AHP Solutions/Expertise
Techno-Economic Analyses (TEA)
Robust Decision Support for Investors, Financiers and Project Sponsors
Techno-economic analyses (TEA) are a core instrument used by AHP to assess the economic viability, risk profile and bankability of complex projects and technologies.
When TEA is appropriate
A TEA is particularly applied when:
- new or innovative technologies are to be assessed
- investment or financing decisions are being prepared
- multiple technical or organisational options need to be compared
- risks, uncertainties and market developments must be systematically analysed
- Preparing for funding, investor, or bank discussions
AHP approach: model-based economic assessment
At the core of each AHP TEA is a comprehensive, dynamic financial model representing a virtual project or asset company (Special Purpose Vehicle, SPV).
This SPV realistically reflects:
- capital and operating expenditures
- revenue structures
- financing models
- tax frameworks
- time-dependent developments over the entire project life cycle
The modelling is performed on an annual basis and evaluated using discounted cash flow (DCF) methodology
When TEA is appropriate
A TEA is particularly applied when:
- new or innovative technologies are to be assessed
- investment or financing decisions are being prepared
- multiple technical or organisational options need to be compared
- risks, uncertainties and market developments must be systematically analysed
- Preparing for funding, investor, or bank discussions
AHP approach: model-based economic assessment
At the core of each AHP TEA is a comprehensive, dynamic financial model representing a virtual project or asset company (Special Purpose Vehicle, SPV).
This SPV realistically reflects:
- capital and operating expenditures
- revenue structures
- financing models
- tax frameworks
- time-dependent developments over the entire project life cycle
The modelling is performed on an annual basis and evaluated using discounted cash flow (DCF) methodology
Key outcomes of a TEA
Depending on the project requirements, an AHP TEA provides, among other things:
- net present value (NPV)
- internal rate of return (IRR)
- payback period
- cash flow profiles
- Liquidity ratios
- minimum selling prices (MSP)
- sensitivities of key influencing parameters
These indicators form the basis for investment, financing and funding decisions.
Option, sensitivity and risk analysis
A key feature of the AHP TEA is the systematic treatment of uncertainty:
- variation analyses of technical, economic and organisational parameters
- scenario comparisons (e.g., price, capacity, and technology paths)
- Monte Carlo simulations for quantitative risk assessment
This approach yields not only point estimates but also probability distributions of key output metrics, offering a significant advantage in discussion with banks and investors.
Typical fields of application
AHP applies TEA, among others, to:
- energy and infrastructure projects
- Power-to-X, hydrogen, and biorefinery projects
- innovative materials and production processes
- photovoltaic and storage solutions
- industrial decarbonization projects
- research and demonstration projects (national & international)
Option, sensitivity and risk analysis
A key feature of the AHP TEA is the systematic treatment of uncertainty:
- variation analyses of technical, economic and organisational parameters
- scenario comparisons (e.g., price, capacity, and technology paths)
- Monte Carlo simulations for quantitative risk assessment
This approach yields not only point estimates but also probability distributions of key output metrics, offering a significant advantage in discussion with banks and investors.
Typical fields of application
AHP applies TEA, among others, to:
- energy and infrastructure projects
- Power-to-X, hydrogen, and biorefinery projects
- innovative materials and production processes
- photovoltaic and storage solutions
- industrial decarbonization projects
- research and demonstration projects (national & international)
Outcome: decision and financing certainty
The outcome of an AHP TEA is not a theoretical report but a robust decision base that:
- convinces investors
- meets bank requirements
- reflects funding logic
- makes risks transparent
- enables objective comparison of options
Next steps
We would be pleased to discuss with you:
- objectives and decision requirements
- required model depth
- integration of LCA and risk analyses
- transition into business planning, financing or funding applications