Present Value Research Articles

Technical and Enviro-economic Analysis of a 0.78 kWp PV System

Aim: To determine the technical, economic and environmental performance analysis of an installed PV backup system. Study Design: To attain this goal, analysis were performed using a freely available PVSyst 6.7.0 software tool. Economic evaluation was performed using respective present worth of individual component prices. Environmental performance comparison is made between the PV system and diesel generator when each is used as an independent backup system. Input in-situ measured data were determined, measured and keyed into the tool. Place and Duration of Study: The system is installed in an institutional building in a tropical climatic zone with coordinates 0.42 N and 35.03 E. The system was studied for a period of one year where data was collected and recorded for techno-enviroeconomic analysis. Methodology: The system consists of four PV modules rated at 0.78 KWp, charge controller and an inverter unit and battery bank, and is utilized as a power backup system to supply electricity whenever power failure occurs, which is frequent and real in Kenya. The techno-enviroeconomic performances analysis of the system were evaluated using the PVSyst software, a freely available design and analytical tool, where input data were measured and recorded at the site. Results: The performance analysis of the system showed that PV array efficiency of 13.24%, FF of 0.68, CF of 21.23%, and PR of 73.63% and generated electrical energy of 1092 kWh/year. The LCOE of PV electricity was 0.059 $/kWh, while total saving of CO2 emission in tons of CO2 was 9.0 tCO2 with LCE value of 331 gCO2/ kWh. Conclusion: Techno- enviroeconomic performance results of the studied PV system show that the system can contribute significantly to the mitigation of CO2 emission. This work also could be helpful for consumers and policy makers in the choice of renewable based or fossil based backup generation systems.

Multistage AC transmission expansion planning including fault current‐limiting high‐temperature superconducting cables and multiple distributed generations to improve short‐circuit level and grid‐scale flexibility

AbstractThis paper proposes a new multistage AC model for transmission expansion planning that finds an optimal combination of transmission lines, fault current‐limiting high‐temperature superconducting cables, and multiple distributed generations (DGs). On this basis, the proposed model, from a new perspective, allows for simultaneous improvement of the short‐circuit level and grid‐scale flexibility (GFLX) under both normal and fault conditions. The objective function to be minimized includes not only the net present worth of the total investment and operation costs but also the congestion‐induced GFLX degradation measure. This model also takes the AC power balance and flow relationships, equipment capacity limits, nodal voltage bounds, DG penetration level limit, as well as discrete logical and financial restrictions together into account with the short‐circuit level constraint. To overcome the complexity of solving the resultant non‐convex mixed‐integer non‐linear optimization problem, a multi‐objective integer‐coded melody search algorithm is employed, followed by a fuzzy satisfying decision‐making mechanism to obtain the final optimal solution. The exhaustive case studies conducted on the IEEE 24‐ and 118‐bus test systems verify the efficacy of the newly developed model in terms of cost‐effectiveness, flexibility, and short‐circuit level suppression when facing different normal and fault conditions.

Advertising investments on television: real option estimation through Markov chains

AbstractWe propose the valuation of a real option in the telecommunications industry. According to the probabilistic present worth approach, we estimate the value of a contract between a television network and a company willing to advertise its business on this network. We assume that the value of the contract depends on a time-dependent variable, i.e., the number of viewers tuned into the network, which behaves like a Markov process. After discretizing and converting this number into a monetary value through a specific function, we compute the nth-order moment of the total discounted earnings. The knowledge of the moments, and the application of the maximum-entropy approach, allows to find the probability distribution of the payoff function and the consequential pricing of the real option. Finally, we apply the proposed model to the real television audience data.

