Heat network template financial model
For use by financial modellers to input values from a techno-economic model, and evaluate key financial aspects of a prospective heat network opportunity.
Documents
Details
This template financial model is designed specifically for heat network development in the UK. Financial modellers can use it to input cash flow and energy balance outputs from a techno-economic cash flow model to evaluate, among other things:
- funding structures
- legal ownership of key assets (generation, distribution and customer interfacing/retail), implications of business-to-business charging mechanisms and respective investor returns (up to 3 operating companies can be modelled)
- financial statements (real and nominal)
- sensitivity analysis
- standardised detailed dashboard exploring variety of aspects of the project and its financial structuring
- possible implications of inflation on nominal returns
- tariff structuring
- customer detriment analysis
- model solver
- social calculations (social IRR and social NPV)
- other core metrics (such as simple payback, discounted payback, levered IRR)
- emissions analysis of the network
- project summary largely in line with the Green Heat Network Fund (GHNF) requirements
User guide
The accompanying user guide explains the inputs, outputs and core calculations. The model requires a financial modeller to populate it with project specific cash flows and publicly available information, including capital expenditure, operating costs, commodity prices, emissions factors, counter-factual costs and so on. The user guide sets out how to do this, and provides links to relevant material.
Model review
The model has been reviewed externally by Operis and the letter confirming their review and the methodology used is also included.
Last updated 12 April 2023 + show all updates
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2023 independent model review: confirmation letter added.
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First published.