Abstract
This chapter presents utility models and project selection criteria for energy and district heating related investments. Utility models are key for attracting investment of different sources for large scale projects. In these cases, guarantees are typically required, which are typically a mixture of stable business environment and liability from public sources. The correct selection of projects requires of a mixture of economic and social criteria, which is typically specific to each site, and is transposed into a set of metrics and performance criteria.
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Notes
- 1.
i.e. renewable energy systems such as solar thermal & photovoltaics and heat pumps, and even traditional natural gas boiler systems.
- 2.
Large solar thermal, heat pumps (potentially with renewable/very cheap electricity), etc.
- 3.
This criterion is found under various names, here are some: pay off period, cut-off period, recoupment period, pay-back period, pay out period.
- 4.
Thus, depending on the size of the discount rate, some limit may be drawn in the future from when the results will have very little effect on the total present value. For discount rates over 10%, this is probably a period of 25Â years. For example, at a discount rate of 14%, the result obtained in the year 50 will have a present value of 0.1% of its nominal amount.
- 5.
Social opportunity costs are a measure of the social value of the next best alternative use of investment funds.
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Vujnović, M., Gebrail, G., Bogdanovic, B., Garay-Martinez, R. (2022). District Energy: Investment Project Appraisal. In: Garay-Martinez, R., Garrido-Marijuan, A. (eds) Handbook of Low Temperature District Heating. Green Energy and Technology. Springer, Cham. https://doi.org/10.1007/978-3-031-10410-7_9
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