12th International Symposium on District Heating and Cooling

academic access is facilitated as there is no need toreveal sensitive information.Table III. Assumptions made for non-site idiosyncratic inputand output prices (€/MWh).Ethanol 78 Biomass 19FT-diesel 78 Fuel oil 57Kersone 78 Pellets 25Nafta 52 Electricity 47Biooil 47 Electricity excise 0.5Biogas 68 Electricity certificate 1 211 Premium paid to producers of renewable electricity.Cash flowsThe initial outlay is assumed to take place in full at year0. Yearly operational cash flows are projected by firstestimating an operational cash flow for the first year. Ascash flows are the products of price and quantity, thisestimation is based on the technical analysis in order toobtain energy flow estimates (see Table I), and thenmultiply them with price estimates, to which we addout-payments for operation and maintenance. Weextrapolate this operational cash flow over the 20 yearlong investment horizon with a three percent yearlygrowth rate (adjusted for the fact that green certificatesare obtained for fifteen years only). All cash flows areconservatively assumed to occur at the end of eachyear. Next, we add tax payments (assuming aneffective tax rate of 26,3%), tax discounts fromdepreciation (according to Swedish tax code), changesin working capital (approximated by dividing thedifference between in-payments and out-payments ofyear t by 12 and subtracting the corresponding valuefrom year t-1, save for the last year where thedifference is set to zero) and a terminal value (5% ofthe initial outlay). Initial outlays are determined byconsulting [7]– [19]. Our price assumptions for non-siteidiosyncratic inputs and outputs are presented inTable III. For translation between different currenciesthe following exchange rates were used: 9.6 SEK/€ and6.5SEK/USD.Sensitivity analysisWe then control the robustness of the NPV estimatesthrough sensitivity analysis; that is, we examine howthe cost-/benefit analysis is affected when changing avariable at the time, holding all else equal. We do thisin two steps for each system. First, we illustrate thechanges in estimated NPV by changing yearly inpayments,yearly out-payments, initial outlay andterminal value respectively. Second, we show howyearly in-payments and out-payments respond to pricechanges.By this sensitivity analysis, we can to some degreecompensate for the uncertainty that surrounds ourestimates of initial outlays and terminal value, and weThe <strong>12th</strong> <strong>International</strong> <strong>Symposium</strong> on District Heating and Cooling,September 5 th to September 7 th , 2010, Tallinn, Estonia147can see for what potential price changes extra concernis warranted. Certainly, a drawback with the sensitivityanalysis is that it is just a ceteris paribus analysis anddoes not take into consideration the potentialcovariance of variables, for instance between ingoingbiomass and outgoing biofuel.Business context evaluationThe environmental and economic analyses of a jointproduction operation act as a starting point for thebusiness context analysis. A wide-spread adoptiondemands not only indications of environmental benefitsand economic profits, but must also offer a fit with theexisting business context. Even though the degree of fitis defined on company level we will not analyze it assuch. Rather we use the business context of thestudied systems in order to put together a compilationof restrictions and barriers to a wide-spread adoption.The magnitude and importance of these will giveimportant indications of the short term possibilities ofrealizing environmental benefits and economic profitsin making bioenergy combines a future growth industry.The restrictions and barriers are identified through thefit with existing input/output market situation, productionand system configuration and general businessconditions, (i.e. strategic focus and capacity to absorbadditional risk) dominant in the host company.ENVIRONMENTAL BENEFITSAs already stated in the Research design, theenvironmental benefit from integrating bioenergyproduction into an existing district heating system isassessed as the reduction of GHG‘s from a systemperspective. As also explained, the net differencedepends on the reference case as well as thecomposition of the energy combine. In Figure 2, theGHG reduction for the included parts of the referencecase and energy combine case of System 3 isdisplayed. In the reference case (left bar in Figure 2)– a combined heat and power (CHP) plant – biomass isconverted into heat (for district heating) and electricity.The amount of heat is the same in both the referenceand combine cases and, hence, not considered in theevaluation of GHG reduction. However, the productionof electricity will change and the system consequencesof that is, as stated, considered by including twodifferent assumptions for marginal electricity. Assumingthat marginal electricity is related to about 260 kg CO 2eq./MWh el (E2), the electricity produced in thereference case results in a yearly reduction of 38Mtonne (dark blue bar to the left in Figure 2). If theemissions of marginal electricity instead is assumed tobe 800 kg/MWh el (E1), the emission reduction wouldincrease by 78 Mtonne/year (light blue bar) to be intotal 116 Mtonne (dark + light blue bar = E1). Thehandling of the biomass is related to GHG emissions