Renewable Power Finance (for non-Finance Professionals)

Updated: Dec 29, 2020

Online example shown below, based on 3 x 3-4 hour sessions.

For questions or customisation requests contact: info@greycellsenergy.com



Course objectives – is this for you?


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.



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



Further inquiries to: info@greycellsenergy.com

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