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This is a web interface on top of an opensource spreadsheet, and it lists its assumptions very openly. I can quibble with some of them, but my main "Eh, wait, what?" is their interest rate assumptions, as the only available settings are zero, 7 and 10. Which is respectively "So, economic crisis for the next 37 years?" "Way to fracking high" and "You are joking, right?". I would like to do the cost calculations with a sane interest paid - like 3-5%.
by Thomas on Thu Oct 11th, 2012 at 01:21:51 PM EST
On a business-as-usual trajectory, another 37 years of back-to-back crisis is not out of the question.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Oct 11th, 2012 at 02:45:35 PM EST
[ Parent ]
Oh, there's lots of nonsense in the inherent assumptions. And the claimed transparency isn't really there either.

Smoke and mirrors.

That's not to say it's useless. But it's a tool that's more adept at misleading (as you've unwittingly found with the scenarios you've created), than informing.

by LondonAnalytics (Andrew Smith) on Sat Oct 13th, 2012 at 11:13:49 AM EST
[ Parent ]
It depends who's paying, doesn't it?

According to the Crown Estate's most recent work (see p5 on the PDF at the Project Finance link in the right sidebar), a WACC of 10.1% for offshore wind is about par for the course. (and I'd love to hear Jerome's view on that)

by LondonAnalytics (Andrew Smith) on Sat Oct 13th, 2012 at 01:07:57 PM EST
[ Parent ]
That's probably a bit high, given that utilities would have a cost of capital of 8-10% and debt costs around 6%. Even a more aggressive owner with costs of capital at 12-15% will leverage 70 (debt):30 (equity) for an average cost of capital of 8% or so.

Wind power
by Jerome a Paris (etg@eurotrib.com) on Mon Oct 15th, 2012 at 02:22:57 AM EST
[ Parent ]

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