Proforma accounts for Ffynnon oer Windfarm
Ffynnon Oer Windfarm - Proforma cashflow
The first table below shows windfarm cashflows during the past ten years - expenditure on fixed assets and net earnings from operations (EBITDA).
Average annual EBITDA for the period is shown in the proforma accounts above.
The windfarm's useful life has been estimated by dividing the cost of fixed assets by the annual depreciation charge.
Remaining useful life has been estimated as (net book value/ cost of fixed assets) X estimated useful life.
For simplicity, EBITBDA has been extrapolated at a constant rate over the remaining useful life, to give a very approximate value for Internal Rate of Return with no allowance for depreciation.
The second table sets out estimated ongoing cashflows as at 31 December 2020.
The green boxes for discount factor and market value are editable, to enable the user to model the impact of different target discount rates and market valuations.
Default values are entirely arbitrary and no reliance should be placed upon them.
IRR (Internal Rate of Return) represents the discount rate at which the projected cashflows, market price outflow and future business inflows, would equate to zero.
DCF (Discounted Cashflow) with subsidy represents the value of these cashflows discounted using the discount factor input in the green box by the user.
IRR and DCF without subsidy show what the same results would be had the windfarm not benefited from the UK government's Renewable Obligation Certificate scheme which was closed to new entrants after 2017.