Profitability of supersonic travel

Since the retirement of the Concorde in 2003 no commercial supersonic flights were operated. In 2014 the aircraft manufacturing start-up Boom announced the development of a supersonic aircraft by 2029 and has since gathered 130 orders. This paper analyzes the profitability of this aircraft by calculating the net present value of an investment decision and comparing this to a subsonic aircraft. It is determined that supersonic travel has 50% higher cash operating costs per seat. This implies that, for example, a return flight LHR-JFK merely breaks even at a WACC of 6%. The central question of this paper is whether this cost premium can be covered by a price premium paid for the time saved on a supersonic flight. A schedule analysis shows that this price premium is justified on westbound but not on eastbound flights. Thus, a westward rotation of the supersonic fleet is proposed. To avoid seat imbalances this network can be supplemented by an eastward rotating subsonic narrowbody fleet in an all-business configuration. Whereas a supersonic rotation A - B - A only breaks even with a net present value close to zero, a westward supersonic rotation A - B - C - A complemented by a subsonic rotation A - C - B - A achieves a significant profit reflected in a net present value of over $ 40 mill. per aircraft. It follows that this network structure is the only profitable one.As a by-product it is reconstructed that the Concorde was marginally cash-positive, explaining why operations was kept up for 27 years but no aircraft were ordered after the initial batch.

Techno-economic analysis of electron beam irradiation pretreatment of corn straw for anaerobic digestion

The complexity of anaerobic digestion process and the risks of investing in new technologies are the main obstacles to improving anaerobic digestion technology. There is still a gap between research results and commercial applications. This study investigated the techno-economic feasibility and bottlenecks of introducing electron beam irradiation pretreatment technology into the commercial-scale anaerobic digestion plant. Model construction, parameter initialization and economic analysis were performed in SuperPro Designer software. The parameters used in the model were derived from experimental results, software built-in model and recent literature. The results show that the gross margin, return on investment, payback time, internal rate of return, and net present value of the system with electron beam irradiation pretreatment are 4.4 %, 9.8 %, 10.1 years, 8.0 % and $0.6 million, respectively. The corresponding values of the system without electron beam irradiation pretreatment are 9.9 %, 11.1 %, 8.9 years, 9.7 % and $1.5 million, respectively. The main factor affecting gross profit is tipping fee of liquid anaerobic digestion effluent, followed by plant size of anaerobic digestion, degradation efficiency of corn straw, and compost price. This study has guiding significance for the application of electron beam irradiation pretreatment technology in the production of renewable energy from lignocellulosic biomass.

Evaluating the impact of off-design CHP performance on the optimal sizing and dispatch of hybrid renewable-CHP distributed energy resources

The maturation of distributed energy resources (DER) has prompted the exploration of their deployment in commercial building applications due to their potential to supply energy at lower costs and emissions rates compared to centralized generation. While several software tools exist for evaluating the techno-economic potential of integrated renewable energy and combined heat and power (CHP) systems for distributed generation applications, many suffer from poor accuracy in capturing off-design (part load and changes in ambient air temperature and pressure) performance characteristics of microturbines, combustion turbines, or internal combustion engines. Thus, this paper presents a methodology for integrating these off-design characteristics in the mixed-integer linear program within REopt, a hybrid DER screening tool. The economic impact of the CHP off-design performance is observed through several application studies of various hybrid system configurations in different climates. Each study indicates how CHP off-design performance influences optimal sizing and dispatch decisions and therefore overall system economic value. We observe through case studies that modeling without the off-design effects, depending on the CHP prime mover and site, can result in Net Present Value predictions of hybrid systems that can be overoptimistic in frequently hot climates (up to 52 %), too conservative in frequently cold climates (up to 11 %), or unaffected (＋/−1 %) in temperate climates. Cases also highlight several advantages of hybrid systems relative to non-hybrid systems such as total economic value and the systems’ ability to mitigate potentially negative consequences attributed to off-design performance.

