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HUANENG SHANDONG RUYI

(PAKISTAN) ENERGY PVT LTD

Humaira Athar MSc-CE09-S18


Kanwal Shafique MSc-CE09-S18
Hareem Dar MSc-CE26-F18
Nasiha Zila-e-Huma MSc-CE30-F18
PROJECT DETAILS
Coal fired Power plant located near Sahiwal
Capacity = 660 MW x 2
Capital Cost = 767.868 Million USD
Thermal Efficiency = 39%
Heating Value of Coal = 22046 BTU/kg
Year of Construction = 2015
Construction period = 48 months

From thermal efficacy and heating value of local coal we the calculated
consumption of coal as 262 tons/kW
GIVEN PARAMETERS FOR COST EVALUATION
Capital Investment = 767.868 Million USD
Customs Duty = 30.497 Million USD
Fuel Cost = 4.29 Rs/kW/hr
Lime Stone Cost = 0.09 Rs/kW/hr
Ash removal Cost = 0.22 Rs/kW/hr
O&M (Fixed) = 0.287 Rs/kW/hr
O&M Cost (Variable) = 0.114 Rs/kW/hr
Working Capital Cost = 0.2276 Rs/kW/hr
Insurance Cost = 0.1021 Rs/kW/hr
Debt Repayment = given against each year (10 years)
Interest Charges = given against each year (10 years)
Tariff set by NEPRA = 8 Rs/kW/hr
OTHER FACTORS

Customs Duty = 5.95% of the 66.75% of capital cost


Debt Equity ratio = 75:25
USD to PKR conversion = 97.10 as per 2015
Tariff = 8 Rs/kW/hr (stated by NEPRA)
Time value of Money =12% decreasing per year
By Converting all the given cost parameters into USD/year we can generate the Cash flow
as stated in the table
HOW TO DO IT?
Convert all the costs in an excel spread sheet from Rs/kW/hr to USD/year
Sort out the expenditures (negative)
List down the revenue generated (positive)
Specify the time period for evaluation = 30 years
Calculate the Net Cash Flow
Estimate the present worth by incorporating time value of money
Net present values of year (N) should be calculated by adding net cash
flow of year (N-1) and present worth of year (N)
USD = 97.1PKR as of 2015
CASH FLOW CHART (CASE 1) Tariff = 8 Rs/kW/hr (NEPRA)

Net Present Value


Income by Energy
Debt Repaymemt
Custom Duty and

Interest Charges
Cost of Working
Total Limestone
Total Fuel Cost

Present Worth
Insurance Cost
Variable O&M

Net Cash Flow


Disposal Cost

Total Cost of

Total Cost of
Fixed O&M
No of Years

Production
Total Ash
Purchase

Capital
Taxex

Cost
USD USD USD/year USD/year USD/year USD/year USD/year USD/year USD/year USD/year USD/year USD/year USD USD USD
0 -767868000 -30496837 -798364837 -798364837 -798364837
1 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 -61906586 -37482154 476341916 -719938916 -642802603 -1441167441
2 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 -65026626 -34362115 476341916 -641512994 -511410231 -1231349147
3 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 -68307431 -31081310 476341916 -563087073 -400794256 -1042307250
4 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 -71749001 -27633785 476341916 -484655197 -308007139 -871094212
5 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 -75369200 -24019541 476341916 -406229275 -230505400 -715160597
6 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 -79168026 -20220714 476341916 -327803354 -166075381 -572304656
7 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 -83157390 -16225396 476341916 -249371478 -112802992 -440606346
8 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 -87355153 -12033588 476341916 -170945556 -69042043 -318413521
9 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 -91755361 -7627424.9 476341916 -92513680.2 -33361361 -204306917
10 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 -96387787 -3000954.1 476341916 -14087758.6 -4535881.2 -97049561.4
11 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 476341916 163726903.7 47067572.4 32979813.86
12 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 476341916 341541566 87665213.2 251392116.9
13 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 476341916 519356228.3 119023043 460564609
14 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 476341916 697170890.6 142654977 662011205.3
15 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 476341916 874985552.9 159856589 857027479.8
16 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 476341916 1052800215 171734521 1046720074
17 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 476341916 1230614877 179232093 1232032308
18 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 476341916 1408429540 183151600 1413766478
19 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 476341916 1586244202 184173702 1592603241
20 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 476341916 1764058864 182874276 1769118478
21 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 476341916 1941873527 179739060 1943797924
22 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 476341916 2119688189 175176353 2117049880
23 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 476341916 2297502851 169528039 2289216228
24 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 476341916 2475317513 163079124 2460581975
25 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 476341916 2653132176 156066007 2631383521
26 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 476341916 2830946838 148683619 2801815795
27 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 476341916 3008761500 141091598 2972038436
28 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 476341916 3186576163 133419610 3142181111
29 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 476341916 3364390825 125771947 3312348109
30 -255518089 -5358847 -134906.3 -6787872 -17088766 -13551927.5 -86845.8516 476341916 3542205487 118231465 3482622290
USD = 97.1PKR as of 2015
DISCUSSION ON CASE 1 *Tariff = 8.8014 Rs/kW/hr first 10 years
= 6.8377 Rs/kW/hr after 10 years

