Ranking factors of an investment in cogeneration: Sensitivity analysis ranking the technical and economical factors

Abstract

SUMMARYA deregulation of the electricity market in Europe will result in increased competition among the power-producing companies. They will therefore carefully estimate the "nancial risk in an investment in new power-producing capability. One part of the risk assessment is to perform a sensitivity analysis. This paper presents a sensitivity analysis using factorial design, resulting in an assessment of the most important technical and economical factors a!ecting an investment in a gas turbine combined cycle and a steam cycle "red by woodchips. The study is performed using a simulation model that optimizes the operation of existing power plants and potential new investments to ful"l the desired heat demand. The local utility system analysed is a Swedish district heating system with 655 GWh y\ heat demand. The conclusion is that to understand which of the technical and economical factors a!ect the investment, it is not su$cient to investigate the parameters of the studied plant, but also the parameters related to the competing plants. Both the individual e!ects of the factors and the e!ect of their interaction should be investigated. For the energy system studied the price of natural gas, price of woodchips and investment cost have the major in#uence on the pro"tability of the investment.

Sensitivity analysis of investments in the pulp and paper industry On investments in the chemical recovery cycle at a board mill

“…Using a fractional factorial design method enables the number of experiments to be reduced dramatically by disregarding interactions not having any distinguishable effect. Different design plans have been developed for this purpose and have been applied to various problems (Box et al, 1978;Sundberg, 2001). In this study, a design plan has been used that takes into account only main effects and twofactor interactions.…”

Diffused introduction of Organic Rankine Cycle for biomass-based power generation in an industrial district: a systems analysis

“…Also, mixed-integer linear programming (MILP) has been used at regional or municipal level (see e.g. Sundberg, 2001), when it is advisable to use integer variables, beside continuous ones, to model inherently discrete phenomena. MILP has often been applied also to optimize energy supply to smaller systems, such as, for instance, single factories (Bojic and Dragicevic, 2002).…”