The document discusses the techno-economic analysis of wind power investments, including calculation of key economic indicators such as net present value (NPV), internal rate of return (IRR), payback period, levelized cost of electricity (LCOE), and profitability index (PI). It provides definitions and formulas for each indicator, and highlights their advantages and weaknesses. The document also presents a numerical case study analyzing the economic feasibility of a 20MW wind farm project in Greece based on these indicators.

1. Funded by
EU GCC CLEAN ENERGY NETWORK II
Join us: www.eugcc-cleanergy.net
Contact us: contact@eugcc-cleanergy.net
Dimitrios Angelopoulos & Dimitrios Kanellopoulos

2. Funded by
Techno-economic Analysis
• Examination of the economic feasibility of
wind power investments;
• Calculation of the appropriate economic
indicators;
• Sensitivity analysis of the key input
parameters.

3. Funded by
Economic Indicators
• Net Present Value (NPV)
• Internal Rate of Return (IRR)
• Payback Period
• Levelized Cost of Electricity (LCOE)
• Profitability Index (PI)

4. Funded by
Economic Indicators
• Net Present Value (NPV)
• Internal Rate of Return (IRR)
• Payback Period
• Levelized Cost of Electricity (LCOE)
• Profitability Index (PI)

5. Funded by
Net Present Value
• Differences between the present values of cash inflows and cash outflows.
• Most usable metric for assessment of investment’s profitability.
• Positive NPV expresses economic feasibility of the project examined.
• Project with the highest NPV is considered as most preferable for
investment.
– 𝐶 𝑂: Investment cost
– 𝑃𝑉𝑡: Present value of cash flows in year t
– 𝑑 : Discount rate
– 𝑁: Project duration (in years)
– 𝑆𝑉𝑁: Salvage value of investment in Nth year
𝑁𝑃𝑉 = −𝐶 𝑂 +
𝑡=1
𝑁
𝑃𝑉𝑡
1 + 𝑑 𝑡
+
𝑆𝑉𝑁
(1 + 𝑑) 𝑁

6. Funded by
Net Present Value
Advantages
+ Direct measure of the profit contribution to the stakeholders (equity and
debt providers).
+ Easy to calculate.
+ Inflation and returns are taken into account.
Weaknesses
- Projects with different project lifetimes may not be directly compared with
each other.
- Sensitive to reliability of future cash flows.
- It is assumed that the future cash flows are reinvested with the discount rate
of the initial investment.
- Project size in not taken into account.

7. Funded by
Economic Indicators
• Net Present Value (NPV)
• Internal Rate of Return (IRR)
• Payback Period
• Levelized Cost of Electricity (LCOE)
• Profitability Index (PI)

8. Funded by
Internal Rate of Return
• It is the interest rate that makes NPV of a project equal to zero.
• Every examined investment/project should provide higher IRR than the
enterprise’s cost of capital.
• The project with the highest IRR is, then, promoted for implementation.
Basic Assumptions
• The investment is held till maturity.
• All intermediate cash flows are reinvested at the IRR.
• Identical time intervals between two cash flows are necessary.
𝑁𝑃𝑉(𝑑=𝐼𝑅𝑅) = 0

9. Funded by
Internal Rate of Return
Advantages
+ Easy to understand.
+ Expresses returns and not absolute profit values (as NPV) – most
preferable from investors.
+ May be estimated regardless of the discount rate level.
Weaknesses
- Difficulty of IRR calculation, especially, in cases of non-stable cash flows.
- It is assumed that the future cash flows are reinvested with the discount
rate of the initial investment.
- When two examined projects are mutually exclusive, then the investment
with the highest IRR is not exclusively the most profitable.

10. Funded by
NPV vs IRR
Timing of cash flows and project sizes
may result in conflicting outcomes in
the NPV and IRR methods.
Attention!!