As per the conversion rate of 2015, the tariff rates calculated seam feasible

3500

3000

2500
Net Present Value (Mio USD)

2000

1500

1000

500

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
-500

-1000

-1500

-2000
Number of Years
* By NEPRA (Reference Attached)
USD = 141.6PKR as of 2019
CASH FLOW CHART (CASE 2) Tariff = 8 Rs/kW/hr (NEPRA)

Income by Energy
Debt Repaymemt
Custom Duty and

Interest Charges
Cost of Working
Total Limestone
Total Fuel Cost

Present Worth
Insurance Cost
Variable O&M

Net Cash Flow


Disposal Cost

Total Cost of

Total Cost of

Net Present
Fixed O&M

Production
Total Ash
Purchase

Capital
Taxex

Value
No of Years

Cost
USD USD USD/year USD/year USD/year USD/year USD/year USD/year USD/year USD/year USD/year USD/year USD USD USD
0 -767868000 -30496837 -798364837 -798364837 -798364837
1 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 -42451480 -25702805 359365637 -792202461 -707323625 -1505688463
2 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 -44590998 -23563286 359365637 -786040084 -626626342 -1418828803
3 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 -46840759 -21313525 359365637 -779877707 -555101547 -1341141631
4 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 -49200763 -18949439 359365637 -773711247 -491707485 -1271585192
5 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 -51683258 -16471027 359365637 -767548870 -435527842 -1209239089
6 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 -54288244 -13866041 359365637 -761386493 -385742093 -1153290962
7 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 -57023888 -11126314 359365637 -755220033 -341623189 -1103009682
8 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 -59902439 -8251845.8 359365637 -749057656 -302531824 -1057751857
9 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 -62919814 -5230388.1 359365637 -742891196 -267894013 -1016951669
10 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 -66096427 -2057857.6 359365637 -736728819 -237206962 -980098159
11 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 -571298353 -164234625 -900963444
12 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 -405867888 -104176178 -675474531
13 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 -240437422 -55102051 -460969939
14 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 -75006956.1 -15347909 -255785331
15 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 90423509.62 16520037.1 -58486919
16 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 255853975.4 41735325.7 132158835.3
17 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 421284441.2 61357694.8 317211670.2
18 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 586714906.9 76296166 497580607.2
19 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 752145372.7 87329175 674044081.9
20 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 917575838.5 95122118.9 847267491.6
21 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 1083006304 100242643 1017818481
22 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 1248436770 103173949 1186180253
23 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 1413867236 104326373 1352763143
24 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 1579297702 104047454 1517914690
25 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 1744728167 102630680 1681928381
26 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 1910158633 100323078 1845051245
27 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 2075589099 97331803.1 2007490436
28 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 2241019565 93829848.1 2169418947
29 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 2406450030 89960982.6 2330980547
30 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 2571880496 85844031.4 2492294062
DISCUSSION ON CASE 2 USD
*Tariff
= 141.6PKR as of 2019
= 8.8014 Rs/kW/hr first 10 years
= 6.8377 Rs/kW/hr after 10 years

