Financial Internal Rate Of Return Research Articles

Life Cycle Assessment and Cost–Benefit Analysis as Combined Economic–Environmental Assessment Tools: Application to an Anaerobic Digestion Plant

In the present study, using Life Cycle Assessment (LCA) and Cost–Benefit Analysis (CBA), we assess the economic–environmental performance of an anaerobic digestion (AD) plant, fed by cultured crops (i.e., maize and wheat), in Italy. The biogas generated by the AD plant is used for the production of electricity, imputed into the Italian energy grid. The LCA evaluated potential greenhouse gas (GHG) emissions, measured via Carbon Footprint (CF), while the CBA analysed the financial and economic profiles via the Net Present Value (NPV) and Internal Rate of Return (IRR) indicators. The strength of combining these methodologies is the joint examination of the financial and social–environmental performance of the plant. The results of the CBA are complemented with the GHG emissions avoided by producing electricity from biogas. The CF of 0.28 kg CO2eq·kWh−1 of electricity produced is mainly due to the nitrogen fertilizers involved in the production of the additional feedstock matrix (i.e., maize flour). In the CBA, the negative financial NPV and the financial IRR, which is lower than the discount rate applied, highlight the inability of the net revenue to repay the initial investment. Regarding the social desirability, the economic analysis, enriched by the LCA outcomes, shows a positive economic performance, demonstrating that the combination of information from different methodologies enables wider consideration for the anaerobic digestion plant. In line with the Italian Recovery and Resilience Plan’s aim to strongly increase the exploitation of renewable resources, an AD plant fed by dedicated crops could valorise the marginal uncultivated land, obtaining energy without consuming land for food production. Moreover, this AD plant could contribute to the creation of repeatable small-scale energy production systems able to sustain the demand of local communities.

Economic and financial aspects of drinking water supply: a project development guideline

Water is one of the most important elements of life, and there is no alternative for human beings. Faced with limited water and financial resources, public policymakers are trying to find new ways of providing society with an appropriate quality of water by attracting private investors. This paper attempts to answer the question of how water sector projects can be developed with private investments to deliver desired economic and social benefits to society. From this perspective, the paper sets the objective of designing a cost–benefit analysis framework that compares the possible deployment models and analyses the optimal solutions that achieve both optimal economic and financial outcomes and can be instrumental in decision making for water sector projects. As a result, the levels of the economic internal rate of return for public decision makers and financial internal rate of return for private investors are examined.

Financial and Socio-Economic Effects of Investment in the Context of Dog Population Management.

The modern world faces serious challenges associated with the presence of stray dogs on the streets, especially in urban areas. Vardar Planning Region in North Macedonia, which consists of nine municipalities, experiences such challenges. According to current reports, the number of stray dogs on the streets of cities in this region has increased, which has resulted in an increase in the number of dog attacks on residents. As the existing capacities are small in the registered shelters, we considered the possibility of building a new shelter for stray dogs to meet the needs of this region. The goal of our paper is the evaluation of the financial and socio-economic justifications for the construction of a shelter for stray dogs in the Vardar Planning Region (VPR). The results of the financial justification analysis show that the project does not provide satisfactory financial results. Namely, the Financial Net Present Value (FNPV) is negative, with a value of EUR 75,291. The Financial Internal Rate of Return (FIRR) is 0.57%, lower than the discount rate, which is not acceptable for a private investor. The Financial Benefit-Cost Ratio (FB/CR) of this project is 0.925, suggesting that the total discounted costs are greater than the total discounted revenues. On the other hand, the expected socio-economic benefits from this project are multifaceted, including savings in stray dog bite costs, savings in the cost of traffic accidents caused by stray dogs, and savings in the treatment of diseases caused by stray dogs. The results of the economic analysis show that this investment has full socio-economic justification and that it should be implemented. The Economic Net Present Value (ENPV) is positive and amounts to EUR 789,916. The Economic Internal Rate of Return (EIRR) is 25.94% and the Economic Benefit-Cost Ratio (EB/CR) amounts to 1.90, i.e., greater than 1. The results of the sensitivity analysis also confirm the justification for the realization of this project.

