Financial Net Present Value Research Articles

Environmental, energy, and economic assessment of Jatropha curcas L. biodiesel production in China

Developing non-grain forestry woody fuel industries such as Jatropha curcas L. (JCL) aligns with the national conditions of countries with food shortages and large populations, such as some countries in Africa and Asia, and is an ideal alternative to replace fossil fuels. Determining appropriate planting densities suitable for different regions is one of the most critical practices for agriculture and forestry to achieve high yields and sustainability. This study conducted a life cycle assessment (LCA) of the JCL biodiesel's environmental impact, energy balance, and economic analysis (3E) of two densities and three of the most suitable planting regions in China. Findings reveal that the density of 2500 plants/ha had a better 3E performance than 1600 plants/ha, and Yunnan province outperformed Guizhou province and Sichuan province. JCL biodiesel effectively mitigates the greenhouse effect (1141.14–1936.59 kg CO2 eq/t) compared to conventional fossil diesel in different cases. Key factors influencing environmental performance include seed yield, urea applied during cultivation, methanol for biodiesel conversion, and electricity for irrigation. The Net Energy Balance (NEB) and Net Energy Ratio (NER) demonstrate the superior energy efficiency of JCL biodiesel over fossil diesel. The cost of producing JCL biodiesel decreased with the maturation of the trees, with water use and labor salary accounting for over 80% due to the necessity of the cultivation stage. Although the Financial Net Present Value (FNPV) was negative when considering only JCL biodiesel, it became positive (12111.64–27342.44 CNY) with the inclusion of by-products (glycerine, press-cake, and shells) in high-density cases. Our findings suggest that JCL biodiesel with appropriate density can serve as a sustainable biofuel alternative, replacing a portion of the fossil diesel currently on the market and significantly contributing to climate change mitigation and nonrenewable energy conservation.

Economic Analysis of Solid Oxide Fuel Cell Systems Utilizing Natural Gas as Fuel

Solid oxide fuel cell power generation systems are devices that utilize solid electrolytes to transfer ions for electrochemical energy conversion. A wide range of gases can be used as fuel gas, including hydrogen, natural gas, and carbon monoxide. Considering the high cost of pure hydrogen, hydrogen production from natural gas reforming has become a hot research area. In this study, the 4F-LCA method was employed to construct an evaluation framework, with a particular emphasis on the cost analysis of solid oxide fuel cell power generation systems, and uses a bottom-up approach to build a system economic analysis model to visualize the major costs involved in the system. An economic benefit analysis and sensitivity analysis were carried out for the 2 kW natural gas solid oxide fuel cell as a case by taking the financial net present value (NPV), internal rate of return (IRR) and payback period into account. In this study, the investment cost and payback period of a 2 kW solid oxide fuel cell system are obtained, which can provide a reference for the project construction and operation of solid oxide fuel cell systems.

Techno-economic comparison on charging modes of battery heavy-duty vehicles in short-haul delivery: A case study of China

It is critical to arrange appropriate charging infrastructure in advance to decarbonise heavy freight through electrification. Based on the same service level, this study conducted a techno-economic comparison of charging modes for battery heavy-duty vehicles in short-haul delivery, covering the broadest range of charging modes, including slow, fast (150 kW), fast (350 kW), swap, and overhead catenary. The techno-economic performance is obtained by a model composed of five evaluation indicators, in which the ratio of service capacity to cost and the average financial net present value are specific. The factors influencing the techno-economic performance of charging modes are further explored based on case analysis. Results show that the charging modes of slow, fast (150 kW), fast (350 kW), swap, and overhead catenary are not profitable under the corresponding facility utilisation rates of 40%, 20%, 20%, 30%, and 70%, or under operating years of 5, 3, 2, 4, and 12 years. Fast charging, at both 150 and 350 kW, has a better advantage in profitability based on the highest average financial net present value. Swap charging is best regarding energy supplement efficiency, but it is not profitable when the battery swapping price is less than 0.8 CNY/kWh. Overhead catenary charging is the most effective system per unit cost due to the highest ratio of service capacity to cost. The insights, the precise prediction of the charging demand, the focus on the charging price, and the comprehensive improvement in the facility utilisation rate are crucial for the success of charging service providers.