Multiple Contracts with Simple Interest: The Case of SACRE-F

In a previous paper de Faro and Lachtermacher (2023), considering a particular version of the so-called System of Increasing Amortization in Real Terms, SACRE-F, in the case of compound interest, was shown that if a single contract is substituted by multiple contracts, one for each payment of the single contract, the financing institution may derive substantial fiscal gains. In terms of the present value of the corresponding income taxes.
 Notwithstanding, the Brazilian Jurisprudence, cf. Jusbrasil (2023), has repeatedly determined that the use of compound interest implies the occurrence of anatocism. The payment of interest on interest. Mari & Aretusi (2019) reported the same kind of determination by the Italian justice.
 Therefore, the analysis should also consider the hypothesis of the use of simple interest. SACRE-F, in the case of simple interest has shown that if a single contract is substituted by multiple contracts, one for each payment of the single contract, the financing institution may derive substantial fiscal gains, as in the compound interest case.

Estimating returns to schooling and experience: a history of thought

ABSTRACT This paper is a review of the literature in economics on the effect on earnings of human capital investment from Adam Smith to the early 1980s. It discusses the use of the net present value (NPV) technique by Walsh and Friedman and Kuznets, and Becker’s use of the NPV to estimate the internal rate of return to schooling. The first regression-based approach was the Becker and Chiswick ‘schooling-earnings function’, which was expanded by Mincer to the ‘human capital earnings function’ (HCEF) by incorporating on-the-job training. Extensions of the HCEF in the 1970s and early 1980s are discussed.

Comparative study of costs of belts and trucks for the transportation of mineral in surface mining [Estudio comparativo de costos de fajas y camiones para el transporte de mineral en minera superficial]

This study focuses on making a detailed description of the unit costs associated with the transportation of minerals in mining operations. The hypothesis proposed suggests that, when carrying out an economic evaluation, conveyor belts exhibit a lower present value compared to the use of trucks. The research is characterized by being applied, non-experimental and descriptive. The conclusion drawn indicates that, when contrasting these two options through an economic analysis, the conveyor belt has a reduced present value of 119 million dollars, which represents an advantage over trucks that have a present value of 164 million dollars. reflecting a difference of 39% indicating that the conveyor belt is positioned as the most beneficial option for its construction. To carry out this project, it would be necessary to have 13 trucks, as well as a stacker, a front loader and a material crusher. In contrast, an option to use trucks would require a quantity of 22 units, with a demand of 50% in present value terms compared to the conveyor belt approach.

Assessing the Impact of Preprocessing and Conversion Technologies on the Sustainable Aviation Fuel Supply from Forest Residues in the Southeast U.S.A.

Forest residues have been suggested as potential feedstock for sustainable aviation fuel (SAF) production through different pathways. However, the bulky density and scatter distribution require efficient size-reduction processes to enhance the feedstock supply. Thus, this study analyzes the impact of alternative preprocessing and conversion technologies on the SAF supply chains from logging residues (the predominant share of forest residues) using a two-stage mixed-integer linear programming model. The model determines the optimal location of biomass preprocessing depots, conversion facilities, and airports receiving SAF by minimizing the net present value of the total supply chain cost over 10 years. Using high-resolution spatial data in the Southeast U.S.A. as a case study, the results show that the technology and scale of the facilities heavily influenced the SAF’s breakeven cost and maximum supply quantity. The most economically efficient system that adopts a rotary shear milling system and pyrolysis conversion process could generate up to 650 million gallons of SAF from logging residues in the region, with nearly 62% of the SAF being produced from hardwood residues. Also, the most efficient system has an estimated breakeven cost of US$5.51 per gallon of SAF.

Performance evaluation and optimization of a multigeneration hybrid system for power, hydrogen, cooling, and freshwater production from renewable sources

