Power Plant Model

Hey, hope I am not too late and I can still be useful. In renewables as in really everything your revenue model is a PxQ... but in this case it comes with a twist.

For P, either you sell to the pool - that is to the electricity market - or you have your production hedged through a PPA (power purchase agreement). In both cases your prices are inputs: either a curve from the likes of Pöyry or a specified price from the PPA hedge.

For Q, it depends on three main factors: your MW of capacity, your hours of exposure and the load factor -- which only tells you how many hours of exposure you are getting out of those you could be getting.

When modeling a power plant just also bear in mind the CapEx required. Many of these new parks follow a project finance structure where the flows from the sale of electricity go to repay the debt. Just assume a plain vanilla debt repayment scheme and you should be good

If you need any further assistance in the matter, please let me know. Hope I could be a bit useful

Cheers