Analysing the Sustainability of the Production of Solid Recovered Fuel from Screening Waste

The development in wastewater management has caused a shift towards a circular model that prioritises energy generation and waste reduction. Traditional unitary processes in wastewater treatment, such as screening, only allow for landfill disposal without energy recovery. However, producing solid recovered fuel (SRF) from waste screening may be a possibility. The economic and environmental viability of this alternative, as a fundamental requirement for its implementation at industrial level, was assessed through a multi-scenario analysis using Monte Carlo simulation. The cost and benefit streams were determined based on the financial net present value (NPVf) and the social net present value (NPVs), including monetised CO2 emissions generated. The results showed that waste drying costs were found to be the most significant ones, with thermal drying being more financially advantageous than solar drying. The densification of SRF raises the costs by 7.88 to 8.48%, but its use as fuel would likely be profitable due to the economic benefits it provides. Current landfill disposal practices, which have an NPVs of −1052.60 EUR/t, are not a feasible, particularly when compared to the other SRF production scenarios, with maximum NPVs of −53.91 EUR/t. SRF production without densification using solar drying is the most acceptable scenario with the lowest NPVs (38.39 EUR/t).

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.

Management of Acacia Plantations for Charcoal Production: Local Economies and Sustainability

The objectives of this research were to estimate volume ofcharcoal produced per unit area of Acacia seyal plantations atWadelbashier Forest Reserve and to estimate financial profitability(US$ ha-1 ) of charcoal production, using net present value (NPV) as adecision criterion. Data on tree growth was collected, using fixed-radiustemporary circular sample plots. Present and harvest age standing woodvolumes were estimated. Market-related data were collected throughstructured interviews of key informants of the staff of Forest NationalCorporation (FNC) of Algadarif State, members of Trade Union ofFuelwood Producers and Traders, and from secondary sources of thestate forestry service. The results indicated that the present standingwood volume (m3 ha-1 ) ranged between 8.4 and 26.2 and that charcoalproduction from A. seyal plantations managed for a rotation of 20 yearsat 12% annual discount rate yielded a negative mean financial NPV ofUS$ ha-1 -30.3 indicating that charcoal production at current stocking,factor costs, output prices, a 12% annual discount rate and a rotationlength of 20 years is not financially profitable. The study concludes thatpolicy and management interventions are inevitable for sustainableproduction.

Study on stability and economic evaluation of two-well-vertical salt cavern energy storage

In order to take advantage of the special layered salt rock in China, the idea of using two-well-vertical (TWV) to construct cavern was put forward, and it has been applied in some salt mines. However, at present, there is still a lack of in-depth research on the two factors that greatly affect the stability of the TWV cavern: the roof shape and working conditions. In addition, there is still a lack of targeted research on the economic rationality of constructing caverns by TWV. Therefore, in this study, based on the cavern shape of the TWV method, salt cavern underground gas storage (UGS) model with buried depth of 1130 m was established, and numerical simulation research was conducted under different roof shapes and injection-production (IP) frequency. The simulation results show that the roof bulge will produce large deformation and is a potential unstable area. When the IP frequency increases, the risk of instability will increase to some extent. In addition, the design under different working conditions is optimized and the IP frequency and the minimum operation internal pressure (Pmin) suitable for different well spacing are put forward. Then, based on the discounted cash flow (DCF) method, the economic analysis of the proposed TWV salt cavern construction project was carried out. The internal rate of return (IRR), financial net present value, investment payback period and storage and transfer fee are evaluated, and the break-even point of the project was analyzed. Comprehensive research shows that it is feasible to use the TWV method to construct salt cavern in China.

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.

