Economic Modelling

To enable a comprehensive economic assessment to be conducted and identify the most economically viable solution: each case study was evaluated, reviewing the total income and expenditure of the system over the project lifetime.

Project Expenditure

Project expenditure includes all the financial business outgoings, including: all component costs, in addition to the expected interest rates payable when the cash flow falls into a deficit.

Project Revenue

Project revenue includes all the income from the sale of: electricity (firm vs non-firm), Renewable Obligation Certificates (ROC’s) and hydrogen fuel (stand alone scenario only).

Summary of Findings

It was found that generating power using a buffering mechanism would result in huge levels of debt; in excess of tens of millions of pounds; at the end of the project lifetime and this was the case for both the off grid, stand alone scenario, as well as the strong grid, flat power scenarios.

This was not the case for producing power utilising a wind farm alone. As expected, this resulted in healthy profit margins at the end of the project lifetime, however, the intermittent problems with renewables and the lack of security of supply were left unresolved, without the aid of any buffering mechanism.

The findings can be reviewed in depth under the ‘case study evaluation’ tab.

Having identified the closest case study to being economically viable; the stand-alone system based on Stornoway, which still produced a considerable amount of debt at the end of the project lifespan; sensitivities and future economic predictions were applied.