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Networks and utilities

District heating and cooling network financial model, built free.

A three-statement Excel model for a district heating and cooling network, built from your own figures and checked to balance.

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  • Usually ready within the hour

We use generative AI in parts of our process, so mistakes can occur. Every model should be checked by a person before it is relied on. Read more

The business

Produces heat or chilled water in central plants (boilers, heat pumps, combined heat and power, chillers) and distributes it through pipe networks to connected buildings under long-term contracts or regulated tariffs, charging for connected capacity and energy delivered.

See the sampleHow the model works

In short

  • 01

    Three linked statements

    Income statement, balance sheet and cash flow, linked in every period.

  • 02

    Valued and tested

    Discounted cash flow, with scenarios on the key drivers.

  • 03

    Monthly to annual

    Monthly, quarterly, half-yearly or annual periods, for up to 30 years.

  • 04

    Checked every period

    A Checks sheet shows the balance sheet balances and the cash reconciles.

The sample

The sample, as Excel draws it.

Built by the same system and checks as yours: its structure and its inputs, ready for your own figures.

Annual · 10 years · Low detail
District heating and cooling network sample model.xlsx
The How It Works sheet of the sample district heating and cooling network model

The sample describes no real business. Yours is calibrated to your own figures, so its results are your business’s.

How it works

How the model works for a district heating and cooling network.

  1. How it earns revenue3 formulas
    Regulatory assets and liabilities · All network assets
    Closing deferred fuel balanceOpening deferred fuel balanceCosts deferred (under-recovery less over-recovery)Carrying charge accruedTrue-up surcharge (refund) recovering the balance
    Regulatory assets and liabilities · All network assets
    Fuel and purchased-energy recoveries billedFuel cost recovered through the factor in ratesTrue-up surcharge (refund) recovering the balance
    Regulatory assets and liabilities · All network assets
    Fuel and purchased-energy costs (actual, less deferral, plus amortisation)Actual fuel and purchased-energy costsCosts deferred (under-recovery less over-recovery)True-up surcharge (refund) recovering the balance
  2. What drives its costs1 formula
    Network operating costs · All network assets
    Network operating costsCustomer-driven costsNetwork length-driven costs
  3. What it invests in3 formulas
    Capital programme and statutory depreciation · All network assets
    Network capexCapex allowance (nominal)Delivery of the capex allowance
    Capital programme and statutory depreciation · All network assets
    Network depreciationDepreciation of the opening asset baseDepreciation of new capex (half-year convention)
    Capital programme and statutory depreciation · All network assets
    Closing net book valueOpening net book valueNetwork capexNetwork depreciation
  4. How it is funded3 formulas
    Debt
    RepaymentsScheduled repaymentsPrepayments from an equity raise and the cash sweep
    Debt
    Closing balanceOpening balanceDrawdownsRepayments
    Debt
    Interest expenseOpening balanceAll-in interest rateshare of the year
  5. How profit becomes cash3 formulas
    Working capital
    Trade receivablesRevenuefrom statementsDebtor daysDays in period
    Working capital
    InventoryDirect costs (positive)from statementsInventory daysDays in period
    Working capital
    Trade payablesCash operating costs (positive)from statementsCreditor daysDays in period
What it covers

20 parts, each one tested.

Every part is a tested building block with its own checks: yours is put together from the ones your business needs.

  • CPI forecastConsensus curve with long-run anchor
  • Corporate costsFixed cost base indexed to CPI
  • Working capitalFull working capital
  • Income taxCorporate rate with tax losses
  • DebtAmortising term loan
  • Dividends and distributionsPayout of net profit
  • Discounted cash flow valuationDCF on free cash flow to the firm
  • Wholesale electricity price curveAdviser price curveThe wholesale electricity price forecast used by the revenue and cost parts that need it.
  • Decommissioning and restoration provisionsPresent value with accretionProvisions to remove generation assets, abandon wells and restore sites — recognition, unwinding and spend.
  • Energy and utility KPIsRegulated network metricsThe ratios investors and lenders use to judge energy and utility businesses.
  • Interest-rate hedgingHedged share at a fixed rate
  • Key-metric summaryLast-twelve-month and run-rate metrics
  • Covenant tests and headroomLVR, gearing and ICR for property
  • Discount rate (WACC)CAPM at target gearing
  • Interest-rate forecastMarket forward curve
  • Regulatory assets and liabilitiesDeferred fuel and purchased-power balanceBalances owed to or by customers under regulation — revenue unders and overs, deferred fuel and purchased-power costs, securitised costs — and their recovery through future tariffs.
  • Regulated asset baseCPI-indexed roll-forwardRoll-forward of the regulated asset base that sets allowed returns — capex in, regulatory depreciation out, indexation.
  • Network revenueContracted firm capacityRegulated or contracted revenue earned by the network, including incentive outcomes and unders and overs.
  • Network operating costsPer customer and per kmOperating and maintenance costs of the network, including bulk water purchases for water utilities.
  • Capital programme and statutory depreciationCapex allowance, straight-lineNetwork capex (replacement, augmentation, connections) net of contributions, and statutory depreciation of the network's plant.
Key numbers

The numbers it tracks.

  1. 01connected load (MWth)
  2. 02heat or cooling sold (MWh)
  3. 03capacity and energy tariffs
  4. 04production cost per MWh
  5. 05connections
  6. 06EBITDA margin
Used for

What it is used for.

Also used for
  • Scenarios and sensitivities
  • Asset acquisition
Related models

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Every energy and utilities model

Looking for a district heating and cooling network financial model template? Ours arrives built for your business, with your figures in it.

See a finished model, sheet by sheet

The sample is built on illustrative figures and describes no real business. Models are calculations prepared from the information you provide. They are not financial advice and must be independently verified. See our terms.