Cashflow Analytics Tool
This tool is designed to give a high-level view of whether it is worth a group or organisation considering proceeding with a hydrogen-producing project or development. The tool will help to identify areas in which costs will be accrued and also make you think of where you may be able to procure income.
How to use the HUGE Project Cashflow Analytics Tool?
The initial investment should be considered as all your up-front costs. This might include the purchase and installation of the various pieces of equipment required for the development of your sites such as your wind turbine and your electrolyser.
This should be inserted as a negative figure (for example, if your initial investment cost of buying your equipment comes to €50,000, insert -50,000)
For energy costs, consider various aspects such as the purchase of electricity from the energy supplier – this may be a payment to a wind or solar farm for the electricity that is being used to convert the water into hydrogen and oxygen through the electrolyser, or to the electric company for electricity used on the site.
Water is required for electrolysis in the process and is, therefore, an integral part of your planning. Costs to consider may be annual business water rates which would be set by the local government agencies and should be available via their website. If not, it may be possible to use an estimate for these based on your knowledge of the area.
This could be in the form of a lump sum upfront payment if the intention is to outright purchase a piece of land. Alternately it could be an ongoing land rental cost paid to a landlord. Other annual costs worth considering here include any payments required to a management company if the land is serviced by another organisation.
One key consideration to include here would be staff costs – is the project likely to employ any part time or full-time staff. This could include engineers, administration staff, caretakers etc. Try and estimate an annual cost in terms of the salary to be paid for these staff and include it here.
For this line consider and attempt to forecast any cash payments that may come out of the project. Things to consider might be payments received for the sale of hydrogen or oxygen or other products related to the process.
Here you would need to consider any potential outgoings that do not fit in other areas. For example, a one-off cash payment for repair services. This could also be a place to include annual interest repayments on any loan taken out to help with the initial investment.
In order to establish how much capital the project will produce each year and when the project may have paid off the full initial investment, the capital return and payback lines must be looked at. The capital return shows how much profit or loss the project may make in each year. The payback line shows how long it will take before the initial investment is paid back and the project will begin to turn profit overall.