Financial Model, Hydrogen, Hydropower, Renewable Energy

10-year Financial Projections, Budgeting, Business Valuation, Cash Flow Analysis, Cash Flow Projections, Debt Schedule, Discount Rate, Dividends, Excel, Financial Analysis, Financial Debt, Financial Feasibility, Financial Model, Financial Modeling, Financial Planning, Financial Projections, Financial Ratios, Financial Statements, Forecast, Forecasting, Income Statement, Investor Cash Flows, Investors, IRR (Internal Rate of Return), Payback Period, Profitability Analysis, Sensitivity Analysis, Startup Financial Models, Three Statement Model | Three Financial Statements, Uses and Sources of Funds

Based on bottom-up assumptions, planning begins by determining the blue hydrogen plant’s daily design capacity, industrial natural gas, electricity, and water consumption. Other key assumptions include the start of the project operations, tax assumptions, uses and sources of funds, and debt financing. These assumptions are then translated into a detailed 40-year financial plan that allows the business owners and management to see how the business should perform from a financial perspective over the following years.

This financial model template is presented in various charts and tables that allow an easy understanding of the feasibility of blue hydrogen production. Calculations of the relevant financial ratios and financial metrics (such as IRR, Payback Period, NPV, and Levelized Cost of Blue Hydrogen per kg) and a debt schedule are also included.

What makes this Blue Hydrogen Financial Model Template Unique?

The following are the reasons why you should choose this template for blue hydrogen production startups:

• Units and Labels: Installed electricity capacity can either be MW or kW, and the label of Hydrogen type changes between Blue or Grey Hydrogen, depending on the production method.
• Carbon Capture and Storage Unit (CCSU): Determining if production will require CCSU will affect the capture end emission of Greenhouse Gas.
• Levelized Costs of Blue Hydrogen: This allows users to understand the levelized blue hydrogen cost per kg or ton at net present value.
• Advanced Tax Models: The Blue Hydrogen plant can potentially benefit from Tax advantages. The model includes an advanced tax model to consider the effect of various possible tax incentives for such plants.
• Detailed Financial Plans: The spreadsheet is designed logically, outlining the calculations of revenues and costs, which adds to the transparency and understanding of the model.

Blue Hydrogen Business Model Template Structure

The financial model is structured with instructions and formulas that are simple and easy to follow, which allows users to run simulations by varying the input assumptions. The elements of this financial model template are enumerated below:

Instructions and Terms contain the cell color codes and the terms and abbreviations used.

Executive Summary and Detailed Summary present the charts and graphs to understand the business plan for Blue Hydrogen better and to answer significant questions such as:

• Is the production of blue hydrogen profitable?
• What are the blue hydrogen production costs?
• How should blue hydrogen pricing be?
• What is the volume of produced blue hydrogen?

These spreadsheets include a 10-year summary of the following:

• Projected Blue Hydrogen Production Financial Statements overview – Income Statement, Balance Sheet, and Cash Flows Statement.
• Levered and Unlevered Free Cash Flows calculating key financial feasibility metrics such as the Internal Rate of Return (IRR), Payback Period, Net Present Value (NPV)
• Uses and Sources of Funds and Debt Financing
• Greenhouse Gas Capture and Emission Summary
• Blue Hydrogen Production Process Efficiency
• Lifetime Profit Distribution and Cash Flows
• Investor Summary
• Levelized Cost of Blue Hydrogen per kg

Assumptions that will translate this financial model into a business plan for Blue Hydrogen production:

