PhD Thesis - Energy Systems Research Unit - University of Strathclyde

Table 4.4 - Explanation of the cash flow equationFinancial component,whereExplanationRevenue from net export sales: A source of income is the sale ofelectricity to the grid at the agreed Feed-in Tariff (FIT). Themonetary value of such a component is calculated by multiplyingthe net electricity exported to the grid by the applicable FIT.Total invoiced electricity without trigeneration: Assuming nomicro-trigeneration system was present, E Total includes the cost ofall the electricity which would have otherwise been purchasedthrough conventional separate generation sourced electricity,including the net imports.Total invoiced electricity with trigeneration: If a microtrigenerationsystem is present only the net electrical imports needto be purchased through conventional separate generation sourcedelectricity. The net electrical imports have to be included as an extraadditional cost which is not covered by the system.Maintenance cost: The financial value of such a cost is calculatedby multiplying the electricity produced by the CHP Maintenancecost rate (MC) in € per kWh produced.Fuel purchasing costs: Given that the fuel type is the same (LPG),the net cost of fuel purchased is calculated by deducting the amountof fuel which would have been used by the space heating in separategeneration from the total fuel used by the micro-trigenerationsystem. The cost component is then calculated by multiplying thenet amount of fuel used by the fuel cost.Using the data obtained from the technical analysis of each individual scenario, theannualised cash flow can be calculated for each scenario. In calculating the cash flowof the different scenarios, reference is made to Section 4.1.1.2 were it was mentionedthat to analyse the sensitivity of the different technical scenarios investigated to thefinancial backdrop in which the micro-trigeneration system was operating. It is clearfrom equation (4.16) that both the electricity tariff and LPG price can have a strongimpact on the feasibility of a system. Moreover, compared to the Investment Costswhich are predominately stable on the short-medium term, and the Feed-in Tariffwhich is also in many cases set for a long period of time, both the electricity tariffand fuel prices can be of a very variable nature. For this reason both the electricitytariff and LPG price were varied independently to create different economicconditions which enabled the assessment of the effect of these two parameters on thefinancial feasibility of the different scenarios investigated. In this context:156