GreenandgoldI looked at their website (RPG) and they put example of profitability.
PPA : 105$, Opex : 2.5mlns/MW, cash grant 30% of 90% of the cost of the project and cost 4$MM/MW give an IRR (internal Rate of Return) of 19%
for SJT we have PPA of 92$ and cost of 4.6$/MW (with the last cost overruns) /MW
so SJT has very low profitability (electricity price 12% lower than in the example, cost is 10% higher and we have no 30% cash grant).
I try to compute the IRR for SJT with those numbers I find out that the IRR is around 4% (which is very low). No wonder why the stock halve when we got the cost overruns coz it makes the project not that much economic.
As I said before if we got another cost overruns for SJT the project become uneconomic. So getting the certification is really key. Otherwise I am selling all my stocks.
On the other hand US project seems a lot more profitable (higher PPA, 30% cash grant...but the cost should be a bit higher maybe 5$/MW). Dont know why we did not focus first on US project ??? Do u know ???
For US project considering 5$/MW cost I got an IRR of around 15% which is not bad. Everything over 12% is considering good. But if we have costs overruns for US project, they will be a lot less profitable.
Cost overruns is the key for the economic of our projects. We should watch this.
I will have a surgery in few hours so cant answer for few days
Have a great weekend to all long
Julien