part 1: overview of cogeneration and its status in asia - Fire

116 Part3: Summary of country studies – Bangladesh and Viet Nam
Changes in Escalation Rate of Electricity Price
IRR
35%
30%
25%
20%
15%
IRR vs. Escalation Rate of
Electricity Price
IRR(STTM)
IRR(REPM)
6% 8% 10% 12%
Escalation Rate of Electricity Price
Figure 2.7 Sensitivity of IRR to changes in electricity price escalation rate
From the sensitivity analysis results shown in Figure 2.7, it can be concluded that with higher
escalation rate of electricity purchase price, higher internal rate of return of the cogeneration
system can be achieved. This is mainly due to the increasing revenues generated from the
displaced electricity and from the sale of excess electricity.
2.6 Conclusion
From the techno-economic evaluation and sensitivity analysis of the potential cogeneration
alternatives of the paper factory, the steam turbine option meeting steam demand of 5,000
kg/hr with superheated steam of 40 bar is found to be the most suitable cogeneration
system. It represents an initial investment of 12.2 million Pesos, and leads to an internal rate
of return of 24.3 per cent.
[Reference: Techno-economic evaluation of cogeneration potential in two manufacturing
plants in the Philippines. AIT RSPR No. ET-89-6]