11. Funded by
Economic Indicators
• Net Present Value (NPV)
• Internal Rate of Return (IRR)
• Payback Period
• Levelized Cost of Electricity (LCOE)
• Profitability Index (PI)

12. Funded by
Payback Period
• Represents the time period (in years) needed in order to “pay back”
project’s initial investment.
• The minimum acceptance and ranking criteria are set by decision
makers/investors.
𝑃𝑎𝑦𝑏𝑎𝑐𝑘 𝑃𝑒𝑟𝑖𝑜𝑑 =
𝐼𝑛𝑖𝑡𝑖𝑎𝑙 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡
𝐶𝑎𝑠ℎ 𝐼𝑛𝑓𝑙𝑜𝑤 𝑝𝑒𝑟 𝑃𝑒𝑟𝑖𝑜𝑑

13. Funded by
Payback Period
Advantages
+ Easy to understand and use
+ Biased towards liquidity
+ Is based on earlier cash flows
Weaknesses
- Ignores the time value of money
- Ignores differences in risk of alternative investments
- Uses an arbitrary cutoff point to determine which projects to reject
- Ignores cash flows after the payback period
Advancement - Discounted Payback Period
 Takes into consideration the time value of money
 Investment decision is based on its comparison with an acceptable time
horizon
𝑁𝑃𝑉(𝑁=𝐷𝑃𝑃) = 0

14. Funded by
Economic Indicators
• Net Present Value (NPV)
• Internal Rate of Return (IRR)
• Payback Period
• Levelized Cost of Electricity (LCOE)
• Profitability Index (PI)

15. Funded by
Levelized Cost of Electricity
• Representation of the cost of electricity produced per unit (euro/MWh)
• Inclusion of annualized electricity production and cost, at present values
• Direct comparison of LCOE with the electricity selling price
• Acceptance of investments with the lowest LCOE
𝐿𝐶𝑂𝐸 =
𝐼𝐶 + 𝑡=1
𝑁 𝑂&𝑀𝑡
(1 + 𝑑) 𝑡
𝑡=1
𝑁 𝐸𝑡
(1 + 𝑑) 𝑡
=
𝐼𝐶 ∙ 𝐶𝑅𝐹 + 𝑂&𝑀 𝑎𝑛𝑛𝑢𝑎𝑙
𝐸 𝑎𝑛𝑛𝑢𝑎𝑙
Where:
 𝐼𝐶 : Investment Cost €
 𝑂&𝑀 : Operation & Maintenance Cost €
 𝐸 : Annual Electricity Production [MWh]
 𝑑 : Discount Rate [%]
 𝐶𝐹 : Capacity Factor [%]
 𝐶RF : Capital Recovery Factor [%]
 t : Year of Operation 𝑦𝑒𝑎𝑟
 N : Project lifetime 𝑦𝑒𝑎𝑟
𝐶𝑅𝐹 =
𝑑
(1 − ( 1 + 𝑑 −𝑁
)

16. Funded by
Economic Indicators
• Net Present Value (NPV)
• Internal Rate of Return (IRR)
• Payback Period
• Levelized Cost of Electricity (LCOE)
• Profitability Index (PI)

17. Funded by
Profitability Index
• It is extracted by dividing the future cash flows with the initial investment
cost.
• Expresses the value created for each monetary unit expensed.
• Accepted investments are those with PI>1.
• Selection of the project with the highest PI among investment alternatives.
𝑃𝐼 =
𝑁𝑃𝑉 + 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝐶𝑜𝑠𝑡
𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝐶𝑜𝑠𝑡

18. Funded by
Profitability Index
Advantages
+ Easy to understand
+ Closely related to NPV, leading generally to identical decisions
+ Used by companies when available funding is limited
Weaknesses
- Same as IRR, it may lead to wrong decisions when comparing two
mutually exclusive projects.
- It is assumed that the future cash flows are reinvested with the discount
rate of the initial investment.

19. Funded by
Numerical Case Study
• Assessment of the economic attractiveness of a typical
onshore wind power plant in Greece;
• Calculation of the respective economic indicators;
• Sensitivity analysis of the main input parameters.