Economic and thermodynamic comparison of enhanced recycle split vapor processes for ethane recovery under different rich feed compositions

Based on the recycle split vapor (RSV) process for ethane recovery, this paper proposes three primary improved processes, and in China, five rich feed compositions are selected as preliminary data. We use economic and thermodynamic analysis methods to compare and analyze RSV and its improved processes comprehensively. The comparative analysis results show that: ①The enhanced techniques all show a certain energy-saving effect, especially it is evident for the modified recycle split vapor with liquid flashing (RSVF) process to save energy; ②The geometric structure of the plate-fin heat exchanger inside the cold box significantly affects its capital cost, the design of the plate-fin heat exchanger in the corresponding cold box is basically the same, with slight differences under different feed conditions; ③The compressors and expander are the most prominent investment types of equipment, and their purchase costs accounting for about 70% of the total purchased equipment costs. The values of financial net present value (FNPV) of the improved processes are all greater than zero under the operating conditions in this study, which can meet the profitability required by the benchmark rate of return. The project has a more significant return on investment and shorter return time; ④The improved processes under five feeds show excellent performance and adaptability: the larger GPM (gallons per thousand cubic feet) values of feed compositions, the more apparent the energy saving. The main contributors to the exergy destruction are towers, compressors, expander, and cold boxes; ⑤Compared with the improved recycle split vapor with gas extraction (RSVG) and supplemental rectification with compression and recycle split vapor (SRCR) processes, the improved RSVF process has a better pre-separation effect for heavy hydrocarbons by adding a flash separator, which makes this process have less exergy destruction and enormous energy-saving potential.

Discounting and the Green Transition: District Heating in Denmark

Taking Aalborg as the basis for a case study, we consider the discount rates, annuity rates and costs of capital that were used in recent socio-economic and financial Net Present Value (NPV) analyses of a proposed geothermal district heating plant. While the core NPV analysis applied a real social discount rate of 4 percent, in keeping with Danish government guidance, emissions and electricity prices were based on costs of capital that differed from this rate, as did the annuity rate applied in the financial analysis of the project. While the different rates are carefully justified in each setting, we question whether there is consistency in the approach taken to intergenerational welfare across different steps of the analysis. The use of high corporate rates in some contexts potentially makes it more difficult for Green Transition projects to meet the legal requirement of being evaluated as socio-economically optimal.

The Study of Economic and Environmental Viability of the Treatment of Organic Fraction of Municipal Solid Waste Using Monte Carlo Simulation

Valorization of municipal solid waste (MSW) plays a crucial role in a sustainable society and provides an opportunity to reduce carbon emissions. The economic and social viability of the treatment of the organic fraction of MSW (OFMSW) with a multi-scenario analysis (composting and anaerobic digestion for renewable electricity or for biomethane injection into natural gas networks) was studied using a Monte Carlo simulation. The cost of treating organic fraction of MSW to neutralize financial net present value (NPV) and social NPV through greenhouse gas emissions avoided was determined for each scenario. The costs considered were the investment and the operating and maintenance costs. The financial benefits from the revenue of subproducts depended on the scenario. The lowest average fee to neutralize the financial NPV was 6.38 €/tonne treated in anaerobic digestion for biomethane injection into natural gas networks, therefore, it was the most financially viable. The average social NPV calculated for biomethane injection into natural gas networks (16.60 €/tonne) was higher than that obtained for renewable electricity (13.59 €/tonne). According to the results, anaerobic digestion for biomethane injection into natural gas networks is the most socially and economically viable alternative for the treatment of OFMSW.

Comparison of Small-Scale Wind Energy Conversion Systems: Economic Indexes

Wind energy is considered as one of the most prominent sources of energy for sustainable development. This technology is of interest owing to its capability to produce clean, eco-friendly, and cost-effective energy for small-scale users and rural areas where grid power availability is insufficient. Wind power generation has developed rapidly in the past decade and is expected to play a vital role in the economic development of countries. Therefore, studying dominant economic factors is crucial to properly approach public and private financing for this emerging technology, as industrial growth and energy demands may outpace further economic studies earlier than expected. In this study, a strategy-focused method for performing economic analysis on wind energy based on financial net present value, levelized cost of energy, internal rate of return, and investment recovery period is presented. Numerical and simulation results depict the most optimal and economical system from a 3 and a 10 kW wind energy conversion system (WECS). Moreover, the aforementioned criteria are used to determine which WECS range is the most suitable investment with the shortest payback period. Finally, an economically viable and profitable wind energy system is recommended.

