Prva stran - WBC-INCO Net

THE FINANCIAL FEASIBILITY FOR THE SWH
Pre-tax IRR and ROI % 8.7
After-tax IRR and ROI % 8.7
Simple Payback yr 13.8
Year-to-positive cash flow yr 12.1
Net Present Value - NPV € 667
Annual Life Cycle
Savings
€ 59
Benefit-Cost (B-C) ratio / 1.07
Since the main economic indicators are depending on
many systems’ characteristics, such as the renewable energy
delivered, initial costs and avoided cost of heating energy it
is useful to perform a sensitivity analysis which will give
valuable information about the project viability under
different conditions. In Table IX and X, we give the results
of the sensitivity analysis on the internal rate of return. The
gray cells in the table are indicating an unviable project for a
threshold for IRR of 7.4 %.
TABLE IX.
IRR SENSITIVITY ANALYSIS ON THE RENEWABLE ENERGY DELIVERED
Renewable
energy
delivered
Avoided cost of heating energy
(€/litter)
0.56 0.63 0.70 0.77 0.84
(MWh) -20% -10% 0% 10% 20%
6.49 -20% 4.3% 5.4% 6.4% 7.4% 8.3%
7.30 -10% 5.4% 6.5% 7.6% 8.6% 9.6%
8.12 0% 6.4% 7.6% 8.7% 9.8% 10.8%
8.93 10% 7.4% 8.6% 9.8% 10.9% 12.0%
9.74 20% 8.3% 9.6% 10.8% 12.0% 13.1%
Initial
costs
(€)
TABLE X.
IRR SENSITIVITY ANALYSIS ON THE INITIAL COSTS
Avoided cost of heating energy
(€/kWh)
0.5600 0.6300 0.7000 0.7700 0.8400
-20% -10% 0% 10% 20%
7,89 -20% 8.8% 10.2% 11.5% 12.8% 14.0%
8,88 -10% 7.5% 8.8% 10.0% 11.1% 12.2%
9,87 0% 6.4% 7.6% 8.7% 9.8% 10.8%
10,85 10% 5.5% 6.6% 7.7% 8.7% 9.6%
11,84 20% 4.7% 5.8% 6.8% 7.8% 8.7%
From the above tables, one can see that the project may
not be attractive only in cases when the avoided costs of
diesel oil are low in a combination with low renewable
energy output and/or high initial costs. Bearing in mind the
climate conditions in Macedonia, the level of the energy
output will not be the main limiting barrier and even smaller
barrier would be the price of diesel oil which is now pretty
high and comparable to the European level prices. So that,
we may conclude that the only uncertain parameter which
may affect the IRR index is the initial cost.
Fig. 2. Cumulative cash flows for the hot-water solar system
E. Environmental Evaluation
The RETScreen CO2-eq emission factor for the diesel oil
is 0.336 t CO2/MWh, which is taken from the revised IPCC
Guidelines for National Greenhouse Gas Inventories. By a
multiplication of the renewable energy delivered (8.12
MWh) and the CO2-eq emission factor (0.336 t/MWh), we
get that the large hot-water solar system saves 2.73 tones
CO2-eq emissions annually.
TABLE XI.
GHG REDUCTION
Average GHG reduction t CO2/yr 2.48
Renewable energy delivered MWh/yr 8.12
GHG emission reduction cost €/tCO2 -24
III. CONCLUSION
The economic indicators for large hot-water systems are
attractive since in this case the avoided costs of heating
energy (diesel oil) are pretty high. But even in this case, the
payback period is longer then 10 years mainly due high
investment costs and no grants.
The sensitivity analysis for this case has shown that any
variation in the renewable energy delivered, initial costs and
avoided cost of heating energy by a ±20% will not change
the economic indicators in such a manner that the project
may become unviable if it was viable before.
On the other hand, such system is a win-win measure for
GHG abatement, since the emission reduction costs are
negative meaning that the project saves certain amount of
emissions, saving at a same time considerable fuel costs.
In addition, this project will greatly improve the quality
of life at the location and will contribute to a much better
cheese production process. This in turn will produce higher
incomes and better social situation in the region.
IV. REFERENCES
[1] P. Georgilakis, N. Hatziargyriou “Survey of the state-of-the-art of
decision support systems for renewable energy sources in isolated
region”, Input to Deliverable D3.1, RISE
[2] RETScreen Software, 2000. Government of Canada, Natural
Resources Canada’s CANMENT Energy Diversification Research
Laboratory (CEDRL). Available at http://retscreen .gc.ca
[3] RETScreen International Renewable Energy Decision Support Centre,
Solar Water Heating Project Model, Version 3. Available at
http://www.retscreen .net.
[4] Mr. Andreas Kamarinopoulos (ICCS/NTUA) “Report on target
locations in the WB countries together with load identification,
environmental, economic and social aspects of each location”,
Deliverable D1.7R.
4