Direct conversion of syngas to alpha olefins via Fischer–Tropsch synthesis: Process development and comparative techno-economic-environmental analysis

Under the pressure of carbon peak and carbon neutrality, coal chemical industry urgently needs to transform to high energy efficiency, low carbon emissions, and high-added value. A coal-based Fischer-Tropsch to olefins route using a new cobalt carbide nanoprisms catalyst for directly converting syngas into olefins was proposed in this study. To evaluate the feasibility and competitiveness of this route, we designed an products separation process and conducted a process simulation via Aspen plus based on laboratory data. On top of that, the energy consumption, energy efficiency, carbon emission, and economic performance of the coal-based Fischer–Tropsch to olefins route were analyzed, in comparison with coal-based methanol to olefins route. The energy consumption of the proposed route is 10.1% lower than that of coal-based methanol to olefins, and its carbon emissions factor is 14.8% lower than that of coal-based methanol to olefins. When the mass weighted product price is 1504 US $/ton, the project's financial internal rate of return of 17.39% is significantly greater than the industry's benchmark internal rate of return of 12%, indicating that the proposed route has strong economic competitiveness. Finally, several suggestions are proposed to improve the comprehensive performance of the proposed route for its sustainable development.

Joint Operation Modes and Economic Analysis of Nuclear Power and Pumped Storage Plants under Different Power Market Environments

Given the continuous promotion of power market reforms, the joint operation modes and economic analysis of nuclear power and pumped storage hydropower under different market mechanisms are the key to ensuring the low-carbon and economic operation of the power system. First, this study constructed the power expansion optimization model and put forward the allocation ratio by combining the operation characteristics of nuclear power and pumped storage. Second, a simulation model for the joint operation was established to optimize their operation modes. Finally, the joint operation modes and a method for calculating profitability under different power market mechanisms were proposed. A case study in the FJ power grid reveals that the joint operation of nuclear power and pumped storage can increase the annual utilization hours of nuclear power by 1000 h, reduce the operation cost of pumped storage, and increase the market competitiveness of the system. With the improvement in the power market, the joint financial internal rate of return of the system would increase gradually to 11.40% in the long-term mature market. This indicates that the power market reforms would ensure the profitability of the joint operation of nuclear power and pumped storage.

PPP Financing Model in the Infrastructure Construction of the Park Integrating Artificial Intelligence Technology.

The objective is to study the application of the Public-Private-Partnership (PPP) financing model in the infrastructure construction of the park. By analyzing the operation model of the PPP financing model, combined with the Artificial Intelligence (AI) technology, the theory mechanism that digital infrastructure construction and Internet use affect the quality of employment is proposed. Based on the selection theory of the PPP model for infrastructure construction projects in industrial parks, the application of the PPP financing model in infrastructure construction of industrial parks is discussed in specific cases. According to the actual situation of the case, the combination of the PPP financing model and government direct investment is proposed, and the predicted income results are given. The results manifest that the total score of the qualitative analysis of the value for money (VFM) of the project of the proposed financing model reaches 85.36 points, greater than 60 points. It indicates that the project has passed the qualitative analysis of VFM, and the profit of the project meets expectations. Among them, the after-tax (AT) internal rate of return of project investment reached 4.3%, and the financial internal rate of return of capital amount reached 4.23% AT, exceeding expectations. It illustrates that the designed PPP financing model meets the requirements. In the infrastructure construction of the park, the combination of digital technology and the PPP financing model can provide a more reasonable financing plan, which is feasible for the infrastructure construction of the park.

Conceptual design and comprehensive analysis for novel municipal sludge gasification-based hydrogen production via plasma gasifier

Aiming to solve the problems of the environment and land occupied by municipal sludge incineration and landfill technology, novel processes of municipal sludge-to-H2 by plasma gasification and municipal sludge-to-H2 by plasma gasification coupled with synthetic chemical looping processes are proposed to convert municipal sludge into H2 and achieve carbon capture. On the basis of the simulation results, the performance of the two processes was explored through a comprehensive analysis of the process exergy efficiency, economic benefits, and environmental impact. The results show that the novel processes have higher energy conversion and utilization efficiencies. Municipal sludge-to-H2 by the plasma gasification process has notable advantages in production capacity, which is 21.22% higher than that of municipal sludge-to-H2 by plasma gasification coupled with synthetic chemical looping process. However, its exergy efficiency and financial internal rate of return are 6.98% and 4.59%, respectively, which is lower than those of municipal sludge-to-H2 by plasma gasification coupled with synthetic chemical looping. In addition, its total capital investment, global warming potential, and acidification potential are 5.73%, 58.14%, and 16.59% higher than municipal sludge-to-H2 by plasma gasification coupled with synthetic chemical looping. The proposed processes provide promising methods for solving the problems of municipal sludge treatment and the profitable and environmentally sustainable development of municipal sludge into H2.

