APPENDIX B – RENEWABLE ENERGY SYSTEM FEASIBILITY STUDY
Elements in an acceptable feasibility study include, but are not necessarily limited to, the following elements:
? Executive Summary
? Economic Feasibility
? Market Feasibility
? Technical Feasibility (including the appropriate
? Financial Feasibility
? Management Feasibility
As noted above, both a technical report for the project and an economic analysis of the project are
required as part of the feasibility study. The technical
report to be provided must conform to that required under 7
CFR part 4280, as applicable or, if the renewable energy
system is a hydropower project, under this notice. The
following paragraphs describe the contents that each of
section that the feasibility study must contain, as
Executive Summary. Provide an introduction and
overview of the project. In the overview, describe the
nature and scope of the proposed project, including purpose,
project location, design features, capacity, and estimated
total capital cost. Include a summary of each of the
elements of the feasibility study, including:
? Economic feasibility determinations
? Market feasibility determinations
? Technical feasibility determinations
? Financial feasibility determinations
? Management feasibility determinations
In addition, include a section on recommendations for
implementation of the proposed project.
Economic Feasibility. Provide information regarding
project site; the availability of trained or trainable
labor; and the availability of infrastructure, including
utilities, and rail, air and road service to the site.
Discuss feedstock source management, including feedstock
collection, pre-treatment, transportation, and storage, and
provide estimates of feedstock volumes and costs. Discuss
the proposed project’s potential impacts on existing
manufacturing plants or other facilities that use similar
feedstock if the proposed technology is adopted. Provide
projected impacts of the proposed project on resource
conservation, public health, and the environment. Provide
an overall economic impact of the project including any additional markets created (e.g., for agricultural and forestry products and agricultural waste material) and potential for rural economic development. Provide feasibility/plans of project to work with producer associations or cooperatives including estimated amount of annual feedstock and biofuel and byproduct dollars from producer associations and cooperatives.
Market Feasibility. Provide information on the sales
organization and management. Discuss the nature and extent of market and market area and provide marketing plans for sale of projected output, including both the principle products and the by-products. Discuss the extent of competition including other similar facilities in the market area. Provide projected total supply and projected competitive demand of raw materials. Describe the procurement plan, including projected procurement costs and the form of commitment of raw materials (marketing agreements, etc.). Identify commitments from customers or brokers for both the principle products and the by-products. Discuss all risks related to the industry, including industry status.
Technical Feasibility. The technical feasibility
report shall be based upon verifiable data and contain
sufficient information and analysis so that a determination may be made on the technical feasibility of achieving the levels of income or production that are projected in the financial statements. The Project engineer or architect is considered an independent party provided neither the principals of the firm nor any individual of the firm who participates in the technical feasibility report has a financial interest in the project. If no other individual or firm with the expertise necessary to make such a determination is reasonably available to perform the function, an individual or firm that is not independent may be used.
Identify any constraints or limitations in the
financial projections and any other facility or design-related factors that might affect the success of the enterprise. Identify and estimate project operation and development costs and specify the level of accuracy of these estimates and the assumptions on which these estimates have been based.
Discuss all risks related to construction of the
project and regulation and governmental action as they affect the technical feasibility of the project.
Financial Feasibility. Discuss the reliability of the
financial projections and assumptions on which the
financial statements are based including all sources of project capital both private and public, such as Federal funds. Provide three years (minimum) projected Balance Sheets and Income Statements and cash flow projections for the life of the project. Discuss the ability of the business to achieve the projected income and cash flow. Provide an assessment of the cost accounting system. Discuss the availability of short-term credit or other means to meet seasonable business costs and the adequacy of raw materials and supplies. Provide a sensitivity analysis, including feedstock and energy costs. Discuss all risks related to the project, borrower financing plan, the operational units, and tax issues.
Management Feasibility. Discuss the continuity and
adequacy of management. Identify borrower and/or management’s previous experience concerning the receipt of federal financial assistance, including amount of funding, date received, purpose, and outcome. Discuss all risks related to the borrower as a company (e.g., borrower is at the Development-Stage) and conflicts of interest, including appearances of conflicts of interest.
Qualifications Provide a resume or statement of
qualifications of the author of the feasibility study, including prior experience.