Financials glossary

Details about the Financials section of the GridLauncher

The energy generation tab

Understanding primary generation, battery storage and backup generation

An offgrid microgrid has its energy generation system designed with three main components:

• Primary generation

  • Dispatchable (can be turned on and off)

    • CHP/Cogen, turbines, engines and generators

  • Non-dispatchable

    • Solar PV and Wind turbine

• Battery storage (automatically selected with Solar PV and Wind Turbine)

• Backup generation, most commonly used diesel generator (required with offgrid microgrids)

Battery storage is required with solar PV and wind turbine as primary generation to provide electricity at night and times of low wind.

In addition, a backup generation is necessary to also maintain reliable operations and in case of emergency.

Combined Heat and Power (CHP) is a technology that concurrently produces electricity or mechanical power and useful thermal energy (heating and/or cooling) from a single source of energy.

CHP/Cogen mechanics

Estimating the energy generation size

Consumers load profile

A common, basic concept related to electricity is the amount of kWh consumed for a period which is the amount of electricity a consumer needs to run their house, business, etc....

Another fundamental aspect is the maximum amount of electricity a consumer needs which is generally considered when all appliances are turned on at the same time, also known as the peak load in kW which is the largest amount of power demanded by a consumer to turn on all of their appliances, devices, and sometimes machinery, at once.

To make it easy for all users, the GridLauncher proposes predefined categories of consumers (households, businesses, manufacturers and the anchor company) enabling anchors to define who their consumers are and how many of them are to be included in the consumption profile of their community microgrid project. A mapping interface is included to help visualize these potential consumers.

The Duck Curve phenomena

Generation capacity

To meet the electricity needs of the consumers at all time in the day and night, the energy generation capacity needs to be sized up and complex calculations need to be computed to handle normal operations as well as emergency situations.

Energy professionals run the microgrid profile through their own model to output the best ratio between generation capacity and cost, while providing the adequate technologies and combinations to ensure that the electricity generated meets the needs at all time.

In some cases, backup generation might be operated in support of the primary generation, optimizing cost and reliability. In other cases, it might be necessary to account for a cushion of generation capacity (10-20%+).

Quick feasibility study estimated at +/- 30% margin of error to what the final number will be

As projects progress, data inputs get more accurate, refining outputs down to +/- 5% margin of error

While setting realistic expectations at the project feasibility level, all costs and revenue are estimated.

Even though our software uses detailed consumption and production inputs, professional expertise from engineers and developers is required to launch the projects.

Categories of cost items

Capital cost items

Understanding Capital cost items

1) Engineering, Procurement and Construction (EPC) CAPEX (Capital Expenditures)

EPC is the cost to purchase and install the energy generation and storage equipment, including the inverters.

For the sake of simplicity, GridLauncher assumes a loan financing term of 10 years for this category.

2) Ancillary cost (equipment) CAPEX

All capital expenses NOT related to the energy generation and storage equipment as defined above.

This category includes smart meters, transfer switches, remote breakers, site preparation, technical consultants and a microgrid control center.

3) TOTAL COST (Estimated to launch) in USD

This is the capital needed to be raised to develop the project and launch.

OPEX (Operational expenditures, i.e. annual cost to operate the microgrid) (USD)

This category estimates all operational cost items annually.

Included items are DexGrid software, operation & maintenance (O&M), project insurance, standalone distribution lease, fuel cost per kWh.

TOTAL ANNUAL LOAN REPAYMENT (debt service) (USD)

This category covers the annual cost related to the financing of the Total Cost, including principal and interest. This annual cost goes to zero at the term of the loan.

AVERAGE ANNUAL PROJECT REVENUE (USD)

This item is calculated as retail rate (Tariff) per kWh * total annual consumption (kWh).

ITC DISCOUNT, IF AVAILABLE (USD)

The solar Investment Tax Credit is a federal tax credit for those who purchase solar energy systems for residential, commercial or utility scale properties. The credit, only available to state-based equipment ownership, is applied to the owner's federal income tax return debt and is equal to a percentage of the cost of eligible equipment.

The ITC discount is assumed at 30%.

REC REVENUE, IF AVAILABLE (USD)

This is an annual revenue available to producers of clean energy. The most common forms of renewables are solar and wind but also hydrogen and other forms of biogas fuels.

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