Monday, November 28, 2016

LCOE and Excel

Here's a funny thing that people might be interested to know. I was building a model in Excel to play around with LCOE calculation - a topic to which I'll be returning - and I found out some interesting things about the Excel NPV function. I found that if you're asking the NPV function to calculate the net present value of a sequence of cells, if there's an empty cell, the NPV function ignores the empty cells and moves on to the next occupied one. This can mean that late years are under-discounted if you've got empty cells. Filling the cells with zeros or a formula returning zero fixes the problem. I spent a while chasing this down, so hope this is useful. I'm sure readers who have got this far know that Excel effectively assumes payments at the end of each year (i.e. the first year is discounted by a full year's discount rate). You may wish to correct for mid year cashflows, or even more precisely if your cashflows are well constrained in time. The reason I've been doing this is that I'm looking hard at the LCOE function - which I'm not sure fairly evaluates long term projects, or projects with variable risk. More on this over the next few weeks.

Monday, November 21, 2016


When we looked away from the wave and tidal marine energy sector in 2009, we were monitoring around 60 tidal energy and 60 wave energy conversion devices. We're now re-engaging with the sector and undertaking our initial screening research. Many of the devices we were watching in 2009 are still around, and some have made significant progress. Sad to say, some have gone by the wayside. But what's really got our attention is the multiplication of devices in the sector. We can now see around 130 tidal energy devices and more than 300 wave devices. We've undertaken our initial screening of the tidal devices to identify the top 20 or so, and are just beginning to do the same for the wave sector. As a sneak peek, the shortlisted 24 tidal devices and companies include Atlantis, Andritz, Clean Current Power Systems, Flumill, Mako, OpenHydro, Scotrenewables, Tocardo and Verdant. In coming weeks, we will be undertaking our objective scoring to determine our views on technical and commercial feasibility for these devices and plan to publish the new Redfield Marine Renewables Review in early 2017. It's going to be in two volumes: tidal and wave. We're looking forward to visiting the International Tidal Energy Summit in London later this week, and will report back with our impressions after that.

Thursday, November 03, 2016

It's been a long time, but we're back

After an extended break, learning about the oil services economy and spending some time trying to provide innovative services to reshape the offshore wind maintenance challenge, Redfield Consulting is relaunching. We are looking forward to getting re-engaged with the offshore, wind and tidal industries, and in parallel, John Aldersey-Williams plans to undertake a PhD in the economics and policy of this sector, to understand its economic, socio-economic and green costs and benefits better and to boost the support we can offer to its players. We're already realising how things have changed - a number of tidal developers are now developing significant projects, offshore wind is progressing at a truly industrial scale but the wave sector seems to have lost pace. Over the coming weeks, we'll be catching up on this, and also developing a roadmap for funding for marine developers. It's good to be back.