The recent investor update clarifies the matter. They have provided a business model calculation as follows. The example situation requires a good look, and is of course dependent on the ability to source the powerbox in quantity. However, given the economics there should be plenty of incentive for that.
Business Model
There has been some conjecture as to how many Opcon Powerboxes will be required in certain situations. The explanation below is a simplified version of the estimation method Enerji and CoGen ORC Power have been using for this purpose.
• As stated previously in some of our investor presentations, as a rule of thumb, when fossil fuel is burnt, one unit is converted to useful energy (or work) and two units are wasted.
• The Company assumes its waste heat recovery system operates at an efficiency of approximately 15%, which equates to generating about 30% of the power already generated.
• To calculate the number of Opcon Powerboxes required, we divide this number (expressed in MW) by 0.84 given that the production units will generate 0.84MW.
• The maximum amount of energy a production Opcon Powerbox will generate in a year is 7,358,400kWh. We arrive at this figure by multiplying the power capacity of the Powerbox, 840kW, by the number of hours in the day and by the number of days in the year = 840 x24 x 365. In practice it is expected that there will be some downtime for scheduled and unscheduled maintenance. Assuming a figure of 1% for this downtime (about 90 hours per year) the total energy generated by a single Opcon Powerbox is 7,284,816kWh per year.
• The revenue generated is then the total energy generated multiplied by the sale price of the electricity. This will likely range from as little as $0.08 per kWh in highly competitive green wholesale markets up to $0.28 per kWh for diesel fired power stations not connected to the grid.
• Revenue from a single Opcon Powerbox is then estimated to be between $582,785 and $2,039,750 per year.
• These figures equate to between $693,790 and $2,428,270 per MW per year.
• The capital cost is estimated at $2.5M per MW installed (note this figure is normalised to a per MW figure and is not the cost of individual Powerboxes).
If we take a real life example of a 35MW gas turbine;
• It is estimated there is 60MW of waste heat available from the exhaust gas.
• Approximately 15% of this can be converted to power by Enerji’s system or 9MW.
• This will require 10 or 11 Opcon Powerboxes
• A power station using 3 of these turbines to produce 105MW would require at least 30 Opcon Powerboxes.
The Company advises that the figures, methods and formulae quoted and cited above are simplified estimates only and do not include the more involved and rigorous treatment required in its business model or engineering design. Readers should not rely on these figures, methods and calculations for any other than illustrative purposes.
VPR Price at posting:
16.0¢ Sentiment: Buy Disclosure: Not Held
