complete(rigorous(investmentevaluaon(and( …greenways2go.com › wp-content › uploads › 2015...

!$4,000,000&

!$2,000,000&

$0&

$2,000,000&

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$12,000,000&

0& &1&& &2&& &3&& &4&& &5&& &6&& &7&& &8&& &9&& &10&& &11&& &12&& &13&& &14&& &15&& &16&& &17&& &18&& &19&& &20&&

Cumula4ve&Discounted&Cash&Flow,&$US&

Years&AGer&Ini4al&Opera4on&

Cumula4ve&Discounted&Cash&Flow&Including&Infrastructure&&&Vehicle&Investments&&First&20&Year&Periodd&&&&&&

&Fleet&w/&Infra&1&&

&Fleet&Third&Party&1&&

&Fleet&w/&Infra&2&&

&Fleet&Third&Part&2&&

Ø Complete rigorous investment evalua1on and make informed decisions – Vehicle / fuel / infrastructure choices – Schedule of investment decision events – Educate organiza1on on choices and facilitate decision process

Ø Reduce risk Ø Lay out business strategies

•  Model executes a Simple Cash Flow and a Net Present Value (NPV) Cash Flow analyses related to use of Alterna1ve Fuel Vehicles (AFVs)

–  Fleets that invest in AFVs and/or AFV infrastructure fueled by CNG, LNG, Propane, E85, B20 and Electricity

–  Retail fuelers that invest in AFV infrastructure –  Evalua1ons consider lifecycle costs over 20 years. –  NPV cash flow analysis provides ability to fairly compare alterna1ve investments, by

discoun1ng future values into today’s dollars –  Simple cash flow does not consider the impact of 1me value of money

•  Comparisons between alterna1ve fuel types, including vehicles and infrastructure –  Baseline: tradi1onal fuels à gasoline and/or diesel trucks, cars, buses and other transports –  Comparisons: alt fuels à CNG vs. LNG vs. Propane Autogas vs. E85 vs. B20 –  Vehicle choices: dedicated Alt Fuel vs. Bi-‐fuel (Gasoline-‐Alt Fuel) vs. Dual fuel (Diesel-‐Alt Fuel)

•  Compare impact of miles driven and/or fuel economy (mpg) on investment •  Compare investment alterna1ves, such as self-‐funded vs. borrowing funds

1.   Fleets: own vehicles, but fueled by a Third Party: – NPV is based on the differen>al between tradi9onal and alternate fuel costs from Third Party Retail Fueling

2.   Fleets: own vehicles and invest in their own fueling infrastructure: – NPV: based on the differen>al between tradi9onal fuel costs and all of the costs associated with self-‐fueling with Alt Fuel

3.   Retail opera9ons – NPV is based on margin on chosen alterna>ve fuel

Tradi/onal Fuel Types Gasoline Diesel

Mixed Use

Alterna/ve Fuel Types Compressed Natural Gas (CNG) Liquefied Natural Gas (LNG)

Propane Autogas (PA) Ethanol/Gasoline Blends (e.g. E85) Biodiesel/Diesel Blends (e.g. B20)

Electric Vehicles (EV) Business Case Types

Fleet, self-‐fueled Fleet, 3rd party fueled

Retail fueling

Vehicle Types (Examples) Passenger Car Passenger Truck

Light Commercial Truck Intercity Bus Transit Bus School Bus Refuse Truck

Single Unit Short-‐Haul Truck Single Unit Long-‐ Haul Truck

Motor Home Combina1on Short-‐ Haul Truck Combina1on Long-‐ Haul Truck

Motorcycle

Funding Types Self-‐funded infrastructure Financed infrastructure Self-‐funded vehicles Leased vehicles

Fleet Types Group (e.g. bus, refuse, delivery) Individual vehicle (e.g. municipal) Retail (e.g. customer vehicles)

