Next we are going to model the operations of the business.

And principally what we're looking for here really are revenues and costs.

So we can come to EBITDA in these tabs.

We generally try and get some flags and other rows done first.

That will be helpful throughout the model.

And the first flag we can see here is just whether the project is operational.

Renewables projects in common with a lot of project finance will have a ramp up period, a kind of setup or CapEx period.

And in that period, unusual things will happen such as capitalization and some things won't happen, such as depreciation, fixed costs, that kind of thing.

Now rather than embedding the logic in every line, which would be very difficult to understand and time wasteful, we're going to have a flag here which will be helpful for any line which relies on the project being operational.

Okay? So the way we're going to model that is we're going to say if we, the time is greater or equal to the project operational time because it's the year ending 52.

So that's why it's equal to as well.

We're going to lock that one. Then the project is operational, otherwise it isn't.

And you can see that's turned up as a zero.

Let's copy it down to the right and you can see that the project becomes operational in year 52, which is what we want.

Now, just a note on columns, I'm going to copy to year 55.

I'm not going to copy any further than that and that's because I want there to be a column where I can show you the formula.

The project ramp up is a bit tricky.

What we've got to do is, we've got to say year one is the ramp up year and we want a flag in year one, and that's clearly 52.

We don't want to hard code that or anything else.

And so we need a clever way to say that it's the, the first year of operation that will be the ramp up year.

Now the way I'm gonna achieve that is I'm going to say if I'm then going to do a clever sum, and I'm gonna say I'm going to sum from here to here, which might initially seem a bit odd, okay? But I'm gonna go back into that and lock the initial F6.

And I'm going to say if that sum is equal to one, then it's the first year, otherwise it isn't.

Now it's probably best just to show you this, if I copy to the right, you can see it's working.

Let's see why. If I have two in, you can see that the locking of the sum has meant that the sum is kind of traveling to the right and it's only going to add up to one in the first year, not beyond and not before.

So that does its job really nicely.

Let's get the macroeconomics done.

So we've got an inflation rate of four and we already have a hard coded index of one.

We're going to use this index to inflate any real cost and we need to be comfortable with that terminology.

So real is uninflated. You might hear, Hear something like nominal or money as inflated.

If we need to go from one to the other, then we'd like to use an index and that will be helpful throughout this tab and other tabs.

And so what we're going to do is we're gonna say, okay, one plus the inflation rate times whatever's to the left, and then we should see that inflating nicely.