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Economic Analysis

  • İbrahim Dinçer
  • Calin Zamfirescu
Chapter

Abstract

The future of any energy resource depends on the state of the art of the technology to harvest, convert, and transport it and hence on economic and political factors. The political factors include rules and regulations. The relationships among factors have been studied and characterized during the past century in the context of power plant engineering and regulated utilities. Between energy engineering and economics there is obviously a trade-off because a design achieving high energy generation efficiency is costly and this leads to a high price per unit of energy. On the other extreme, a low-cost design features low efficiency, and hence the cost of energy is high because one needs to spend large amounts of primary energy resources. Somewhere in between a technical–economical optimum of the design can be found.

Keywords

Discount Rate Consumer Price Index Payback Period Renewable Energy System Present Worth 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Nomenclature

A

Levelized annual payment

A/P

Capital recovery factor

c

Specific cost, currency per unit of product

C

Cost, currency

CPI

Consumer price index

D

Depreciation

E

Energy, MJ

F

Future worth

i

Inflation rate

N

Number of years

NP

Payback period, years

NW

Nominal worth of currency

LCC

Life-cycle cost

LCS

Life-cycle savings

LEC

Levelized electricity cost

LF

Levelizing factor

p

Cost of saved energy, currency

P

Present worth, currency

r

Rate of discounting the future

RW

Real worth of currency, currency

t

Taxation, currency per unit of product

T

Tax, currency

y

Year

Greek Letter

η

Energy efficiency

Subscripts

cred

Credit

Dep

Depreciation

Down

Down payment

e

Equivalent

k

Index

N

Number of time periods

pe

Price escalation

per

Real price escalation

prop

Property

r

Real

salv

Salvation

tot

Total

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Copyright information

© Springer Science+Business Media, LLC 2011

Authors and Affiliations

  1. 1.Faculty of Engineering & Applied ScienceUniversity of Ontario Institute of Technology (UOIT)OshawaCanada

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