20. Funded by
Numerical Case Study
Project Wind park
Area Greece
Total Power (MW) 20
Capacity Factor (%) 25,7%
Production (MWh) 45.000
Investment Cost (€/MW) 1.200.000 €
Operation & Maintenance Costs (€/kW/year) 47
Total Investment Cost (€) 24.000.000 €
Basic Information
2,250 full
load hours

21. Funded by
Numerical Case Study
Grants 0,00 € 0 %
Equity capital 12.000.000 € 50 %
Debt capital 12.000.000 € 50 %
Debt rate (%) 7 % Capital Structure
Debt term (years) 10
Electricity Price (€/MWh) 98 €
Discount Rate (%) 10 %
Project Lifetime (years) 20
Corporate tax rate (%) 29 %
Economic Input Data

22. Funded by
Numerical Case Study
Indicators Values
Net Present Value (NPV)
-62.413 €
1.973.870 €
Internal Rate of Return (IRR)
-0,03 %
1,09 %
Discounted Payback Period (DPP) >20 Years
Profitability Index (PI) 0,997
Levelized Cost of Electricity (LCOE) 83,5 €/MWh
Financial Indicators Debt/Equity
ratio:
0/100
Debt/Equity
ratio:
50/50
Funded totally
by Equity
capital
Taxes &
Interests are
not included!

23. Funded by
Numerical Case Study
• Calculation of the discounted net cash flows (for investment funded totally by equity or by
equity and debt) during the first 10 years of operation
Year 1 2 3 4 5 6 7 8 9 10
INCOME 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 €
EXPENSES 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 €
EBITD 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 €
DEPRECIATION 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 €
EBIT 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 €
INTERESTS -840.000 € -779.203 € -714.150 € -644.543 € -570.064 € -490.372 € -405.101 € -313.861 € -216.234 € -111.773 €
EBT 1.430.000 € 1.490.797 € 1.555.850 € 1.625.457 € 1.699.936 € 1.779.628 € 1.864.899 € 1.956.139 € 2.053.766 € 2.158.227 €
TAXES - Equity -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 €
TAXES - Equity & Debt -414.700 € -432.331 € -451.197 € -471.382 € -492.981 € -516.092 € -540.821 € -567.280 € -595.592 € -625.886 €
Present Value - Equity 2.556.091 € 2.323.719 € 2.112.472 € 1.920.429 € 1.745.844 € 1.587.131 € 1.442.847 € 1.311.679 € 1.192.435 € 1.084.032 €
Present Value - Equity
& Debt 2.615.900 € 2.433.735 € 2.264.255 € 2.106.578 € 1.959.881 € 1.823.399 € 1.696.422 € 1.578.287 € 1.468.379 € 1.366.125 €

24. Funded by
Year 1 2 3 4 5 6 7 8 9 10
INCOME 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 €
EXPENSES 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 €
EBITD 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 €
DEPRECIATION 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 €
EBIT 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 €
INTERESTS -840.000 € -779.203 € -714.150 € -644.543 € -570.064 € -490.372 € -405.101 € -313.861 € -216.234 € -111.773 €
EBT 1.430.000 € 1.490.797 € 1.555.850 € 1.625.457 € 1.699.936 € 1.779.628 € 1.864.899 € 1.956.139 € 2.053.766 € 2.158.227 €
TAXES - Equity -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 €
TAXES - Equity & Debt -414.700 € -432.331 € -451.197 € -471.382 € -492.981 € -516.092 € -540.821 € -567.280 € -595.592 € -625.886 €
Present Value - Equity 2.556.091 € 2.323.719 € 2.112.472 € 1.920.429 € 1.745.844 € 1.587.131 € 1.442.847 € 1.311.679 € 1.192.435 € 1.084.032 €
Present Value - Equity
& Debt 2.615.900 € 2.433.735 € 2.264.255 € 2.106.578 € 1.959.881 € 1.823.399 € 1.696.422 € 1.578.287 € 1.468.379 € 1.366.125 €
Numerical Case Study
• Calculation of the discounted net cash flows (for investment funded totally by equity or by
equity and debt) during the first 10 years of operation
𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑏𝑒𝑓𝑜𝑟𝑒 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡𝑠, 𝑇𝑎𝑥𝑒𝑠 𝑎𝑛𝑑 𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛
(𝐸𝐵𝐼𝑇𝐷) = 𝐼𝑁𝐶𝑂𝑀𝐸 − 𝐸𝑋𝑃𝐸𝑁𝑆𝐸𝑆