As per the conversion rate of 2019, the tariff rates as per 2015 the
project are partially sustainable only after 16 years

* By NEPRA (Reference Attached)


CASH FLOW CHART (CASE 3) USD
*Tariff
= 141.6PKR as of 2019
= 10.7 Rs/kW/hr first 10 years
= 6.8377 Rs/kW/hr after 10 years

Income by Energy
Debt Repaymemt
Custom Duty and

Interest Charges
Cost of Working
Total Limestone
Total Fuel Cost

Present Worth
Insurance Cost
Variable O&M

Net Cash Flow


Disposal Cost

Total Cost of

Total Cost of

Net Present
Fixed O&M

Production
Total Ash
Purchase

Capital
Taxex

Value
No of Years

Cost
USD USD USD/year USD/year USD/year USD/year USD/year USD/year USD/year USD/year USD/year USD/year USD USD USD
0 -767868000 -30496837 -798364837 -798364837 -798364837
1 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 -42451480 -25702805 436886441 -714681657 -638108622 -1436473460
2 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 -44590998 -23563286 436886441 -630998477 -503028122 -1217709780
3 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 -46840759 -21313525 436886441 -547315297 -389568217 -1020566694
4 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 -49200763 -18949439 436886441 -463628033 -294643997 -841959293
5 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 -51683258 -16471027 436886441 -379944853 -215590913 -679218946
6 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 -54288244 -13866041 436886441 -296261673 -150095383 -530040236
7 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 -57023888 -11126314 436886441 -212574409 -96157867 -392419540
8 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 -59902439 -8251845.8 436886441 -128891229 -52057006 -264631415
9 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 -62919814 -5230388.1 436886441 -45203965.6 -16301003 -145192232
10 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 -66096427 -2057857.6 436886441 38479214.7 12389277.3 -32814688.3
11 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 203909680.5 58619160.5 97098375.22
12 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 369340146.2 94800416.4 298710096.8
13 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 534770612 122555622 491895768.1
14 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 700201077.8 143275013 678045625.3
15 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 865631543.5 158147647 858348724.4
16 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 1031062009 168188548 1033820092
17 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 1196492475 174262358 1205324367
18 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 1361922941 177103901 1373596376
19 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 1527353407 177336081 1539259022
20 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 1692783872 175485428 1702838835
21 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 1858214338 171995598 1864779470
22 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 2023644804 167239087 2025453425
23 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 2189075270 161527389 2185172193
24 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 2354505735 155119790 2344195060
25 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 2519936201 148230980 2502736715
26 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 2685366667 141037631 2660973832
27 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 2850797133 133684083 2819050750
28 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 3016227598 126287241 2977084374
29 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 3181658064 118940798 3135168396
30 -255518089 -3674746 -63437.23 -4654678 -11718356 -9293023.73 -126646.474 450479441 3347088530 111718866 3293376930
DISCUSSION ON CASE 3 USD
*Tariff
= 141.6PKR as of 2015
= 8.8014 Rs/kW/hr first 10 years
= 6.8377 Rs/kW/hr after 10 years

As per the conversion rate of 2019, the new tariff should be at least
10.7rs/kW/hr in order to make the project feasible after 10 years operation
4000

3000
Net Present Value (Mio USD)

2000

1000

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

-1000

-2000
Number of Years
CONCLUSION

To make the project feasible new tariff structure stated by NEPRA in
2015, has to be re-evaluated for project feasibility.
Since the construction of project started in 2015 and it is completed in
2019 the conversion rate of PKR to USD has drastically increased.
Therefore, new tariff structure should be incorporated . Otherwise, the
plant will be running in loss thus a burden on the country’s economy.
REFERENCES
National Electric Power Regulatory Authority NEPRA,(Pakistan)
https://nepra.org.pk/Tariff/IPPs/Huaneng%20Shandong%20Ruyi%20(Pakistan)%20Energy%20(Private)%20Limite
d/TRF-308%20HUANENG%20UPFRONT%20COAL%20DETERMINATION%2031-03-2015%204385-87.pdf

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