Designing a hybrid system emerges as a highly efficient strategy for augmenting the performance of renewable-based power plants, owing to their adaptability in integrating diverse subsystems. In this study, a new multigeneration system is introduced, showcasing its capability to concurrently generate power, hydrogen, cooling, and freshwater through a synergy of methanol-steam reforming, modified absorption refrigeration cycles, humidification-dehumidification, and multi-effect desalination. The operational foundation of the system is rooted in the harmonious integration of solar and geothermal energy sources. To comprehensively evaluate the proposed system's performance, a combination of exergy and economic analyses is employed. This research studies the impacts of varying key parameters on the system's operation. Notably, the water-to-methanol ratio is identified as the most influential variable affecting reformer performance, underscoring the pivotal role of reforming pressure. The estimated total fixed cost of the system stands at $4.039 million, with a calculated payback period of 6 years and a net present value of $3.454 million. Furthermore, in its optimized state, the system achieves an impressive exergy efficiency of 49.80 % and a unit product cost of $32.38/GJ. These findings unequivocally validate the feasibility and economic viability of the proposed hybrid renewable-based power generation system. In conclusion, the amalgamation of solar and geothermal energy, coupled with meticulous parameter optimization, substantiates the potential of this innovative system to serve as a sustainable and economically viable solution for power generation.

Quantifying the Financial and Climate Impacts of Greenhouse Gas Abatement Pathways in Residential Space Heating

New York State (NYS) has set strict greenhouse gas (GHG) emission reduction targets across all sectors of its economy, including the heating sector. This study examines the financial value and environmental impacts of the residential space heating sector in NYS under different GHG abatement options by comparing the existing natural gas heating pathway with three potential GHG abatement pathways: renewable natural gas (RNG), hydrogen blended into RNG, and air-source heat pumps (ASHPs). These pathways are analyzed via a comparative net present value (NPV) framework from 2022 to 2042 with the emission reduction represented as a revenue stream that serves as a function of the social cost of GHGs. The investment timing of each of these pathways is also accounted for to reflect the pathways’ varying deployment timelines. The ASHP pathway with a 10% financial discount rate and a 2% social cost of the GHG discount rate achieves the lowest NPV. The RNG pathway achieves the highest NPV. A sensitivity analysis determines the impact of key factors on the NPV results. This study aims to inform policymakers, homeowners, and stakeholders of the potential benefits and costs of each of the four pathways to aid them in their decision-making process.

H2-rich syngas generated from forestry waste gasification by recycling hot blast furnace gas

H2-rich syngas injection and decarbonization of blast furnace gas are the main technical routes for achieving low-carbon iron-smelting in the iron and steel industry. In this study, a novel process of H2-rich syngas generated from forestry waste (FW) gasification by hot recycling blast-furnace gas (BFG) is proposed. A model of FW gasification by the hot BFG in an entrained-flow gasifier is constructed using Aspen Plus with a focus on minimizing Gibbs free energy. Meanwhile, the techno-economic analysis of H2-rich syngas generated from FW gasification is also evaluated via taking 36 tones/hr of FW gasification as the objective. The model is experimentally validated with gasification results derived from published studies. The technology analysis reveals that the optimum performance for H2-rich syngas generated from FW gasification by the hot BFG with total energy efficiency of 74.75 % is observed at a gasification temperature of 850 °C, steam/FW ratio of 0.18 kg/kg, and BFG/FW ratio of 2 m3/kg. The economic analysis indicated that the net present value (NPV), payback period (PBR), and internal rate of return (IRR) are in sequence as 336.70 M$, 2.40 yr, and 71.19 % assuming the cost of H2-rich syngas is 0.11 $/Nm3. Meanwhile, 1.67 kg syngas production yield and 1.9 kg CO2 recycled per kg of FW gasification by the proposed process. The proposed process is not only a competitive technology for H2-rich syngas generation, but also an effective strategy to reduce carbon-emitting.

Decision Rules for Corporate Investment

We investigate the decision rules for corporate investment by designing a company value frontier. This company value frontier allows for balancing the financial value and social and environmental impacts. This article develops novel value concepts—ranging from shareholder value to shareholder welfare and integrated value—resulting in varying preferences for social and environmental impacts or values. Next, these preferences are incorporated in investment decision rules. The traditional net present value (NPV) rule optimises only the financial value. We propose a new integrated present value (IPV) decision rule that includes a preference for social and environmental values without neglecting the financial value. By applying the new IPV rule, responsible companies are able to achieve more sustainable outcomes.

