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RELCOST
RELCOST Financial - Economic Calculator
The RELCOST Financial model, a Microsoft Excel spreadsheet template, is used for evaluating the financial viability of energy projects. It can be used to evaluate a variety of factors key to project success, such as the minimum power sales or carbon offset price, the optimum mix of equity and capital to attract investors, or sensitivity to incentives. Three methods of evaluating financial performance are provided by RELCOST: life cycle cost analysis, proforma statements, and financial ratios.
Proforma financial statements provided are the Income Statement, Cash Flow Statement, Balance Sheet, and Sources/Uses of Funds Statement for each project year in the 20-year analysis period. Flexible user inputs include capital costs for construction, funding (equity, grants, and loans), operating costs (purchased fuels, labor, materials/expendables, etc.), taxes and fees (depreciation, tax credits, franchise costs, tax rates, etc.), cost escalation factors, income from energy, power and co-product sales, and income from sales of carbon offsets, renewable energy credits and renewable energy production incentives. Use of financial ratios and other financial performance indicators enable the RELCOST user to evaluate project financial outcomes under various model scenarios. These model scenarios are displayed on a Financial Scorecard in a stop-light chart (Red-Yellow-Green) for quick assessment. The ability to rapidly conduct "What If" evaluations using sensitivity factors on key project inputs enables the user to determine those factors that represent the greatest amount of risk to the project, obtain guidance on key points of negotiation, identify break-even values, and examine alternative scenarios.
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