•  Case Name •  Costs

–  Vehicles –  Infrastructure –  U1li1es –  Fuel –  Marke1ng

•  Opera1onal Profile –  Route logis1cs –  Labor –  Fueling plan –  Maintenance labor & parts –  Insurance

•  Current Fuel Type •  Alterna1ve Fuel Type •  Business Opera1on Type •  Vehicle Usage Profile

–  Miles & Gallons/day –  Miles& Gallons/year

•  Fuel Supply Rates –  Current –  Future

•  Funding Sources •  Incen1ves •  Deprecia1on •  Time Value of Money

–  Interest rates –  Escala1on/Infla1on –  Discount rates

•  Taxes

DESCRIPTION CNG, No Incentive CNG, Infra 30% Incentive

CNG, Infra 30% Incentive, AFV

Incentive

CNG, Infra 50% Incentive, AFV

Incenitve

CASE CASE 1 CASE 2 CASE 3 CASE 4

A. PROJECT CAPITAL COSTS

Compressor/Pump, Dryer, Storage and Dispensing Equipment $ 450,000 $ 450,000 $ 450,000 $ 450,000 Commissioning by Manufacturer $ 6,500 $ 6,500 $ 6,500 $ 6,500 Site Design $ - $ - $ - $ - Equipment Installation $ 970,510 $ 970,510 $ 970,510 $ 970,510 Electric Utility Infrastructure Costs $ - $ - $ - $ -

Gas Utility Infrastructure Costs $ - $ - $ - $ -

Infrastructure Incentive Amounts $ - $ (428,103) $ (428,103) $ (713,505)Total Fueling Infrastructure Investment $ 1,427,010 $ 998,907 $ 998,907 $ 713,505 Facility Infrastructure Modifications (e.g. Maintenance Building) $ 100,000 $ 100,000 $ 100,000 $ 100,000 Alternative Vehicle Marginal Costs (Incl. Incentive Credits) $ 1,250,000 $ 1,250,000 $ 1,250,000 $ 1,250,000 Total Fueling Infrastructure & Vehicle Investment $ 2,777,010 $ 2,348,907 $ 2,348,907 $ 2,063,505 B. OPERATING HOURS PROFILEAverage hours per day fueling occurs (annual average) 12.0 12.0 12.0 12.0 Days per week operation 6.0 6.0 6.0 6.0 Other Days per Year Closed 2.0 2.0 2.0 2.0

Fueling System Equipment and Installation Costs

SELECT BUSINESS OPERATION TYPE F (FLEET-self feuling), or T (Fleet Third Party), OR R (RETAIL)

F F F F

SELECT VEHICLE USAGE BASIS, INVIDUAL VEHICLE BASIS (I), VEHICLE GROUP BASIS (G) OR RETAIL PROFILE (R)

G G G G

VEHICLE COUNT CHECK (Compares usage source with Vehicle Investment inputs) OK OK OK OK

SELECT ALTERNATIVE FUEL CNG, LNG, PA, E85 or B20 CNG CNG CNG CNG

Suggested Demand Basis Flow Rate Minimum (SCFM for CNG, Gallons for other Fuels) 377.82 377.82 377.82 377.82 For Gaseous Alt Fuel Evaluations (CNG)

Design Max. Fueling Rate - Standard Cubic per MINUTE- from all hoses 500 500 700 700

C. FUEL AND BUSINESS MODEL SELECTION FACTORS

D. FUELING RATE- BASED ON EQUIPMENT SELECTION (AVAILABLE SUPPLY)

For Liquid Alt Fuel Evaluations (LNG, PA, E85, B20)Design Max. Fueling Rate - Gallons Alt Fuel per MINUTE- from all hoses 8.00 5.00 3.00 6.00

•  Simple Cash Flow (CF) based model –  Accounts for all investments, revenues, O&M costs –  Amor1za1on of investments –  Deprecia1on where applicable –  Annualized results – net cash flow = cash in – cash out

•  Cumula1ve Cash Flow Analysis –  Looks at each year’s cash in and out –  Cumula1vely adds each year to the first year –  Accounts for infla1on and escala1on –  When investment crosses into posi1ve territory, at 1me t, this = simple payback

