Sensitivity Analysis & Risk Assessment
Parameter sensitivity, scenario modeling, and risk evaluation
Global Analysis Controls
CNG Liquefaction
Convert pipeline RNG to LNG for transport
Government Subsidies
Federal 45Z credit, LCFS, RINs
Sensitivity Parameter Selection
RNG Cost/GJ Sensitivity to LCFS Credit Price
IRR Sensitivity to LCFS Credit Price
Scenario Comparison
Jet Fuel Equivalent Price Distribution (Monte Carlo)
Risk Assessment Matrix
| Risk Factor | Impact | Probability | Mitigation Strategy |
|---|---|---|---|
| LCFS Price Volatility | High | Medium | Long-term contracts, price hedging |
| Regulatory Changes | High | Low | Policy monitoring, flexible design |
| Technology Performance | Medium | Low | Proven technology, performance guarantees |
| Feedstock Availability | Medium | Medium | Multiple sources, supply agreements |
| Capital Cost Overruns | Medium | Medium | Fixed-price contracts, contingency |
Key Sensitivities
Most Sensitive Parameter:LCFS Credit Price
NPV Range (±30%):$15M - $75M
Break-even LCFS Price:$35/tCO₂e
Risk Level:Moderate
Scenario Probabilities
Conservative (NPV >$15M):85%
Base Case (NPV >$40M):65%
Optimistic (NPV >$70M):25%
Negative NPV Risk:5%
Investment Recommendation
Proceed with Investment
Strong fundamentals with robust returns across multiple scenarios. Key risks are manageable through proper contracting and hedging strategies.
Recommendation: Secure long-term LCFS credit pricing to minimize regulatory risk.