinvestmentovera25Ͳyearprojectlifetimethecashequivalentisroughly $13Mleftonthetable

Conclusions bull Choosinganaccurateandreliablesourceofsolarresourcedataiscriticalforprojectfinancing

bull UnderͲestimatingsolarresourcecanleadtoplantoverproductionandlostrevenuetoPPAcaps

bull PlantoverͲproductioncanresultinlowerreturnsforlenderstaxequityandcashequityfinance partners

Solar Resource

bull GHI DNI DHI bull POA

Energy bull Losses bull Uncertainty

Revenue bull PPA bull OverUnder

Financial Model

bull CAPEX bull OPEX bull Debt

Sizing

Figure1FlowChartofCaseStudyMethodology

Annual Degradation (05 ndash 1 )

Transposition To Plane of Array

(05 ndash 2)

Energy Simulation Plant Losses

(3 ndash 5 )

Solar Resource Uncertainty (5 ndash 17)

Figure2SourcesofEnergyUncertainty

Figure6DebtFinancingStructureProjectYields

Figure7 TaxEquityDebtStructureProjectYields

References [1]NationalSolarRadiationDataBaseldquo1991ndash 2010Updaterdquo httprredcnrelgovsolarold_datansrdb1991Ͳ2010 [2]UnitedStatesClimateReferenceNetworkldquoHourlyDatardquo httpwww1ncdcnoaagovpubdatauscrnproductshourly02 [3]CaliforniaISOldquoOpenAccessSameͲtimeInformationSystemrdquohttpoasiscaisocom [4]PaulThienpontAWSTruepower ldquoIsSolarOverproductionCostingYourdquo18November2014 WebinarhttpswwwawstruepowercomknowledgeͲcenterwebinars

AWSTruepowerLLC|463NewKarner Road|AlbanyNewYork12205|+1Ͳ518Ͳ213Ͳ0044|awstruepowercom

PaulThienpontMeteorologistndash AWSTruepowerLLCpthienpontawstruepowercom

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