ProFastComp

The ProFastComp finance model calculates levelized cost of commodity using ProFAST.

The inputs, outputs, and naming convention for the ProFastComp model are outlined in this doc page.

Finance parameters overview

The main inputs for ProFastComp model include:

• required: financial parameters (params section). These can be input in the ProFastComp format or the ProFAST format. These two formats are described in the following sections:

  • ProFastComp format

  • ProFAST format

• required: default capital item parameters (capital_items section). These parameters can be overridden for specific technologies if specified in the tech_config. Example usage of overriding values in the tech_config is outlined here

• optional: information to export the ProFAST config to a .yaml file

finance_parameters:
  finance_model: "ProFastComp"
  model_inputs: #inputs for the finance_model
    save_profast_to_file: True #optional, will save ProFAST entries to .yaml file in the folder specified in the driver_config (`driver_config["general"]["folder_output"]`)
    profast_output_description: "profast_config" #required if `save_profast_to_file` is True, used to name the output file.
    params: #Financial parameters section
    capital_items: #Required: section for default parameters for capital items
      depr_type: "MACRS" #Required: depreciation method for capital items, can be "MACRS" or "Straight line"
      depr_period: 5 #Required: depreciation period for capital items
      refurb: [0.] #Optional: replacement schedule as a fraction of the capital cost. Defaults to [0.]
    fixed_costs: #Optional section for default parameters for fixed cost items
      escalation: #escalation rate for fixed costs, will default to `inflation_rate` specific in the params section
      unit: "$/year" #optional unit of the cost. Defaults to $/year
      usage: 1.0 #usage multiplier, most commonly is set to 1 and defaults to 1.0

Providing Finance Parameters: ProFastComp Format

Below is an example inputting financial parameters directly in the finance_parameters section of plant_config:

finance_parameters:
  finance_model: "ProFastComp" #finance model
    model_inputs: #inputs for finance_model
      params: #Financing parameters
        analysis_start_year: 2032 #year that financial analysis starts
        installation_time: 36 #installation period in months
        # Inflation parameters
        inflation_rate: 0.0 # 0 for nominal analysis
        # Finance parameters
        discount_rate: 0.09
        debt_equity_ratio: 2.62
        property_tax_and_insurance: 0.03
        total_income_tax_rate: 0.257
        capital_gains_tax_rate: 0.15
        sales_tax_rate: 0.07375
        debt_interest_rate: 0.07
        debt_type: "Revolving debt" #"Revolving debt" or "One time loan"
        loan_period_if_used: 0 #loan period if debt_type is 'One time loan'
        cash_onhand_months: 1
        admin_expense: 0.00 #administrative expense as a fraction of sales
    #default parameters for capital items unless specified in tech_config
    capital_items:
      depr_type: "MACRS" #depreciation method for capital items, can be "MACRS" or "Straight line"
      depr_period: 5 #depreciation period for capital items in years.
      refurb: [0.] #refurbishment schedule, values represent the replacement cost as a fraction of the CapEx

  # To adjust costs for technologies to target_dollar_year
  cost_adjustment_parameters:
    target_dollar_year: 2022
    cost_year_adjustment_inflation: 0.025

This approach also relies on data from plant_config:

• plant_life: used as the operating life ProFAST parameter

Note

inflation_rate is used to populate the escalation and inflation rates in ProFAST entries with a value of 0 corresponding to a nominal analysis.

Providing Finance Parameters: ProFAST format

Note

To avoid errors, please check that plant_config['plant']['plant_life'] is equal to plant_config['finance_parameters']['model_inputs']['params']['operating life']. Or remove operating life from the finance parameter inputs.`

plant config parameter	equivalent params parameter
plant['plant']['plant_life']	operating life

Below is an example of the finance_parameters section of plant_config if using ProFAST input format to specify financial parameters:

finance_parameters:
  finance_model: "ProFastComp"
  model_inputs:
    params: !include  "profast_params.yaml" #Finance information
    capital_items: #default parameters for capital items unless specified in tech_config
      depr_type: "MACRS" ##depreciation method for capital items, can be "MACRS" or "Straight line"
      depr_period: 5 #depreciation period for capital items
      refurb: [0.]
  cost_adjustment_parameters:
    target_dollar_year: 2022
    cost_year_adjustment_inflation: 0.025 # used to adjust costs for technologies to target_dollar_year

