Medium size power project developers can now access the kind of financial analysis and modeling services that were previously available only to large-scale generation companies. At the same time, larger generators can expect to find more flexible modeling available at lower prices than ever before. Thanks to the rapidly-improving capabilities of analytical software, high quality financial intelligence has become more accessible to business operations at all points in the value chain, from wholesale investors to end-use customers.
Having built their own business on the development of high performance financial modelling, Sapling Financial Consultants is an example of the added value available from leading edge software, analysis and tools. “Our financial modelling service helps developers to price projects, demonstrate customer savings and raise capital,” explains Rob Hong, Co-Founder of Sapling. With more than 80 clients and involvement in transactions exceeding $1 billion, many of them in the power supply field, the company has clearly found a niche for itself that aligns reasonably closely with the IPP market.
Based in Canada, with a growing presence in the US market, the core of Sapling’s service is financial and operational modelling that is able to responsibly depict the economics of a generator or storage asset. Distinguishing themselves from many others, Mr. Hong notes, “We have extensive experience in analyzing electricity rate orders in jurisdictions across North America.” Combining this expertise with power project operational data and current customer bills allows the company to project customer savings available from hosting a new power project. Such quantifications can be extremely helpful when trying to select the site for a power project, and of course for raising the capital to build.
“For one customer, the economic analysis is relatively straightforward,” he explains. “We look at the upfront capital investment vs the long term recouping of that investment, considering variable costs such as OMA. We need to consider the cost of debt and equity, and we are ready to model out revenue hour by hour, to get an accurate picture of net cash flow.” With this kind of data in hand, Sapling will frequently scale up the analysis to support investors making their own longer term projections on multiple projects.
In business since 2015, the company has set its sights on the growing US market while remaining based in Canada. One of the company’s recent initiatives is the “Sapling Retooling Model Contest,” which aims to “help a company to execute on their re-tooling idea and build up on the shifting customer demand.”
For more information, readers may visit www.saplingfinancial.com.