Techno-economic and sensitivity analysis of shale gas development based on life cycle assessment

For shale gas resevoirs development, many researches focus on how to improve the estimated ultimate recovery (EUR), and ignore the relation of economic benefits and EUR. Therefore, based on the research of EUR evaluation procedure as the basis of economic estimation, the relation of economic benefits and EUR is revealed in detail, and the economy-geology-engineering (EGE) model is creatively built. The results show that six researched wells all have economic benefits: the average EUR is 1.60 × 108 m3, and the after-tax averages of net present value, financial internal rate of return and investment payback period (Pt) are 434.32 × 104 USD, 10.39% and 4.45 years respectively. Combining with the seepage theory and on-site experience, the negative relation of Pt and development degree of free gas is determined. The economic benefits for the unit volume of shale gas are close about 0.03 USD/m3 under the current development technologies. The influence degrees of economic parameters from large to small are gas price, drilling cost, fracturing cost, business cost and subsidy respectively. The proposed EGE model can effectively predict the economic benefits with the complex geology-engineering factors in the Changning block, and the corresponding method can be generalized to more fields.

On the use of techno‐economic evaluation on typical integrated energy technologies matching different companies

This paper mainly establishes the cost-benefit model for techno-economic evaluation on typical integrated energy technologies matching different companies including photovoltaic, electric heat storage, ground source heat pump etc. The techno-economic evaluation indicators such as net present value, investment payback period, and financial internal rate of return are considered. The proposed evaluation method is applied to separately analyze two real companies such as poultry and wood industry to conduct integrated energy technology matching, and then to analyze whether the configuration plan is feasible. The energy consumption and nature of the two enterprises are different, and the matched integrated energy technologies and the corresponding magnitudes are different. The results of the real case analyses show that the use of integrated energy technology will improve energy efficiency and reduce the energy costs.

Design of Affordable Solar Photovoltaic Systems in Nigeria: A Cost Implication Analysis

The demand for electricity generation around the world has significantly increased over the past decades, this is due to the growth in the world’s population, industrialization, economic activities and technological innovation; with various countries opting for alternative sources of renewable energy sources to replace the use of fossil fuel sources of energy whose availability has rapidly declined. The Nigeria power sector has experienced a major setback in power generation, distribution and the power consumption rates in the country has been very low compare to other African countries in electricity per capita. This study examines the designing of an affordable solar photovoltaic (PV) system in Nigeria using the cost and benefit method. Furthermore, a proposed PV electrification model was designed to calculate the Financial Internal Rate of Return (FIRR), Net Present Value (NPV) and Sensitivity analysis of installing a mini-grid system within the Federal Capital Territory (FCT). The result however showed that the system efficiency was calculated as FIRR was 17.5% and the NPV was at N320,897,841 which suggest that the project on this scale is economically viable in the FCT, making the life cycle cost per kWh, including the grid extension cost relatively low. Furthermore, the result obtained revealed that electricity generated from solar energy can contribute to the country’s economy and also eliminate or cut the pollution and toxic waste from the burning excess fossil fuel that releases large amount of CO2 into the atmosphere which affects human health and the environment.

Operating Performance of Full-Scale Agricultural Biogas Plants in Germany and China: Results of a Year-Round Monitoring Program

Germany (DE) and China (CN) have different political approaches in supporting the biogas sector. Three German and three Chinese large-scale biogas plants (BGPs) were evaluated as part of a year-round monitoring program. Laboratory methods were utilized to analyze the chemical indicators. Results showed a stable anaerobic digestion process without system failures in all BGPs. The methane yield had a range of 0.23–0.35 m3CH4/kgODM for DE BGPs and 0.11–0.22 m3CH4/kgODM for CN BGPs, due to different substrates and working temperatures. Financial analyses indicated that DE BGPs are viable under their current feed-in tariffs contracts. Their financial internal rate of return (IRR) ranged between 8 and 22%. However, all CN BGPs had negative IRRs, indicating that they are financially unfeasible. Risk analyses illustrated that DE BGPs will face financial nonviability if benefits decrease by 9–33% or costs increase by 10–49%, or if a combined worse case (benefit decrease and cost increase) of 5–20% occurs. Incentives to BGP operations are particularly important in China, where the government should consider switching the construction-based subsidy to a performance-based subsidy system to motivate the operators. BGP monitoring is necessary to understand the performance, in addition to briefing policymakers in case a policy reform is needed.

