Example of Sensitivity Analysis of a Wind Farm Project Cash flow model

What is a Sensitivity Test/Analysis of a Cashflow

Sensitivity analysis determines how different values of an independent variable affect a particular dependent variable under a given set of assumptions. In other words, sensitivity analyses study how various sources of uncertainty in a mathematical model contribute to the model's overall uncertainty. This technique is used within specific boundaries that depend on one or more input variables.

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from Investopedia

Sensitivity Test considered Parameters

The sensitivity test of nine variables as stated in Table 1 was carried out with a minimum and maximum outcome assessed. As indicated in the results in Table 2, the feasibility of cash flow variables of Equity IRR (leveraged), Project IRR (unleveraged), and minimum DSCR was assessed for the bankability and viability of the onshore wind farm proposed investment. Furthermore, the results are illustrated below in Figure 2, Figure 3, and Figure 4.

Sensitivity Test Parameters Considered

No.	Variables	Variation
1	Operating & Maintenance	(+/-20%)
2	Operating & Maintenance	(+/-10%)
3	PPA purchase rate	(45&60 EUR/MWh)
4	Interest Rate Increase	(+/-1.5%)
5