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How important is the discount rate? Calculate and plot the levelized cost of energy (LCOE) as a function of the debt rate for 4%=idebt=12% for a large utility-scale PV plant in Abu Dhabi. The size of the plant is 400MW, the debt to equity ratio is 80:20.

Equity returns are set at 10%. In AD the plant achieves 1700FLH on average per year. The overnight cost of constructing the plant is 0.5US$/Wpeak installed.

Opex costs are 1% of the Capex.

How much should the overnight costs drop to counteract an increase of debt from 4% to 8% in order to keep the LCOE equal to what it was at 4% financing?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92765168

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