In this article, you will learn how you can limit sales and operating expenditures to a specific amount by means of Caps and Floors.
This example is based on a limitation of Caps and Floors of an Opex item. The process is analogous for sales.
- To define caps and floors for an Opex, click on the desired item in the "Opex" section.
- In a next step, you can click on "Floor" in the input field Bounds to insert a floor (minimum value) and / or "Cap" to limit the operating costs with a cap (maximum value).
- A new input field appears where you can choose the driver: "Fix per Production Unit" per "Production" or an amount per "Power" installed.
Note: The comparison takes place on a monthly basis. For example, if a minimum value of "Fix per production unit" is set at EUR 100'000 per year, the minimum value is EUR 8'333.33 per month.
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The defined cap or floor can be indexed. Learn more on indexation here.
- Example: We model production-dependent lease costs (10 EUR / MWh) which are indexed (2%) and limited by a fixed cap of 100'000 EUR/a.
The profit and loss account shows that the costs are rising, by taking into account inflation, until a maximum of 100,000 EUR/a (cap) is reached and the lease costs do not rise above the cap until the end.