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Optimal CHP investments applying sensitivity analyses and financial risk management indicators
File(s)
Author(s)
Acha Izquierdo, Salvador
Lambert, romain
Le Brun, niccolo
Markides, christos
Shah, nilay
Type
Conference Paper
Abstract
Evaluating combined heat and power (CHP) investments for commercial applications is not a straightforward task.This work assesses the impact multipletechno-economicuncertainties can have on CHP investments.Understanding the impact these uncertaintiescanhave on projectviabilityallows decision-makers to make informed decisions on capital intensive projects. In this work,amathematical model described previously (Cedillos et al.)wasused to select the optimal CHP size and calculate a reference solution on the financial viability of such investments in a set of buildings. After generating these reference CHP solutions, the impact of uncertainty is then assessed by applying Monte-Carlo based sensitivity analyses and financial and risk management key performance indicators (KPIs). Results suggest thefour most influential parameters in CHP priojects areheating demand, installation costs, electricity prices, and electricity demand. For attractive investments cost uncertainty made projects vary in their payback from2.6 to 6.9years, while for unattractive investments payback ranged from 4 to 11.3 years. Furthermore, Monte-Carlo results illustrate thedifferent distributions of each project, with significant variations in tails risks; indicating which sites are more suitable than others. Results presented show the economic impactuncertainties have onCHP projects, hence allowing decision-makers to make informed decisions before committing their resources to such capital-intensive projects.
Date Issued
2018-06-23
Date Acceptance
2018-03-05
Citation
Presented at the 2018 ASHRAE Annual Conference, 2018
URI
Publisher
ASHRAE
Journal / Book Title
Presented at the 2018 ASHRAE Annual Conference
Copyright Statement
© 2018 ASHRAE www.ashrae.org. ASHRAE Conference Proceedings, June 2018.
Sponsor
Sainsbury's Supermarkets Ltd
Grant Number
CEPSE_P57236
Source
2018 ASHRAE Annual Conference
Publication Status
Published
Start Date
2018-06-23
Finish Date
2018-06-27
Coverage Spatial
Houston, USA