Comparative Study on Financial Calculation Indicators of PPP Project

Financial calculation is an important part in the PPP project investment decision. In PPP practice, the selection of financial calculation indicators is quite arbitrary, which is prone to fairness imbalance between PPP projects to a certain extent and even affects project decision-making. Financial calculation indicators usually used in the PPP scheme design include financial internal rate of return, return on investment, reasonable profit rate, annual interest rate, etc. Based on the economic meanings of the four types of indicators and combined with specific cases, the study analyzes the quantitative relation and applicability between different indicators. When the PPP project involves as long a period as 20 to 30 years, it is recommended to use dynamic indicators (financial internal rate of return) rather than static indicators (return on investment, reasonable profit rate, annual interest rate) in the project investment decision. When dynamic indicators are selected, it is more suitable for the public sector to adopt the internal rate of return on investment without considering the financing cost and debt repayment. For private sector, the internal rate of return of the project capital reflects the profit after the financial leverage using equity fund, with more realistic reference significance.

Project feasibility analysis economic model for private investments in the renewable energy sector

PurposeThe purpose of this paper is to explore the financial and economic aspects of the renewable energy sector aiming to develop and present a project feasibility analysis model that allows the public sector to master plan socially beneficial infrastructure projects and to find financially viable options for private investments. This paper develops a general frame that can be harmonized to a certain project by applying relevant country specific schemes.Design/methodology/approachThe cost-benefit analysis (CBA) approach is used to develop relevant formulas aiming to compare the economic internal rate of return (EIRR) and financial internal rate of return (FIRR) of the possible investment options. The IRR method is used for the development of a platform that will allow comparing different project alternatives and choosing an optimal model for both public and private partners. A case study approach from Uzbekistan is used to highlight the implementation possibilities of the model based on a certain country example.FindingsThis paper develops a decision-making frame allowing the public sector to find organizational options that provide economically viable projects and at the same time attract private investors in the latter. The designed map of possible benefits, costs and revenue mechanisms allows practitioners to analyze the economic and financial viability of the existing combinations by using the developed model.Practical implicationsThe developed model will allow the public sector to use the needed data on different possible design models in the developed formulas in order to identify the EIRR and FIRR of each option. Nevertheless, the application of the model will be possible after considering country specific options needed for CBA. The private sector can use the model to identify the financially acceptable options for the investments.Originality/valueThe paper provides the decision makers with a sound tool to identify the possible combinations of the options to conduct a relevant project with private investments in the renewable energy sector and to choose the model that generates the highest social welfare.

On the development of socially beneficial infrastructure projects

PurposeThe purpose of this paper is to introduce a project development framework (PDF) aiming to find socially beneficial public infrastructure provision (PIP) projects in the transport sector. From this perspective, the current paper focuses on the framework of finding an optimized PIP organizational model based on which the projects will be both economically and financially viable and will meet the interests of all the stakeholders. From this perspective, the objective of the current paper is to find in the design phase of the projects, a PIP organizational model for the transport sector, that generates the socially required economic internal rate of return (hereinafter EIRR), thus providing the society with the added social values from the relevant infrastructure projects and, at the same time, ensuring relevant level of the financial internal rate of return (hereinafter FIRR) for the private companies interested in investing in relevant assets. This allows finding socially beneficial PIP organizational model according to the adopted PDF.Design/methodology/approachThe methodology aiming to develop the PDF focuses on analyzing both the economic and financial effectiveness of the PIP projects by exploring different combinations of available options for business, contractual, and financial models of relevant projects. Based on the example of the Republic of Armenia it is shown how the EIRR can be calculated for the PIP projects using the adopted PDF by taking into consideration the transport sector specifics of the country.FindingsThe main advantage of the designed framework is that it focuses on the calculation of the EIRR not only based on the different design options, but also explores the influence of the chosen procurement models on the economic output of the projects. The identification and the calculation of the positive and negative externalities (benefits and losses of the projects) in the economic values within the current PDF serve as the main instrument for the development of the PIP optimized socially beneficial/viable organizational models. The main privilege of the paper is that it considers the social aspect of the project together with the financing aspect without extruding any interests of the parties.Originality/valueThe uniqueness and the novelty of the adopted PDF is that it considers the efficiency of the PIP projects based on the analysis of not only the design options that influence the economic and financial output of the projects, but also compares the impact of the different combinations of the existing privatization, partnership, contractual, financial, and business models on the level of the EIRR and the FIRR. The socially beneficial infrastructure (economically viable) model generates economically and financially viable projects. Thus, the public partner is provided with the highest social value while the private partner is guaranteed a desired financial return.

