The MODAF project has been kept by Cepel, in partnership with Eletrobras, aiming to develop tools and methodologies capable of supporting the investment decisions of the Eletrobras group's companies, dealing in a proper manner with the uncertainties present in the Brazilian electrical sector. The main product of this project is the ANAFIN model, used to determine the economic and financial viability of new power transmission and generation projects, such as wind, solar PV, hydro and thermal generation from natural gas, coal, oil and biomass.
Figure 1 – Opening screen of the ANAFIN user interface.
From an economic point of view, the viability analysis of a power generation project is based on the projection of its cash flows, obtained from the forecasting of several variables that compose them. In this context, ANAFIN model has two viability analysis modules: a deterministic and a probabilistic one.
Using the deterministic module, cash flow analysis is performed from representative values of the variables involved in the study, which leads to the determination of a set of viability indicators, among which are:
- Net Present Value (VPL).
- Internal Rate of Return (TIR).
- Break-even Price (PEQ) – the minimum energy price that pays back the project shareholders' capital.
- Equilibrium Investment (INVEQ) – the maximum capital expenditure that the project can support, such that the shareholders' capital is recovered.
- Equilibrium Interest Rate (TJEQ) – maximum interest rate negotiated with the project's funding institutions such that the shareholders' capital is recovered.
Considering that most variables involved in an economic analysis cannot be estimated with 100% accuracy, the ANAFIN deterministic module works with the project's uncertainties in two different ways: (i) sensitivity analyses and (ii) scenario analyses of such variables. Using one of these methods, it is possible to separate intervals that define the acceptance or rejection of the project.
On the other hand, using the probabilistic module of ANAFIN, uncertainties related to the random behavior of the electricity spot price, and the random behavior of the project generation, can be taken into account in an explicit way. It is done whether through iteration with the chain of optimization models developed by Cepel or through the use of statistical simulation techniques. Using this module probabilistic indicators are obtained, such as the average value of the NPV distribution or the probability of a negative NPV occurs.
Finally, MODAF project encompasses permanent support to the Eletrobras group's companies, and to the Brazilian Ministry of Mines and Energy, in the development of studies related to power generation financial and commercial aspects.
Figure 2 – Graphical results of the viability analyses performed by ANAFIN.
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