25. Funded by
Year 1 2 3 4 5 6 7 8 9 10
INCOME 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 €
EXPENSES 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 €
EBITD 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 €
DEPRECIATION 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 €
EBIT 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 €
INTERESTS -840.000 € -779.203 € -714.150 € -644.543 € -570.064 € -490.372 € -405.101 € -313.861 € -216.234 € -111.773 €
EBT 1.430.000 € 1.490.797 € 1.555.850 € 1.625.457 € 1.699.936 € 1.779.628 € 1.864.899 € 1.956.139 € 2.053.766 € 2.158.227 €
TAXES - Equity -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 €
TAXES - Equity & Debt -414.700 € -432.331 € -451.197 € -471.382 € -492.981 € -516.092 € -540.821 € -567.280 € -595.592 € -625.886 €
Present Value - Equity 2.556.091 € 2.323.719 € 2.112.472 € 1.920.429 € 1.745.844 € 1.587.131 € 1.442.847 € 1.311.679 € 1.192.435 € 1.084.032 €
Present Value - Equity
& Debt 2.615.900 € 2.433.735 € 2.264.255 € 2.106.578 € 1.959.881 € 1.823.399 € 1.696.422 € 1.578.287 € 1.468.379 € 1.366.125 €
Numerical Case Study
• Calculation of the discounted net cash flows (for investment funded totally by equity or by
equity and debt) during the first 10 years of operation
𝐸𝐵𝐼𝑇 = 𝐸𝐵𝐼𝑇𝐷 − 𝐷𝐸𝑃𝑅𝐸𝐶𝐼𝐴𝑇𝐼𝑂𝑁

26. Funded by
Year 1 2 3 4 5 6 7 8 9 10
INCOME 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 €
EXPENSES 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 €
EBITD 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 €
DEPRECIATION 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 €
EBIT 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 €
INTERESTS -840.000 € -779.203 € -714.150 € -644.543 € -570.064 € -490.372 € -405.101 € -313.861 € -216.234 € -111.773 €
EBT 1.430.000 € 1.490.797 € 1.555.850 € 1.625.457 € 1.699.936 € 1.779.628 € 1.864.899 € 1.956.139 € 2.053.766 € 2.158.227 €
TAXES - Equity -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 €
TAXES - Equity & Debt -414.700 € -432.331 € -451.197 € -471.382 € -492.981 € -516.092 € -540.821 € -567.280 € -595.592 € -625.886 €
Present Value - Equity 2.556.091 € 2.323.719 € 2.112.472 € 1.920.429 € 1.745.844 € 1.587.131 € 1.442.847 € 1.311.679 € 1.192.435 € 1.084.032 €
Present Value - Equity
& Debt 2.615.900 € 2.433.735 € 2.264.255 € 2.106.578 € 1.959.881 € 1.823.399 € 1.696.422 € 1.578.287 € 1.468.379 € 1.366.125 €
Numerical Case Study
• Calculation of the discounted net cash flows (for investment funded totally by equity or by
equity and debt) during the first 10 years of operation
𝐸𝐵𝑇 = 𝐸𝐵𝐼𝑇 − 𝐼𝑁𝑇𝐸𝑅𝐸𝑆𝑇𝑆

27. Funded by
Numerical Case Study
• Calculation of the discounted net cash flows (for investment funded totally by equity or by
equity and debt) during the first 10 years of operation
𝑃𝑟𝑒𝑠𝑒𝑛𝑡 𝑉𝑎𝑙𝑢𝑒 𝐸𝑞𝑢𝑖𝑡𝑦 = 𝐸𝐵𝐼𝑇𝐷 − 𝑇𝐴𝑋𝐸𝑆 𝐸𝑞𝑢𝑖𝑡𝑦
𝑇𝐴𝑋𝐸𝑆 𝐸𝑞𝑢𝑖𝑡𝑦 = 𝐸𝐵𝐼𝑇 ∗ 𝑇𝑎𝑥 𝑅𝑎𝑡𝑒
Year 1 2 3 4 5 6 7 8 9 10
INCOME 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 €
EXPENSES 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 €
EBITD 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 €
DEPRECIATION 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 €
EBIT 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 €
INTERESTS -840.000 € -779.203 € -714.150 € -644.543 € -570.064 € -490.372 € -405.101 € -313.861 € -216.234 € -111.773 €
EBT 1.430.000 € 1.490.797 € 1.555.850 € 1.625.457 € 1.699.936 € 1.779.628 € 1.864.899 € 1.956.139 € 2.053.766 € 2.158.227 €
TAXES - Equity -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 €
TAXES - Equity & Debt -414.700 € -432.331 € -451.197 € -471.382 € -492.981 € -516.092 € -540.821 € -567.280 € -595.592 € -625.886 €
Present Value - Equity 2.556.091 € 2.323.719 € 2.112.472 € 1.920.429 € 1.745.844 € 1.587.131 € 1.442.847 € 1.311.679 € 1.192.435 € 1.084.032 €
Present Value - Equity
& Debt 2.615.900 € 2.433.735 € 2.264.255 € 2.106.578 € 1.959.881 € 1.823.399 € 1.696.422 € 1.578.287 € 1.468.379 € 1.366.125 €