!5,000,000%

0%

5,000,000%

10,000,000%

15,000,000%

20,000,000%

25,000,000%

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%

Cumula3

ve%Cash%Flow

,%US%$%

Years%AAer%Ini3al%Opera3on%

Cumula3ve%Cash%Flow%(Simple%Payback),%including%Vehicles%&%Infrastructure%First%Ten%Years%

%75%CNG%MDT%%

Payback

NPV @ 10 years

•  Cumula1ve Net Present Value Analysis = Discounted Cash Flow: –  Used to realis1cally evaluate the viability of capital projects over the life of a project –  Posi1ve NPV means amount of cash that would be added to a business in today’s dollars –  Model can be based on actual cash flows or compara1ve cash flows –  Looks at each year’s cash flows, in and out –  Discounts the net cash flow back for each year to the present to have all ac1vi1es in current year dollars. –  Discounted value for NPV = Cash Flow d = discount rate, n = 1me period (e.g. year)

(1+d)n –  Inverse of Future Value = Cash Flow (1+i)n

Ø  e.g. how much is money worth at some point in the future? –  Cumula1vely adds each year to the first year –  Time horizon shows value of investment and/or compara1ve values between choices, in current dollars

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$2,000,000&

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$14,000,000&

$16,000,000&

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,&US&$&


Cumula4ve&Discounted&Cash&Flow,&including&Vehicles&&&Infrastructure&First&Ten&Years&

&75&CNG&MDT&&

Payback

NPV @ 10 years

ITEM VALUE

Scenario Name NPV vs. Cash Flow

Variable(s) Vehicle Quan1ty, Infra Investment

Fixed Parameters Vehicle daily usage, qty

Alt Fuel(s) CNG

Vehicle Qtys: Years Purchased

25: 1, 50: 1 to 2, 75: 1to 3, 100: 1 to 4

Vehicle Type Heavy Duty Truck

Diesel $/Gal $3.80

Alt Fuel, $/GGE or DGE : COST

$0.80

Funding Self-‐funded

Maintenance Facility Upgrades

Yes

!$4,000,000&

!$2,000,000&

$0&

$2,000,000&

$4,000,000&

$6,000,000&

$8,000,000&

$10,000,000&

$12,000,000&

0& &1&& &2&& &3&& &4&& &5&& &6&& &7&& &8&& &9&& &10&&

Cumula4

ve&Discoun

ted&&Cash&Flow

,&US&$&



&25&CNG&AFV&& &50&CNG&AFV&&

&75&CNG&AFV&& &100&CNG&AFV&&

Payback NPV @ 10 years

Impact of Usage

Δy Δx

Slope

Beler investments = earlier payback, higher slope, greater returns over 1me. Usage: more vehicles and/or more gallons of fuel = beler Return On Investment

NPV is more conserva1ve and realis1c analysis than Simple Payback at 10 or 20 years NPV is truer reflec1on of cash flow in real business

