Green Energy Indicates Essay

Pages: 4 (1220 words)  ·  Bibliography Sources: 4  ·  File: .docx  ·  Level: College Senior  ·  Topic: Energy

China has huge geothermal resources. Recently 49.17 billion cubic meters of underground hot water resources have been identified in the central eastern china. In comparison to other green energy geothermal resources are safe, and stable. Geothermal energy emanates from inside the earth. Every day the earth's core radiates energy which is equivalent to 100 billion barrels of oil. Current exploitation of china in geothermal energy is 500 million cubic meters. Though over the past years geothermal did not receive much focus because of extensive concentration on solar, wind and nuclear energy. But recently geothermal energy has bee given special attention and this sector is growing at the rate of 10% per year.

Investable project in china

There is a potential investable project of Hebie Shangyi Chaoligai 49.5 MW wind Farm Project. The host party of this project is China.

Description of the project activity

This project is located in Chaoligi Village, Shangyi country, Zhangjiakou City, Hebie Province. The proposed project is undertaken by Shangyi Country Chahaer Wind Power CO. Ltd. Based on the condition of the project site, this project is to install and operate 33 wind turbines, with capacity of 1500KW each. That means the total install capacity of the potential project is 49.5 MW. It is estimated that it will generate 117,018 MWh each year. This outcome will be sold to the North China Power Grind (NCPG) (Jeffs, 2010).

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Comparable capacity or electricity generation addition provided by the NCPG, is dominated by the thermal power generation. This potential project will reduce of CO2 by the amount of approximately 104,836 tones per year. Following table represents the participants of the project:

Relevant Indicators for financial assessment

Essay on Green Energy Indicates This Kind Assignment

For the proposed project total install capacity will be 49.5MW. Net supplied power to the grid would be 117.018MWh. Static investment is estimated to be 440.43 million Yuan RMB. Estimated Equity would be 88 million Yuan RMB and annual O&M is expected to be 13.77 million Yuan RMB. Free cash flow would be 1.49 million Yuan RMB. The life time of the operation is expected to be 20 years and depreciation ratio is estimated to be 6.47%. The depreciation term is considered to be 15 years. Expected operational lifetime of this project would be 20 years. Interest rate on long-term loan would be 5.94%. Feed- in tariff including VAT is 0.54 RMB/kWh. Value added Tax rate is 8.5% and additional tax rate is expected to be 8%. Income tax rate is 25%. Assumed CER price is 10.5€/tCO2e (Stewart and Ehrbar, 1998, Jeffs, 2010).

A sensitivity analysis can be helpful to asses the financial uncertainty by identifying the cost associated with the project such as capital investment, costs, prices etc., and considering the changes of this cost.

For a wind farm project the factors that influences the IRR of total investment arises mainly from:-

Static total investment

Annual O&M cost

Cost associated with electricity generations,

Feed-in tariff.

The following graph is taken from online sources which have show the sensitivity analysis of the proposed project by considering the 10% deviation of the cost parameters


As a growing market for the green energy industry in china it is expected that investor can invest in china. It will help the investors to make profit as well as to contribute in the global environment. It is recommended that before investing in green energy sector, investor must analyze the overall market and proposed project more details. More importantly investors must take a closer look on the competitive environment and the feasibility of the proposed project.


Jeffs, R (2010) Green Energy: Sustainable Electrical Supply with Low Environmental Impact. New York. CRC Press.

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How to Cite "Green Energy Indicates" Essay in a Bibliography:

APA Style

Green Energy Indicates.  (2012, July 21).  Retrieved May 30, 2020, from

MLA Format

"Green Energy Indicates."  21 July 2012.  Web.  30 May 2020. <>.

Chicago Style

"Green Energy Indicates."  July 21, 2012.  Accessed May 30, 2020.