Solar case study: reducing uncertainty

Overview

Our client, a leading Renewables business, asked us if we could assist them with:

1. Updating pre-construction estimates of the long-term yield by assessing the first years of operation and comparing them with long-term solar resource trends;
2. In doing so, provide bankable energy yield assessments suitable for project financing.

An energy yield assessment based upon measured, operational data should provide long-term values that are more certain than those based upon pre-construction estimates. This increase in certainty is reflected in improvements to the financial terms against which the assets are valued.

If operational data for an asset is available, it is always a good idea to update a pre-construction estimate of the yield, as various assumptions based on predictions are now fully understood. A revised energy yield assessment is helpful during the operational phase of a solar farm in order to assess the operational performance and to inform future investment decisions.

How we helped

LR analysed the monthly production data report and also the budgeted values from the sites in the solar portfolio. The reported availabilities were also included within this analysis. Therefore an independent gauge of the performance of the assets during the first years of operation was created.

Following this, a long-term adjustment of the production data, with reference to solar climate statistics using a Measure-Correlate-Predict (MCP) technique, was performed.

The impact

This provided a long-term average ideal power for each of the assets.

The trends in availability of the plants were assessed and, with an understanding of the degradation typical for the technology used, applied to these figures to provide net values for the estimated 20 years of the project’s lifetime. This was followed by an uncertainty analysis from which the energy yields at various confidence levels (P50 and P90) were derived.

Smart solution

Compared to the pre-construction assessment, the margin of uncertainty was reduced by a third as a result of the increased understanding of the performance of the assets in the field.

LR produced a series of financial grade energy yield assessments for the solar sites in the portfolio, providing a valuable resource for project financing.