A novel cascade absorption heat transformer process using low grade waste heat and its application to coal to synthetic natural gas

Energy challenge is becoming more and more serious. Improving energy utilization efficiency seems to be a feasible way to tackle energy problems. A large amount of waste heat is discharged in chemical process industry. It is reported that in a coal chemical process waste heat accounts for 17–67% fuel consumption, of which 60% can be recyclable in theory. Waste heat recovery is a reliable and reasonable way for efficiency improvement. However, the low grade waste heat is difficult to be utilized. Thermodynamic cycles such as organic Rankine cycles (ORC), absorption chillers, absorption heat pumps, absorption heat transformers, and mechanical heat pumps are able to utilize wasted thermal energy for the generation of electrical power, chilling and heat at a higher temperature. In this paper, absorption heat transformer (AHT) is studied and novel cascade absorption transformer (NCAHT) is proposed to recover low grade waste heat. The NCAHT is testified in a coal to synthetic natural gas plant. Results show that the total capital investment of a 12MW NCAHT is 924,000USD. Financial Internal Rate of Return (FIRR) is used as an economic evaluation index. The FIRR is 62.16% and the payback time is 0.77years. When the steam price reduced to 9 USD or the cooling water price higher than 0.96, the FIRR will be less than 30%.

Worms at Work: Long-run Impacts of a Child Health Investment.

This study estimates long-run impacts of a child health investment, exploiting community-wide experimental variation in school-based deworming. The program increased labor supply among men and education among women, with accompanying shifts in labor market specialization. Ten years after deworming treatment, men who were eligible as boys stay enrolled for more years of primary school, work 17% more hours each week, spend more time in nonagricultural self-employment, are more likely to hold manufacturing jobs, and miss one fewer meal per week. Women who were in treatment schools as girls are approximately one quarter more likely to have attended secondary school, halving the gender gap. They reallocate time from traditional agriculture into cash crops and nonagricultural self-employment. We estimate a conservative annualized financial internal rate of return to deworming of 32%, and show that mass deworming may generate more in future government revenue than it costs in subsidies.

Technical and Economic Assessment of a 10 MW Wind Farm at Pakphanang District in Nakhon Si Thammarat Province

This paper presents the technical and economic assessment of a 10 MW wind farm at Pakphanang district in Nakhon Si Thammarat province, southern Thailand. The microscale wind resource map within 10 km is developed based on 3 years recorded wind data at 120 m above ground level (agl) (2012-2014) along with computational fluid dynamic (CFD) wind flow modeling with resolution of 90 m. The 5 x 2.0 MW and 4 x 2.5 MW modeled wind farms are positioned along the shoreline with a position criteria of 5 times the rotor diameter between the turbines. The net annual energy production (AEP) and capacity factor (CF) with wake losses are analyzed. The economic analysis is done based on the current project cost and financial incentive (Adder). Results show that the annual mean speed at 120 m agl is 5.2 m/s. The net AEP and CF are 36.60 GWh/year and 41.78%, respectively with wake loss of 0.40%. Under project cost of 75 million THB/MW and 70% debt ratio and Thailand Board of Investment (BOI) tax exemption promotion, the benefit cost ratio is 1.04, the net present value is 65.96 million THB, the financial internal rate of return is 17.70% and the payback period is 4 years. Finally, a 10 MW wind power project could avoid greenhouse gas emission of 19,764 tons CO2eq per year.Keywords: Wind Energy, Wind Farm, Capacity Factor, Wind Flow Modeling, Project Analysis

Impacts of long-term soil and water conservation on agricultural productivity: The case of Anjenie watershed, Ethiopia