Comparative Life Cycle Assessments and Economic Analyses of Alternative Marine Fuels: Insights for Practical Strategies

The growth of the global shipping industry has increased the interest in the environmental impact of this sector. The International Maritime Organization adopted the initial Greenhouse Gas strategy for reducing GHG emissions from ships at the 72nd Marine Environment Protection Committee in April 2018. In this study, we carried out a life cycle assessment of nine production pathways of alternative fuels, including LNG, ammonia, methanol, and biofuels, and conducted an economic analysis considering the life cycle carbon pricing of each fuel pathway. Our results indicate that biomass-based FT-diesel, e-methanol, and e-ammonia are the most environmentally friendly, with GHG reductions of 92%, 88.2%, and 86.6%, respectively. However, our net present value analysis of ship life cycle cost considering carbon price indicated that using those fuels would not be cost-effective during the target period of study. Sensitivity analysis was performed by changing the life cycle carbon pricing from the baseline scenario, and we investigated the approximate years for when these alternative fuels will become more cost-effective compared to conventional fossil fuels. Further, to provide practical implications for shipping stakeholders, we analysed the effect of blending the same kinds of fuels with different production pathways.

The Feasibility Analysis of the Cinnamon (Cassiavera) Farming in the Village of Koto Agung Sub-District Keliling Danau Kerinci Regency

Cinnamon (cassiavera) farming in Kerinci Regency has not been carried out economically. This can be seen from the pattern of cinnamon harvest that has not been carefully planned, some farmers harvest at the age of 20 years or even more, but some farmers harvest cinnamon when the price is high even though the cinnamon plant is still young, namely 5– 8 years. In connection with this situation, the authors encourage the author to examine how the use of costs and income in cinnamon farming. This study aims to determine the general description of Cinnamon (Cassiavera) farming in Koto Agung Village, Keliling Danau District, Kerinci Regency, to determine the amount of cinnamon (cassiavera) farming income in Koto Agung Village, Keliling Danau District, Kerinci Regency, and to determine the feasibility of cinnamon (cassiavera) farming in Koto Agung Village, Keliling Danau District, Kerinci Regency. The analytical method used in this research is descriptive quantitative using farm analysis and the financial feasibility of farming with three investment criteria, including NPV, Net B/C ratio, and IRR. The results of the analysis show that the farming system in the research area is still relatively simple and traditional. The average production of cinnamon (cassiavera) farming is 4,548.4 kg per harvest with an average income of IDR. 170.169.294.00,-. Cinnamon (cassiavera) farming with an average land area of ​ 0.61 Ha in Koto Agung Village is feasible to be cultivated with the results of a business feasibility analysis on the investment criteria of Net Present Value of IDR 215,237,894.00,-, Net B/C Ratio is 4.39, and the IRR is 17.436%.

Towards a biorefinery processing Sargassum seaweed: Techno-economic assessment of alginate and fucoidan production through SuperPro Designer® process simulation

The emergence of Sargassum spp. (brown seaweed) along the coasts of the Mexican Caribbean poses a significant challenge because of climate change, which affects various economic sectors in the region. To address this issue, it is crucial to adopt a comprehensive and multifaceted approach to mitigate its effects and find sustainable solutions. This study focused on exploring the biotechnological potential of Sargassum through a waste upcycling approach, specifically utilizing a biorefinery scheme. The aim of this study was to extract valuable biotechnological products, primarily alginate and fucoidan. Alginate extraction was performed at a laboratory scale and then simulated at an industrial scale (base case) to assess the economic and technical viability. A second approach incorporating fucoidan extraction was evaluated. The simulation results in SuperPro Designer® showed that the base case is not economically viable, with a net present value (NPV) of -$2,736,000 USD, a gross margin of 4.89 %, and an internal rate of return of 2.20 %. This is due to the excessive ethanol solvent use and the low selling price of alginate. However, the second approach is economically feasible, with an NPV of $3,844,000 USD, representing a 3.27-fold increase in the gross margin and a 4.23-fold increase in the internal rate of return. Therefore, including more Sargassum-derived value-added products in the base case scenario can lower the operating costs and initial investment, making the biorefinery process economically viable. These findings emphasize the potential of the biorefinery scheme in addressing Sargassum emergence in the Mexican Caribbean, contributing to sustainable solutions.