Determining the Ecological Compensation Standard Based on Forest Multifunction Evaluation and Financial Net Present Value Analysis: A Case Study in Southwestern Guangxi, China

ABSTRACT There is growing concern that public benefits from forests are underprovided in current forest management regimes and need to be increased through policy and economic measures that promote conservation. Ecological compensation is a type of institutional arrangement for the sustainable use of ecosystem services achieved by adjusting the distribution of costs and benefits among different stakeholders using economic measures. However, how to accurately and reasonably determine the compensation standard for ecological services has not been guided by scientific methods and theories. This study provides an estimation of the compensation standard for forest ecological services based on the forest multifunction evaluation and financial net present value analysis, and a case study was performed in Southwest China. The results showed that most forest types brought some economic loss to the managers but contributed great ecological benefits to the public when they were managed as ecological forests. It is crucial to incentivize forest managers to participate in voluntary conservation programs through ecological compensation. The results of this analysis can potentially guide sustainable forest management by both accurate quantification of the value of forest ecosystem services and an improved understanding of the costs of voluntary forest conservation schemes currently in use in many countries.

Research on Integrated Planning Method of Offshore Oil and Gas Exploration and Development

Under the requirement of high-quality development, the research method of integrated model planning for offshore oil and gas exploration and development suitable for the western South China Sea is put forward. Based on the new round of resource evaluation and exploration and development research in the western South China Sea, the in-depth research on underground oil and gas resources, surface development facilities, external factors and economic indexes are carried out to clarify the industrial layout of oil and gas development. The potential and prospect of oil and gas exploration and development were implemented, and the main external factors and corresponding measures affecting the planning were clarified in this paper. The economic evaluation model suitable for the region is established based on the analysis of internal rate of return, comprehensive barrel oil cost, critical price, financial net present value and other important indicators, and a set of planning and research methods suitable for the integration of exploration and development in the western South China Sea is finally formed. This method has been applied to the replacement reserve study of Weizhou X and Weizhou Y oil fields. It is found that the planned reserves and production are consistent with the actual ones, and good practical results have been achieved.

Catenary-Free Tramway Systems: Functional and Cost\u2013Benefit Analysis for a Metropolitan Area

New tramway technologies such as “ground-level power supply systems” fit with the purpose of preserving historical heritage and urban environments of city centers. Such public transportation systems do not require a traditional air supply system (+ 750 V) and are therefore referred to as “catenary-free systems” (i.e., APS system, tramwave system, Primove system). Their implementation is becoming increasingly widespread, especially for cities with prestigious historical heritage, where high levels of environmental sustainability, capacity, reliability and safety standards are required. The study compares some of the most well-known and novel catenary-free systems for the creation of a 68-km tramway system, to be implemented in a metropolitan city. For each of the 7 new tramways, AIMSUN microsimulations were run to identify the most appropriate tramway track geometry and road section to minimize the interference with the vehicle activity. Moreover, for each system a financial and economic performance analysis has been carried out for an investment of about 869 million euros, while taking into account different scenarios of transportation demand. In addition, a cost–benefit analysis of the tramway lines investment project has been presented, including the calculation of the financial net present value, the economic net present value, rate of return of the investment and cost–benefit ratio. The analysis demonstrates that the APS ground-level power supply system is a proven alternative with greater economic and financial performance.

Technical and economic feasibility of a novel heavy oil recovery method: Geothermal energy assisted heavy oil recovery

Conventional hot water flooding generally has disadvantages of high energy consumption and large capital expenses. To improve the economy of hot water flooding, a novel geothermal energy assisted heavy oil recovery method is presented. To validate this idea, a numerical simulation study is conducted to analyze the performance of the heat exchange well and heavy oil recovery process. Furthermore, the new method and conventional hot water flooding are compared to examine the economic feasibility of this new method based on the financial net present value. Finally, factors that may affect the feasibility of this new method are discussed. The simulation results show that compared with cold water flooding, the new method can increase heavy oil recovery by more than 7%. Moreover, the financial net present values of the new method at different oil prices all surpass those of the conventional water flooding, and thus the new method proposed is feasible both technically and economically. The analysis on the factors affecting the feasibility reveals that the critical oil price (the oil price when the financial net present value equals 0) of the new method decreases with increasing heavy oil reservoir thickness, decreasing oil viscosity, permeability variation coefficient and initial reservoir pressure.

