Sensitivity Analysis & Risk Assessment
Parameter sensitivity, scenario modeling, and risk evaluation
Sensitivity Parameter Selection
RNG Cost/GJ Sensitivity to LCFS Credit Price
IRR Sensitivity to LCFS Credit Price
Scenario Comparison
NPV 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.