Natural convective solar dryer powered by stepped fin plate integrated trough array solar air heater for agricultural produce preservations

In this work, heat energy analysis and economic feasibility of natural convection mixed mode solar dryer under three different methods viz., normal flat plate collector solar dryer (NFPSD), step fin plate integrated trough array collector solar dryer (SFPTSD) and SFPTSD with latent heat storage (LHS) are experimentally investigated. The drying time in SFPTSD – LHS (setup 3) to reach its safe moisture content for paddy, wheat, green chilli are 5.5 h, 6 h and 7 h respectively and it is significantly lowered to a maximum of 47 % as compared with NFPSD (setup 1). Also, the average maximum heat efficiency of 62.19 % for collector and 38.32 % for drying cabinet is obtained in setup 3. The specific heat energy consumption is lowered by 20.65 % and specific moisture extraction rate increases to 21.73 % for this proposed setup in comparison with setup 1. The improvement potential is reduced to a substantial margin of 136.5 W and yields an exergetic efficiency increase of 12.38 % than setup 1. An average annual saving increase of 193.08$ with its present value 94.33$ is achieved for setup 3 as compared with setup 1. We recommend this setup can dry edible produce at low cost and affordable to economically weak farming communities.

Comparative Study of Monte Carlo Simulation and the Deterministic Model to Analyze Thermal Insulation Costs

The main purpose of this paper is to implement a simulation model in @RISKTM and study the impact of incorporating random variables, such as the degree days in a traditional deterministic model, for calculating the optimum thickness of thermal insulation in walls. Currently, green buildings have become important because of the increasing worldwide interest in the reduction of environmental pollution. One method of saving energy is to use thermal insulation. The optimum thickness of these insulators has traditionally been calculated using deterministic models. With the information generated from real data using the degree days required in a certain zone in Palestine during winter, random samples of the degree days required annually in this town were generated for periods of 10, 20, 50, and 70 years. The results showed that the probability of exceeding the net present value of the cost calculated using deterministic analysis ranges from 0% to 100%, without regard to the inflation rate. The results also show that, for design lifetimes greater than 40 years, the risk of overspending is lower if the building lasts longer than the period for which it was designed. Moreover, this risk is transferred to whomever will pay the operating costs of heating the building. The contribution of this research is twofold: (a) a stochastic approach is incorporated into the traditional models that determine the optimum thickness of thermal insulation used in buildings, by introducing the variability of the degree days required in a given region; (b) a measure of the economic risk incurred by building heating is established as a function of the years of use for which the building is designed and the number of years it is actually used.

Process design and techno-economic analysis of activated carbon derived from anthracite coal

Activated carbon (AC), renowned for its versatile applications in water treatment, air purification, and industrial processes, is a critical component in environmental remediation and resource recovery strategies. This study encompasses the process modeling of AC production using anthracite coal as a precursor, involving multiple activation stages at different operating conditions, coupled with a detailed techno-economic analysis aimed at assessing the operational feasibility and financial viability of the plant. The economic analysis explores the investigation of economic feasibility by performing a detailed cashflow and sensitivity analysis to identify key parameters influencing the plant's economic performance, including raw material and energy prices, operational and process parameters. Capital and operational costs are meticulously evaluated, encompassing raw material acquisition, labor, energy consumption, and equipment investment. Financial metrics like Net Present Value (NPV), Internal Rate of Return (IRR), and payout period (POP) are employed, and the results show that AC selling price, raw material cost and plant capacity are the most influential parameters determining the plant's feasibility. The minimum AC production cost of 1.28 $/kg is obtained, corresponding to coal flow rate of 14,550 kg/h. These findings provide valuable insights for stakeholders, policymakers, and investors seeking to engage in activated carbon production from anthracite.