• General Settings
  • Currency
  • Constant Maximum Hours and Days per Year
  • Project Details – Name, Location
  • Project Timeline – Blue or Grey Hydrogen Production Operation Years and Plant Lifetime
  • Net Working Capital
  • Inflation and Price Escalation
• Tax Assumptions – General and Advance Tax Model
• Blue Hydrogen Plant Assumptions
  • Blue or Grey Hydrogen Production Method
  • Carbon Capture and Storage Unit (CCSU) Option
  • Blue Hydrogen Plant Production Capacity
  • Capacity Utilization
  • Industrial Natural Gas Consumption
  • Electricity and Water Consumption
  • Price for Blue Hydrogen and Other Income Assumptions
  • Direct Costs of producing Blue Hydrogen
  • Employee Positions and Expenses
  • Operating Expenses
  • Capital Expenditures, CAPEX Schedule, and Maintenance per year
• Greenhouse Gas (GHG) Capture and Emission
  • GHG Emissions Pre Capture
  • Removal Efficiency
• Blue Production Process Energy Efficiency
  • Energy Inputs – Feedstock, Utility, and Carbon Sequestration
  • Energy Outputs – Blue Hydrogen and Byproduct
• Uses and Sourced of Funds
  • Cash Reserve and Net Working Capital
• Debt Financing Schedule
  • Loan Terms
  • Repayment Schedule – Calculated or Manual
  • Interest – Cash or Accrued
• Investors
  • Equity Ownership and Investment Percentages
  • Development (Phase 1) and Buy & Hold (Phase 2)
• Dividend Payout Assumptions

The Operating Model worksheet contains the operational forecasts for producing Blue or Grey Hydrogen:

• Blue or Grey Hydrogen Production Volume
• Greenhouse Gas Capture
• Pricing and Revenue
• Costs to produce Blue or Grey Hydrogen – Direct Costs, Employee Expenses, and OPEX
• Fixed Assets Schedule – Initial CAPEX, Spending allocation, Maintenance, and Depreciation

Monthly Budget Allocation is prepared to have a detailed assessment of the financial feasibility of the blue hydrogen plant. This five-year monthly budget is formulated to start calculation from the selected first target year and operating month of the blue hydrogen production process. Using the monthly budget, users may distribute the monthly production target, annual revenue, and costs for the months that occurred using percentages. Also presented in this spreadsheet are the calculations of blue hydrogen production profit margins and the presentation of Monthly Free Cash Flows (Unlevered and Levered).

Financials contains the comprehensive calculations of the 40-year financial forecast planning and feasibility of the Blue or Grey Hydrogen Production:

• Financial Statements – Income Statement, Balance Sheet, Cash Flow Statement
• Financial Ratios and Blue or Grey Hydrogen Plant Economic Analysis
• Unlevered and Levered Free Cash Flows Statement, Funding Required, and Financial Metrics
• Divided Policy Schedule
• Simple and Advance Tax Model Summary
• Levelized Costs of Electricity and Blue or Grey Hydrogen per kg

Advanced Tax Models present detailed calculations of the State and Federal Income Taxes of the Blue Hydrogen Plant, considering the different tax rates and tax credits.

The Debt Schedule is specially prepared to be presented to banks and investors for funding purposes. It contains financial ratios the banks and investors want to see when evaluating a project’s feasibility. The debt schedule summarizes the drawdowns and repayments based on the assumptions.

Investors’ Cash Flow is prepared to show the calculations of the Equity Multiple and Investors’ IRR, which helps determine if their funding and equity stake percentages during the Buy & Hold and Development Phases would result to profit on their end.

Sensitivity Analysis determines how variables such as prices, expenses, and inflation affect the IRR of a chosen parameter. Users may select Unlevered or Leveled IRRs, and Investors.

Produce your own Blue or Grey Hydrogen now!

Developing a well-prepared and comprehensive financial projection can clarify the possible profit margins, the funding required, and the expected returns. This solid and unique financial model template contains valuable tools that allow users to analyze the financial plan of starting a blue or grey hydrogen business in detail by testing various scenarios and assessing how it affects the project’s viability. The financial model will help business owners decide whether to invest in producing Blue or Grey Hydrogen.

The current model version 1.6, is available in two Excel versions and a PDF Demo Preview:

• Excel Version – Consists of sample figures in the assumptions
• Excel Null Version – No values in the assumption sheet
• PDF Version – Outlines the details of the model structure

File types:
.xlsx (MS Excel)
.pdf (Adobe Acrobat Reader)