ITEM VALUE

Scenario Name Fuel Usage

Variable(s) Vehicle Quan11es

Fixed Parameters Vehicle daily usage

Alt Fuel(s) CNG


50:1-‐2, 50:1-‐2, 100: 1-‐2, 100: 1-‐2

Vehicle Type Refuse Truck

Diesel $/Gal $3.80


$0.80

Funding Self funded

Maintenance Facility Upgrades

Yes !$5,000,000&

$0&

$5,000,000&

$10,000,000&

$15,000,000&

$20,000,000&

0& &1&& &2&& &3&& &4&& &5&& &6&& &7&& &8&& &9&& &10&&

Cumula4

ve&Discoun

ted&&Cash&Flow

,&US&$&



&CNG&Self&Fund:&50&Refuse&Trucks&&

&CNG&3rd&Party:&50&Refuse&Trucks&&


&CNG&3rdParty:&100&Refuse&Trucks&&

More vehicles = faster payback, beler ROI (slope) and long term NPV

ITEM VALUE

Scenario Name Fuel Usage

Variable(s) Vehicle Quan11es

Fixed Parameters Vehicle daily usage

Alt Fuel(s) CNG

Vehicle Qtys: Years Purchased Over

20:1 to 2, 30:1 to 3, 60: 1 to 4, 100: 1 to 5

Business Opera1on Type

Fleet, self owned

Vehicle Types Medium Duty Trucks

Diesel $/Gal $3.80

Gal/year/Vehicle


$0.80

Funding Self funded

Maintenance Upgrades

Yes

!$3,000,000&

!$2,000,000&

!$1,000,000&

$0&

$1,000,000&

$2,000,000&

$3,000,000&

$4,000,000&

$5,000,000&

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ve&Discoun

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,&US&$&



&CNG:&20&Refuse&Trucks&&




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21%$

!"!!!!

!500!!

!1,000!!

!1,500!!

!2,000!!

!2,500!!

!CNG:!20!Refuse!Trucks!!




%!Im

provem

ent!

Tons!Per!Year!R

educCo

n!CO

2!

GHG!Change!!

Beler payback with more vehicles and improvement in Greenhouse Gases (GHG)

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$0&

$5,000,000&

$10,000,000&

$15,000,000&

$20,000,000&

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&CNG&3rd&Party:&50&Refuse&Trucks&&


&CNG&3rdParty:&100&Refuse&Trucks&&

Vehicle purchase intervals

•  Top: all purchasing in 1st year

•  Bolom: spread out over

mul1ple years

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ITEM VALUE

Scenario Name Incen1ves

Variable(s) Infra and AVF incen1ves

Fixed Parameters Vehicle daily usage, and Quan11es

Alt Fuel(s) CNG


50: 1 to 2, all cases

Vehicle Type Heavy Duty Trucks

Diesel $/Gal $3.80


$0.80

Funding Self funded


Yes

!$2,000,000&

!$1,000,000&

$0&

$1,000,000&

$2,000,000&

$3,000,000&

$4,000,000&

$5,000,000&

0& &1&& &2&& &3&& &4&& &5&&

Cumula0

ve&Discoun

ted&&Cash&Flow

,&US&$&

Years&ACer&Ini0al&Opera0on&

Cumula0ve&Discounted&Cash&Flow,&including&Vehicles&&&Infrastructure&First&Five&Years&

&CNG,&No&Incen0ve&&

&CNG,&Infra&30%&Incen0ve&&

&CNG,&Infra&30%&Incen0ve,&AFV&Incen0ve&&

&CNG,&Infra&50%&Incen0ve,&AFV&Incenitve&&

Same number of vehicles & fuel: incen1ve influence varies based on vehicle and/or infra

incen1ve and the % of incen1ves

ITEM VALUE

Scenario Name AFV Types

Variable(s) AF

Fixed Parameters Vehicle daily usage, Quan11es

Alt Fuel(s) CNG, LNG, PA, E85


100: all


Diesel $/Gal $3.80


Varies by Fuel Type

Funding Self funded


Yes

!$20,000,000&

!$10,000,000&

$0&

$10,000,000&

$20,000,000&

$30,000,000&

$40,000,000&

$50,000,000&

0& &1&& &2&& &3&& &4&& &5&& &6&& &7&& &8&& &9&& &10&&&11&&&12&&&13&&&14&&&15&&&16&&&17&&&18&&&19&&&20&&

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ve&Discoun

ted&Ca

sh&Flow,&$US&


Cumula4ve&Discounted&Cash&Flow&Including&Infrastructure&&&Vehicle&Investments:&&First&20&Year&Periodd&&&&&&

&100&CNG&AFV&&

&100&LNG&AFV&&

&100&PA&AFV&&

&100&E85&AFV&&

0%#

5%#

10%#

15%#

20%#

25%#

!"!!!!

!500!!

!1,000!!