Financial Viability and Sustainable Management of Acacia nilotica Plantations in El Ain Natural Forest Reserve, Sudan

This study analyses fuelwood volume and honey yield per hectare of Acacia nilotica plantations in El Ain Forest Reserve in Sudan, and assesses the financial viability of fuelwood-honey enterprises using discounted cash flow analysis. Tree growth data were collected using fixed-radius circular sample plots to estimate wood volumes of present and harvest ages. Key informant interviews of Forest National Corporation staff of North Kordofan State and members of the Trade Union of Fuelwood Producers and Traders provided market-related data. Fuelwood production in A. nilotica plantations generates a negative financial net present value (NPV), but when combined with revenue from honey production provides a positive NPV. The findings also suggest that beekeeping may act as an incentive for sustainable forest management.

Sustainable waste management: Waste to energy plant as an alternative to landfill

The management of municipal solid waste (MSW) has been identified as one of the global challenges that must be carefully faced in order to achieve sustainability goals. European Union (EU) has defined as Waste to Energy (WTE) technology is able to create synergies with EU energy and climate policy, without compromising the achievement of higher reuse and recycling rates. The methodology used in this paper is based on two levels. A strategy analysis defines the amount of waste to incinerate with energy recovery considering different approaches based on unsorted waste, landfilled waste and separated collection rate, respectively. Consequently, it is evaluated the sustainability of a WTE plant as an alternative to landfill for a specific area. Two indicators are used: the Reduction of the Emissions of equivalent Carbon Dioxide (ERCO2eq) and Financial Net Present Value (FNPV). Furthermore, a social analysis is conducted through interviews to identify the most critical elements determining the aversion toward the WTE realization.The obtained results show the opportunity to realize a 150kt plant in the only electrical configuration. In fact, the cogenerative configuration reaches better environmental performances, but it is not profitable for this size. Profits are equal to 25.4€ per kiloton of treated waste and 370 kgCO2eq per ton of treated waste are avoided using a WTE plant as an alternative to landfill. In this way, the percentage of energy recovery ranges from 21% to 25% in examined scenarios and disposal waste is minimised in order to preserve resources for the future.

Economic rationale of traditional agroforestry systems: a case-study of Ficus trees in semiarid agro-ecosystems of Karnataka, southern India

In Mandya district of southern dry agroclimatic zone of Karnataka, trees of the genus Ficus are abundant in rainfed agro-ecosystems with field crops like millets, maize, pulses and oilseeds. Economic values of this traditional agroforestry system were compared with alternative high-input systems using data collected from farmers’ interviews, group discussions and field walks held in 18 villages in Mandya. Data on annual farming costs and returns were used for a preliminary income comparison of various agricultural systems prevalent in Mandya. For further comparison with Ficus agroforestry, alternative systems were selected based on existing cropping pattern and farmers’ preferences. Financial (including all paid up costs and benefits) and economic (including opportunity costs of land, family labour, external agricultural inputs and benefit of in situ litter nutrient input from trees) benefit-cost analyses were conducted for assessing relative profitability of farming systems. Among the different systems compared, irrigated agroforestry systems with high-value trees emerged to be the most profitable. Among rainfed systems Ficus agroforestry had higher financial net present value (NPV), while economically Eucalyptus plantation had higher NPV due to less labour requirements. The implications of these results in judging a socioeconomically optimal land use for Mandya are discussed further.

The optimal debt ratio of public–private partnership projects

Many governments regard the public–private partnership (PPP) as the best approach to implement high speed rail projects. However, most PPP schemes incorporate long-term debts in the capital structure due to huge initial investments and long recovery periods. An optimal capital structure, meaning the financing mix between debt and equity, maximizes the value of the PPP project. The terms and conditions of the debt are subject to negotiations between the private sponsor and the financiers, given the concession agreement between the host government and the sponsor. Debt ratio is a key term in the project finance funding agreement. This study contributes to the project preparation of PPP schemes by developing a simple model to determine the optimal debt ratio for financing PPP projects and to establish the relationship between debt ratio and hurdle rates of projects' financial indices. Results suggest that the hurdle rate of financial net present value determines the lower limit of debt ratio and the hurdle rate of times interest earned decides the upper limit of debt ratio in the Taiwan high speed rail project.