This course is intended as a time-efficient finance primer for those from a non-financial background, enabling them to ‘read’ financial models & analyses presented to them, and to understand the variables most influencing renewable power project investment decisions.
You will leave with a clear explanation of the common elements of a financial model and the key terminology (plus a provided Excel model with which to revise and cement your learning). You want to understand the key financial variables, without being swamped by detailed terminology and complexity. You want to appreciate how financial analysis and investment considerations connect to project development processes and decision-making.
Over three days you will…
Learn to speak the language of finance, to better interact with investors and business case developers
Understand how to ‘read’ a financial analysis sheet, without being swamped by the minutiae and detail
Learn how project risks feed through to financing costs and energy price competitiveness
Analyse which internal project variables and external market factors are most important to financial outcomes
Explore the financial considerations of trends such as multiple revenue streams and energy storage
Understand the relevance of metrics such as ‘LCOE’, ‘WACC’ & ‘DSCR’ in business planning
Take away an Excel cash flow sheet which you can use to revise and solidify your learning
Course Outline
Session 1: Building the business case
Session 2: Understanding risk, financing costs and return targets
Session 3: Investigating additional details, trends, and metrics
Agenda
Session 1: Building the business case
This first session overviews the fundamental financial variables within a renewable power project and shows how they map to a cashflow analysis (including one which is provided, in Excel format). How should you ‘read’ a financial analysis, from revenue to returns? What are the main differences to be considered for different power project types? Which factors influence the balance towards project viability? How much detail is required?
Fundamentals of the business case: the key cost and revenue variables
Introducing and understanding the cashflow sheet
The ‘cashflow waterfall’
Defining some commonly used terminology (IRR, NPV, EBITDA, DSCR etc.)
Strengths and limitations of a simple model
Key timeframes, including revenue certainty, debt tenor and project lifetime
Contrasting cost structures between different renewable power project types
The project lifecycle and financial risk
Policy mechanisms and their financial influence
Session 2: Understanding risk, financing costs and return targets
Ultimately, finance is all about the balance between taking risks and making money. That balance is what we explore in this session. What do investors want (and how do they differ)? Which factors will decide a project’s access to project finance debt? Why is financing structure and cost so critical to project competitiveness?
Financing costs and discount rates (risk vs. return)
Sources of finance and their risk/reward expectations
Debt, equity, debt/equity ratios, ‘WACC’
Sources of risk in energy production and capacity factor
Market-based revenue risks
Unpacking factors in ‘bankability’
Understanding resource uncertainty and its application to the financial model (P50, P90)
Connecting resource assessment uncertainty to debt sizing and leverage
How multiple factors combine to determine energy prices in competitive auctions
Session 3: Investigating additional details, trends, and metrics
Real projects will include many complexities and specifics that will alter the financial case, so we explore some examples of those here; along with some further metrics and analytical approaches. How does the decision to use multiple channels to market impact financial risk and return? How do additions like energy storage add to the process and complexity of financial analysis? Why is ‘levelised cost of energy’ such a commonly used metric and how does it relate to a cashflow model?
Additional considerations around ‘installed cost’ and ‘overnight cost’
The impact of policies around tax and depreciation
Multiple revenue streams, including capacity payments and environmental attributes
Illustrating considerations around refinancing and repowering or project augmentation
Illustrating considerations & complexity around assessing the value-add of energy storage
Sensitivity analysis: the financial model as a dynamic tool
Calculating levelised cost of electricity (LCOE)
Understanding the limitations and applications of LCOE
Examples of other freely available financial analysis tools and resources
Course Benefits:
It's Interactive: Q&A with your course leaders and a chance to network with other attendees
Slides and Recordings: Receive all recordings and slides to learn at your own pace
No Travel: All workshops are delivered online, ideal for your new WFH office
Certificate: All attendees will receive a certificate once they've completed the programme
Meet the trainer
Dr John Massey is Managing Director of Grey Cells Energy Ltd., where he conducts independent market assessment and opportunity/risk analysis for clean energy technologies. He delivers market briefings, oneto- one coaching and training courses worldwide, both online and in-person, along with strategy and business plan consulting to help companies (particularly SMEs) position themselves to best grasp new low-carbon market opportunities.
In addition to delivering training globally under his “Grey Cells Energy” brand, John is a co-founder of Astute New Energy, helping firms to navigate the changing power sector through business, strategy and stakeholder communication advisory work.
What Attendees Are Saying
“The best part of the training was the level of engagement from the trainer; he was very clear in his explanations and was taking the time to answer all queries from trainees.”
“Slides were informative, good delivery from the trainer, and technology worked well. Good idea to space it out over three days as it was less disruptive.”