!1,500!!

!2,000!!

!2,500!!

!3,000!!

!100!CNG!AFV!! !100!LNG!AFV!! !100!PA!AFV!! !100!E85!AFV!!

%!Im

provem

ent!

Tons!Per!Year!R

educEo

n!CO

2!

GHG!Change!!

Impact of GHG depends on Alt Fuel Type

Economics vary widely depending on inputs for alt fuel costs

ITEM VALUE

Scenario Name Incen1ves

Variable(s) Discount Rate (DR): 0% to 10%

Fixed Parameters Vehicle daily usage, Quan11es

Alt Fuel(s) CNG


50:1 to 2, all

Vehicle Type HDT

Diesel $/Gal $3.80

Gasoline $/Gal


$0.80

Funding Self funded


Yes !$4,000,000&

!$2,000,000&

$0&

$2,000,000&

$4,000,000&

$6,000,000&

$8,000,000&

$10,000,000&

$12,000,000&

$14,000,000&

0& &1&& &2&& &3&& &4&& &5&& &6&& &7&& &8&& &9&& &10&&

Cumula4

ve&Discoun

ted&&Cash&Flow

,&US&$&



&DR&=&0&& &DR&=&4%&&

&DR&=&6%&& &DR&=&10%&&

Time Value of Money (Discount Rate) plays significant role over 1me, all other things being equal Discount Rate @ 0% = Simple Payback

ITEM VALUE

Scenario Name Retail Revenue

Variable(s) Fuel Usage, Daily Vehicle Fueling Quan11es

Fixed Parameters Investment costs

Alt Fuel(s) CNG

Vehicle Qtys/Day: Retail 1=25, Retail 2 = 50, Retail 3 = 100, Retail 4 = 200


Margins: 30-‐35%


$0.80

Funding Self funded

!$2,000,000&

!$1,000,000&

$0&

$1,000,000&

$2,000,000&

$3,000,000&

$4,000,000&

$5,000,000&

0& &1&& &2&& &3&& &4&& &5&& &6&& &7&& &8&& &9&& &10&&

Cumula4

ve&Discoun

ted&&Cash&Flow

,&US&$&



&Retail&1&& &Retail&2&&

&Retail&3&& &Retail&4&&

More vehicles (same daily consump1on) = faster payback, beler ROI (slope) and long term NPV

ITEM VALUE

Scenario Name Financing

Variable(s) Fuel Usage, Model Type

Fixed Parameters Vehicle daily usage, qty.

Alt Fuel(s) CNG

Vehicle Qtys: 50: all case

Vehicle Type HDT

Margins: 30-‐35%


$0.80

Funding Self funded

Maintenance Upgrades Yes

Financing Terms 3 yr, 6% APR

Lease Terms 3 yr, 5.6% APR !$2,000,000&

!$1,500,000&

!$1,000,000&

!$500,000&

$0&

$500,000&

$1,000,000&

$1,500,000&

$2,000,000&

$2,500,000&

0& &1&& &2&& &3&& &4&& &5&&Cu

mula0

ve&Discoun

ted&&Cash&Flow

,&US&$&

Years&ACer&Ini0al&Opera0on&

Cumula0ve&Discounted&Cash&Flow,&including&Vehicles&&&Infrastructure&First&Five&Years&

&100%&self&fund&&

&50:50&Self/Financed&&

&100%&Self&Financed&&

&Infra&Self&funded,&Vehicles&Leased&&

The degree of borrowing influences ROI

•  Green Ways 2Go will be pleased to complete an investment model for your fleet or retail facility.

•  First evalua/on is free – up to four variables –  Alt fuel types –  Roll-‐out schedules – number and types of vehicles – how many, which ones and when

–  Vehicles only, using 3rd party alt fueling vs. purchasing own infrastructure

–  Retail business ROI with variable margins –  Self-‐funded vs. financed –  Impact of incen1ves –  Etc.

•  Contact Green Ways 2Go to start the process

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