Unergy
  • ☀️Introduction
    • Abstract
    • Motivation
  • 🔃Protocol
    • Introduction
    • The uWatt: A stable currency collateralized in clean energy
      • uWatt reference value
    • Project origination
      • pWatt tokens
      • Project milestones
    • The Swap
      • Swapping pWatts into uWatts
      • External pWatt holders
      • Swap factor
      • pWatts ‘outside’ the Reserve
    • Energy tokenization and generation tracking
      • Tracking of energy monetization
      • Renewable Energy Certificates (RECs)
    • Management of funds in the Reserve
      • Collecting project income
      • Operation and maintenance expenses
      • Liquidity pool funding
      • Depreciation compensation
        • Asset value calculation
        • Asset depreciation compensation
        • Avoiding overcompensation
      • Distribution of rewards
  • 🗳️Governance
    • Overview
    • Choosing the cash flow discount rates
    • Protocol upgrades
    • Milestone validation
  • 💡Remarks
    • Types of projects
      • Self-consumption projects
      • Utility-scale solar energy Projects
    • Nature of the Unergy Protocol tokens
      • Nature of the uWatt token
      • Nature of the pWatt tokens
    • Incentives for funding Projects
  • 🚒Risks and mitigation
    • Origination risks
      • Delays in the construction or procurement phase
      • Failure to install the Project
    • Real-world funds management
    • Project qualification
      • Technical feasibility
      • Financial feasibility
    • Installer qualification
  • 📓Miscellaneous
    • Protocol implementation
    • Definitions and terminology
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  1. Protocol
  2. Management of funds in the Reserve
  3. Depreciation compensation

Asset value calculation

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Last updated 1 year ago

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The current value of an asset that is managed by the Reserve is defined as the Net Present Value of its expected future cash flow, discounted at an opportunity rate equivalent to the index plus the Project’s opportunity rate. The specific opportunity rate depends on the Project. As a general guideline, it is set to 6.0% for Utility-scale Projects (like Solar Farms), and 7.5% for self-consumption Projects, however, the precise value will depend on the risk assessment of every Project.

The opportunity rate that is set for every Project can be subject to community proposals through the Unergy Protocol governance system.

In order to calculate the value of an asset, an estimation of the energy price is needed. For a Solar Farm project that sells energy to the electricity Grid, a long-term energy price estimation should be made, since its value depends on the energy price in the spot market. For a Self-Consumption project, the price is agreed upon before the Project starts operation.

Financial model assumptions

In every country where the Reserve owns Projects, a consulting process with an independent third-party contractor with relevant experience in the local market will give a long-term estimation of the main macroeconomic assumptions used for the financial models. This estimation will be used to update the expected future cash flows of the Projects into the Reserve.

The consultancy results will be publicly accessible through the Unergy Platform, which then can be used by anyone to compare with the financial model of the Projects and assess their validity.

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Secured Overnight Financing Rate