Below is an example of a valid ProFAST params config that may be specified in the finance_parameters['model_inputs']['params] section of plant_config:

# Installation information
maintenance:
  value: 0.0
  escalation: 0.0
non depr assets: 250000 #such as land cost
end of proj sale non depr assets: 250000 #such as land cost
installation cost:
  value: 0.0
  depr type: "Straight line"
  depr period: 4
  depreciable: False
# Incentives information
incidental revenue:
  value: 0.0
  escalation: 0.0
annual operating incentive:
  value: 0.0
  decay: 0.0
  sunset years: 0
  taxable: true
one time cap inct:
  value: 0.0
  depr type: "MACRS"
  depr period: 5
  depreciable: True
# Sales information
analysis start year: 2032
operating life: 30 #if included, should equal plant_config['plant']['plant_life']
installation months: 36
demand rampup: 0
# Take or pay specification
TOPC:
  unit price: 0.0
  decay: 0.0
  support utilization: 0.0
  sunset years: 0
# Other operating expenses
credit card fees: 0.0
sales tax: 0.0
road tax:
  value: 0.0
  escalation: 0.0
labor:
  value: 0.0
  rate: 0.0
  escalation: 0.0
rent:
  value: 0.0
  escalation: 0.0
license and permit:
  value: 0.0
  escalation: 0.0
admin expense: 0.0
property tax and insurance: 0.015
# Financing information
sell undepreciated cap: True
capital gains tax rate: 0.15
total income tax rate: 0.2574
leverage after tax nominal discount rate: 0.0948
debt equity ratio of initial financing: 1.72
debt interest rate: 0.046
debt type: "Revolving debt"
general inflation rate: 0.0
cash onhand: 1 # number of months with cash on-hand
tax loss carry forward years: 0
tax losses monetized: True
loan period if used: 0

Override defaults for specific technologies

Capital item entries can be overridden for individual technologies. This means that specific technologies can have different financial parameters defined in tech_config than the defaults set in the plant_config.

Override depreciation period:

Suppose the default depreciation period for capital items is 5 years (set in the plant_config['finance_parameters']['model_inputs]['capital_items']['depr_period']), but we want the depreciation period for the electrolyzer to be 7 years. This can be done in the tech_config as shown below:

technologies:
  electrolyzer:
    model_inputs:
      finance_parameters:
        capital_items:
          depr_period: 7

Custom refurbishment period:

Suppose the default refurbishment schedule for capital items is [0.] (set in the plant_config['finance_parameters']['model_inputs]['capital_items']['refurb']), but we want our battery to be replaced in 15-years and the replacement cost is equal to the capital cost. This can be accomplished in the tech_config as shown below:

technologies:
  battery:
    model_inputs:
      finance_parameters:
        capital_items:
          refurbishment_period_years: 15
          replacement_cost_percent: 1.0

Output values and naming convention

ProFastComp outputs the following data following the naming convention detailed below:

• LCO<x_and_descriptor>: levelized cost of commodity in USD/commodity unit, e.g. LCOH_produced for hydrogen produced.

• wacc_<commodity_and_descriptor>: weighted average cost of capital as a fraction.

• crf_<commodity_and_descriptor>: capital recovery factor as a fraction.

• irr_<commodity_and_descriptor>: internal rate of return as a fraction.

• profit_index_<commodity_and_descriptor>

• investor_payback_period_<commodity_and_descriptor>: time until initial investment costs are recovered in years.

• price_<commodity_and_descriptor>: first year price of commodity in same units as levelized cost.

Naming convention:

• <commodity_and_descriptor>:

  • if commodity_desc is not provided, then <commodity_and_descriptor> this is just commodity. For example, wacc_hydrogen if the commodity is "hydrogen".

  • if commodity_desc is provided, then <commodity_and_descriptor> is <commodity>_<commodity_desc>. For example, wacc_hydrogen_produced if the commodity is "hydrogen" and commodity_desc is "produced"

• <x_and_descriptor>:

  • if commodity_desc is not provided, then <x_and_descriptor> is the upper-case first letter of the commodity. For example, LCOH if the commodity is "hydrogen"

  • if commodity_desc is provided, then <x_and_descriptor> is the upper-case first letter of the commodity followed by the commodity_desc descriptor. For example, LCOH_produced if the commodity is "hydrogen" and the commodity_desc is "produced".