Chapter 14 · Day 14 — Hydropower
Analysing a hydropower company
A hydro company is one asset with a long debt schedule and a fixed-price contract. Per-MW metrics tell you more than margins.
15 of 30 · 15 min
Hydropower (जलविद्युत) is the sector where standard ratios mislead most. Before commissioning there is no revenue and large debt; after commissioning revenue is largely fixed by contract. The right metrics are per-MW and per-project.
A hydropower project, start to dividend
| Metric | Formula | Reads |
|---|---|---|
| Revenue per MW | Annual revenue ÷ Installed MW | Output efficiency and PPA rate |
| Profit per MW | Net profit ÷ Installed MW | Economics after debt |
| Cost per MW | Total project cost ÷ Installed MW | Whether it was built efficiently |
| Debt per MW | Project debt ÷ Installed MW | Leverage on the asset |
| CUF | Actual generation ÷ Maximum possible × 100 | How hard the plant runs |
| DSCR | Cash available for debt service ÷ Debt service | Can it pay the bank? |
Worked — Illustrative Example
A 25 MW run-of-river plant. Annual generation 131.4 GWh. Total project cost Rs 4,50,00,00,000. Project debt Rs 3,15,00,00,000. Annual revenue Rs 96,00,00,000. Net profit Rs 18,00,00,000.
- Cost/MW = 450 crore ÷ 25 = Rs 18 crore per MW
- Debt/MW = 315 crore ÷ 25 = Rs 12.6 crore per MW
- Revenue/MW = 96 crore ÷ 25 = Rs 3.84 crore per MW
- Profit/MW = 18 crore ÷ 25 = Rs 0.72 crore per MW
- Maximum possible generation = 25 MW × 8,760 h = 219 GWh
- CUF = 131.4 ÷ 219 × 100 = 60%
The contract terms that decide the economics
- PPA rate — the price per unit, usually with separate dry and wet season rates.
- PPA tenure and the remaining concession period — how many years of contracted revenue remain.
- COD (commercial operation date) — before it, there is no revenue at all.
- Escalation — whether the rate rises over time, and by how much.
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