28. Funded by
Numerical Case Study
• Calculation of the discounted net cash flows (for investment funded totally by equity or by
equity and debt) during the first 10 years of operation
Year 1 2 3 4 5 6 7 8 9 10
INCOME 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 €
EXPENSES 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 €
EBITD 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 €
DEPRECIATION 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 €
EBIT 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 €
INTERESTS -840.000 € -779.203 € -714.150 € -644.543 € -570.064 € -490.372 € -405.101 € -313.861 € -216.234 € -111.773 €
EBT 1.430.000 € 1.490.797 € 1.555.850 € 1.625.457 € 1.699.936 € 1.779.628 € 1.864.899 € 1.956.139 € 2.053.766 € 2.158.227 €
TAXES - Equity -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 €
TAXES - Equity & Debt -414.700 € -432.331 € -451.197 € -471.382 € -492.981 € -516.092 € -540.821 € -567.280 € -595.592 € -625.886 €
Present Value - Equity 2.556.091 € 2.323.719 € 2.112.472 € 1.920.429 € 1.745.844 € 1.587.131 € 1.442.847 € 1.311.679 € 1.192.435 € 1.084.032 €
Present Value - Equity
& Debt 2.615.900 € 2.433.735 € 2.264.255 € 2.106.578 € 1.959.881 € 1.823.399 € 1.696.422 € 1.578.287 € 1.468.379 € 1.366.125 €
𝑃𝑟𝑒𝑠𝑒𝑛𝑡 𝑉𝑎𝑙𝑢𝑒 𝐸𝑞𝑢𝑖𝑡𝑦&𝐷𝑒𝑏𝑡 = 𝐸𝐵𝐼𝑇𝐷 − 𝑇𝐴𝑋𝐸𝑆 𝐸𝑞𝑢𝑖𝑡𝑦&𝐷𝑒𝑏𝑡 − 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡𝑠 ∗ 𝑇𝑎𝑥 𝑅𝑎𝑡𝑒
𝑇𝐴𝑋𝐸𝑆 𝐸𝑞𝑢𝑖𝑡𝑦&𝐷𝑒𝑏𝑡 = 𝐸𝐵𝑇 ∗ 𝑇𝑎𝑥 𝑅𝑎𝑡𝑒

29. Funded by
Year 11 12 13 14 15 16 17 18 19 20
INCOME 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 € 4.410.000 €
EXPENSES 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 € 940.000 €
EBITD 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 € 3.470.000 €
DEPRECIATION 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 € 1.200.000 €
EBIT 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 €
INTERESTS 0 € 0 € 0 € 0 € 0 € 0 € 0 € 0 € 0 € 0 €
EBT 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 € 2.270.000 €
TAXES - Equity -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 €
TAXES - Equity & Debt -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 € -658.300 €
Present Value - Equity 985.484 € 895.894 € 814.449 € 740.408 € 673.099 € 611.908 € 556.280 € 505.709 € 459.735 € 417.941 €
Present Value - Equity
& Debt 985.484 € 895.894 € 814.449 € 740.408 € 673.099 € 611.908 € 556.280 € 505.709 € 459.735 € 417.941 €
Numerical Case Study
• Calculation of the discounted net cash flows (for investment funded totally by equity or by
equity and debt) during the last 10 years of operation