Over the last three decades, many soil and water conservation projects have been implemented in various parts of eastern and southern Africa to control land degradation, and improve land productivity, especially under ‘catchment approach’ initiatives of the 1980s. In Ethiopia, many of these soil conservation projects were implemented following the severe drought of 1974. To capture long-term impacts of these initiatives, a study was conducted in Anjenie Watershed of Ethiopia, assessing fanya juu terraces and grass strips constructed in a pilot project in 1984, and which are still functional 25 years later. Data were collected from government records, field observations and questionnaire surveys administered to 60 farmers. Half of the respondent had terraced farms in the watershed former project area (with technology) and the rest were outside the terraced area (without technology). The crops assessed were teff, barley and maize. Cost–benefit analyses were used to determine the economic benefits with and without terraces, including gross and net profit values, returns on labour, water productivity and impacts on poverty.The results indicated that soil and water conservation had improved crop productivity. The average yields on terraced fields for teff, barley and maize were 0.95tha−1 (control 0.49), 1.86tha−1 (control 0.61), and 1.73tha−1 (control 0.77), respectively. The net benefit was significantly higher on terraced fields, recording US$ 20.9 (US$ −112 control) for teff, US$ 185 (US$ −41 control) for barley and US$ −34.5 (US$ −101 control)ha−1yr−1 for maize, respectively. The returns on family labour were 2.33, 1.01 and 0.739US$man-day−1 for barley, teff and maize grown on terraced plots compared to US$ 0.44, 0.27 and 0.16man-day−1 for without, respectively. Using a discount rate of 10%, the average net present value (NPV) of barley production with terrace was found to be about US$ 1542 over a period of 50 years. In addition, the average financial internal rate of return (FIRR) was 301%. Other long-term impacts of terracing included farmers’ growing of maize on terraced fields as a result of water conservation. Currently, farmers also grow barley on terraced fields for two crop seasons per year unlike the experiences on farms without terraces. Household incomes and food security had improved and soil erosion drastically reduced. Many farmers had adopted terracing doubling the original area under the soil conservation pilot project and consequently improving environmental conservation in the watershed.

Estimating Minimum Toll Rates in Public Private Partnerships

Public private partnership (PPP) is a project delivery method which is used in many countries. The main advantage of this method compared with traditional methods is in the allocation of private funds which are used for providing public services and delivery of projects such as hospitals, schools, roads, and bridges. Under road PPP projects, a commonly used mechanism for the repayment of the private investment is the user charge system, i.e., charging tolls to the facility users. Although the toll rate may be set by the government, there are certain constraints which the minimum toll rate has to meet. These constraints are mainly related to financial parameters such as project's financial internal rate of return (IRR) and debt service coverage ratio (DSCR) which private investors evaluate during the decision making process. In other words, there is a minimum toll rate required to attract private investments. In addition to the financial constraints, other project's parameters such as construction cost, concession life, or level of government subsidies also have an impact on toll rates. The objective of this paper is to investigate the relationship between the level of toll rates and several project technical and financial parameters. A financial model included in the Toolkit for PPP in Roads and Highways, developed by the World Bank and the Public-Private Infrastructure Advisory Facility (PPIAF), is used as a tool to calculate toll rates for various sets of input values. The approach which was chosen to test sensitivity of selected parameters to potential changes in input values (e.g., technical and financial parameters) is by estimation of elasticities.

Techno-economic Evaluations of Various Biomass CHP Technologies and Policy Measures Under Norwegian Conditions

This work deals with evaluations of different possible cost-effective small-scale combined heat and power (CHP) solutions based on biomass for the Norwegian market. Many CHP technologies and systems exist and can easily be proposed as candidates for introduction and/or widespread use in the Norwegian market. However, today they may be far from cost-effective given the current energy market and framework situation. These constraints can, however, change relatively fast. Hence, it is important to evaluate the feasibility of small-scale CHP technologies and systems in this perspective. What will the most promising small-scale CHP technologies based on biomass be in the near to medium term future? What are the limiting factors? What can be done to speed up the introduction of small-scale CHP solutions based on biomass in the Norwegian market? This work evaluates techno-economics of various CHP solutions based on biomass in the Norwegian market. Traditional financial indicators such as financial internal rate of return and net present value are used to assess the solutions. The methodology includes the following sequential steps: estimation of the economic production costs of various options for biomass CHP for power and heat generation and sorting these options in ascending order of costs to present the supply curve to meet the national target. Finally, the analysis includes various incentive schemes, feed-in tariffs/green certificates, investment based tax exemptions (8 years for each technology), prolonged tax exemption (+5 years for each technology), investment subsidies (in % for each technology) and low-interest loans (decided for each technology). Based on the evaluations, MSW backpressure turbine, biogas engine and industrial backpressure turbine are profitable without any subsidy under Norwegian framework conditions. With additional subsidy from grid deduction fee and green certificates, district heat ORC, district heat backpressure turbine and gasification with micro gas turbine are feasible with profitability of internal rate of return above 11%. Other gasification technologies are feasible under prevailing market conditions. In addition, a cost supply curve is generated for 10 years framework conditions based on the planned CHP installations.