Case Study Operations - Revenue
- 03:10
This video builds up the operations of the windfarm.
Transcript
So we're going to sell our megawatt hours.
Now you can see our customers here and the proportions that we're going to sell with a bit of careful locking.
So here, for example, we're going to lock the column, and then when we multiply by the achieved megawatt hours, we're going to lock the row.
Then if we've done that properly, when we copy to the right and we copy down, we should find that we get differing amounts in each year, depending on how many megawatt hours we have and who we're selling to.
So next, we're ready to turn that into revenue.
But to do that, we've got to take these real price prices and turn them into inflated prices.
Prices have been already been expressed in thousands.
Our job is to turn them into inflated thousands.
So if we're clever about it, and initially lock these by column and then multiply by, and then lock this by row, and we should find that we can get the inflated prices and they should be going up. That's a nice sense check. And then we can copy those down.
And again, they should be going up.
That's a nice sense check.
And we've got our inflated prices per megawatt hour.
Now we're now going to sell those megawatt hours and we don't need to lock anything.
Now we can just take this and multiply by this.
Again, the gating has been done earlier, so we don't need any flags or anything attached to this.
We can then copy to the right copy down.
And what we've got there is in thousands, our sales are revenue in terms of electricity. There will be other revenue down the line.
We can then total that up.
And there we have our revenue.
Now, here's the first line that we're going to have to skip, and it's also got blue noting that it's complex and circular.
We're going to charge our off takers for debt service, so they're going to pay for interest and mandatory debt repayments.
We don't know those yet until we've done the debt tab.
So rather than try and do it all here, which just wouldn't work, we're going to skip it.
Similarly, but much shorter term, we can't charge the off-takers for the fixed costs because we don't know the fixed costs yet.
You could argue, well, why don't we calculate the fixed costs? Well, you could, but that would break the flow as to revenue.
We're in a revenue build now, and we don't want to do fixed costs in the middle of revenue.
So unfortunately, in terms of model design, there are hard choices to be made, and here the choices to be made, you need to skip for a little while and then move on.
Now, in terms of moving on, you can see this one is white, and what we do want to do is create entire capacity charge and then down here total up the total revenue.
And if we pull those to the right, we can see that that's working nicely and we've got the total revenue.