30. Funded by
Numerical Case Study
Equity Capital Investment
Present Value Payback
-24.000.000 € -24.000.000 €
2.556.091 € -21.443.909 €
2.323.719 € -19.120.190 €
2.112.472 € -17.007.718 €
1.920.429 € -15.087.289 €
1.745.844 € -13.341.445 €
1.587.131 € -11.754.313 €
1.442.847 € -10.311.467 €
1.311.679 € -8.999.788 €
1.192.435 € -7.807.353 €
1.084.032 € -6.723.321 €
985.484 € -5.737.837 €
895.894 € -4.841.943 €
814.449 € -4.027.493 €
740.408 € -3.287.085 €
673.099 € -2.613.986 €
611.908 € -2.002.078 €
556.280 € -1.445.799 €
505.709 € -940.090 €
459.735 € -480.354 €
417.941 € -62.413 €
IRR DPP
-0,03% > 20 years
Equity & Debt Capital Investment
YEAR
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Present Value Payback
-24.000.000 € -24.000.000 €
2.615.900 € -21.384.100 €
2.433.735 € -18.950.365 €
2.264.255 € -16.686.110 €
2.106.578 € -14.579.532 €
1.959.881 € -12.619.651 €
1.823.399 € -10.796.252 €
1.696.422 € -9.099.829 €
1.578.287 € -7.521.542 €
1.468.379 € -6.053.163 €
1.366.125 € -4.687.038 €
985.484 € -3.701.554 €
895.894 € -2.805.660 €
814.449 € -1.991.211 €
740.408 € -1.250.802 €
673.099 € -577.704 €
611.908 € 34.204 €
556.280 € 590.484 €
505.709 € 1.096.193 €
459.735 € 1.555.929 €
417.941 € 1.973.870 €
IRR DPP
1,09% 15,94
YEAR
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

31. Funded by
Sensitivity Analysis
Electricity price
-20,0%
-15,0%
-10,0%
-5,0%
0,0%
5,0%
10,0%
(€30.000.000)
(€25.000.000)
(€20.000.000)
(€15.000.000)
(€10.000.000)
(€5.000.000)
€0
€5.000.000
€10.000.000
€15.000.000
€0,00 €20,00 €40,00 €60,00 €80,00 €100,00 €120,00 €140,00
IRR
NPV
Electricity Price
NPV - Equity & Debt
IRR - Equity & Debt

32. Funded by
Sensitivity Analysis
Capacity Factor
-8,0%
-6,0%
-4,0%
-2,0%
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
(€15.000.000)
(€10.000.000)
(€5.000.000)
€0
€5.000.000
€10.000.000
€15.000.000
€20.000.000
0,00% 5,00% 10,00% 15,00% 20,00% 25,00% 30,00% 35,00% 40,00% 45,00%
IRR
NPV
Capacity Factor
NPV - Equity & Debt
IRR - Equity & Debt

33. Funded by
Sensitivity Analysis
Discount rate
-2,0%
-1,0%
0,0%
1,0%
2,0%
3,0%
4,0%
5,0%
6,0%
(€4.000.000)
(€2.000.000)
€0
€2.000.000
€4.000.000
€6.000.000
€8.000.000
€10.000.000
€12.000.000
0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 12,00% 14,00% 16,00%
IRR
NPV
Discount Rate
NPV - Equity & Debt
IRR - Equity & Debt

34. Funded by
Sensitivity Analysis
Debt Capital
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
€0
€500.000
€1.000.000
€1.500.000
€2.000.000
€2.500.000
€3.000.000
€3.500.000
€4.000.000
€4.500.000
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
IRR
NPV
Debt Capital
NPV - Equity & Debt
IRR - Equity & Debt

35. Funded by
Sensitivity Analysis
Debt Term
0,0%
0,2%
0,4%
0,6%
0,8%
1,0%
1,2%
1,4%
1,6%
1,8%
€0
€500.000
€1.000.000
€1.500.000
€2.000.000
€2.500.000
€3.000.000
€3.500.000
0 2 4 6 8 10 12 14 16
IRR
NPV
Debt Term
NPV - Equity & Debt
IRR - Equity & Debt

36. Funded by
Conclusions
• Economic analysis is a critical process to examine if
an investment/project is worthwhile;
• Different economic indicator may be used to
examine financial feasibility of wind energy projects;
• There is no uniform criterion for investment decision
making - a combination of indices is most preferable;
• Several scenarios of input parameters are vital in
order to examine project attractiveness under
different conditions.

37. Funded by
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