Wind farm financial model: generation, costs and cash

A wind farm financial model turns supplied generation estimates, power prices, maintenance costs and financing payments into a monthly cash forecast. Start with billable electricity and finish with a closing cash balance that reconciles to the bank. Keep technical generation estimates separate from the arithmetic that converts them into financial results.

Start with the project records

Use one project-month as the reporting unit. Bring the approved generation workbook, meter export, power settlement statement, operating ledger, maintenance schedule, debt payment schedule and capital spending plan. Add a project identifier and period to each file before comparing totals.

Generation and capacity are different inputs. EIA distinguishes capacity from generation and explains that net generation excludes electricity used to operate the plant. A capacity figure alone cannot establish billable electricity. Tie the forecast quantity to the delivery and settlement basis in the project's contract.

Record whether a supplied estimate is already net of electrical losses, curtailment and operating consumption. Deducting those items again understates revenue. Project operations owns those assumptions; finance owns the connection from quantities to settlements, expenses and cash.

Maintain separate columns for approved plan, current forecast and actual results. The broader FP&A workflow explains how those comparisons support operating reviews. Preserve the original plan when someone updates the current forecast.

Lay out the monthly workbook

The following invented US project has a 30-day operating month. Its supplied generation estimates are already on the billable net basis. All revenue is collected and all listed expenses are paid during the month, with no receivable or payable movement. The figures are assumptions, not industry benchmarks.

Put labels in column A, plan in B and actual in C. These are the input rows:

Fixed cash costs include the expenses that do not move with this month's generation. Keep a supporting breakdown for staffing, insurance, land payments and contracted services so the total can be checked against the ledger.

For a starting business with pre-operation costs, use the separate startup financial model discussion. This workbook begins with an operating project and does not estimate an investment valuation.

Calculate revenue, costs and cash

Enter these spreadsheet formulas in column B and copy across to C:

B11 = B4*B5
B12 = B4*B6
B13 = B11-B12-B7
B14 = B13-B8-B9
B15 = B10+B14
B16 = B4/(B2*B3)

The cell references before each equals sign identify the destination cells. Format row 16 as a percentage; retain full precision in the workbook.

Revenue is 5,000 × 55 = $275,000 in plan and 4,500 × 55 = $247,500 in actuals. The operating cash subtotal is deliberately labeled rather than presented as accounting net income: this short example has no depreciation, taxes or accrual adjustments.

Row 16 returns 34.72% for plan and 31.25% for actuals, rounded to two decimal places. EIA defines capacity factor as energy produced divided by the energy possible at continuous full output. Here it is a reasonableness check on supplied generation, not an engineering forecast.

Explain the variance and prove the cash

Actual generation is 500 MWh below plan. At the unchanged price, that reduces revenue by $27,500. Variable maintenance falls by $3,000, leaving a $24,500 reduction in both the operating subtotal and cash after the scheduled payments.

The cash proof is direct:

Closing cash = 100,000 + 247,500 − 27,000 − 70,000 − 90,000 − 25,000 = 135,500 USD

The cash statement must agree with the bank reconciliation. Revenue must agree with settlements, and each expense total must tie to its supporting records. Differences belong in named reconciling rows with an owner, not in an unexplained balancing adjustment.

For a price-only variation, keep planned generation and costs unchanged but reduce price to $50 per MWh. Revenue becomes $250,000, the operating subtotal becomes $150,000, and cash after debt and capital spending becomes $35,000. That isolates price exposure from the generation shortfall.

In a live workbook, add customer collection timing, supplier payments and restricted reserve movements. The working capital guide explains why revenue and expense timing can differ from cash. Keep debt reserve transfers separate from unrestricted cash available to spend.

Where it goes wrong

• Gross generation priced as delivered electricity. Use the contract's billable quantity and show a bridge from technical estimates when the bases differ.
• Annual averages hiding outages. Put planned maintenance in the month it affects output and cash; do not spread every payment evenly.
• Debt service counted twice. Keep principal, interest and reserve transfers identifiable when reconciling the payment schedule.
• Unsupported income assumptions. Keep credits, incentives and other income outside the base case until finance supplies an approved amount and payment date.

Compare your wind project workbook in Covirage

Bring your generation assumptions, settlement export and cost workbook to Covirage as a file or Google Sheet. Covirage maps the columns, its tools compute and check the supplied figures, and the external AI model explains the differences with every figure traced to its rows. Create a free Covirage account, then set up your business and bring a sample of your own data.

See forecast analysis for the supporting workflow.