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Economic Feasibility Analysis of the Metropolitan Area Green Heat Project
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  • Journal title : Journal of Energy Engineering
  • Volume 24, Issue 1,  2015, pp.32-41
  • Publisher : The Korea Society for Energy Engineering
  • DOI : 10.5855/ENERGY.2015.24.1.032
 Title & Authors
Economic Feasibility Analysis of the Metropolitan Area Green Heat Project
Kim, Sang-Kee; Kim, Lae Hyun; Yoo, Seung-Hoon;
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 Abstract
The Metropolitan Area Green Heat Project (MAGHP), which collects unused heat gathered from power plants, steel works, landfills in western Metropolitan area and distribute it to integrated energy business (IEB) companies, is proposed for the purpose of enhancing energy efficiency and providing low-price heat for IEB companies. Therefore, in order to decide on whether to initiate the MAGHP, the economic feasibility analysis of the project is widely demanded. This paper attempts to consider and measure four economic benefits: heat supply benefit, production cost reduction benefit, greenhouse gas mitigation benefit, and air quality improvement benefit. In addition, the paper tries to conduct the economic feasibility analysis. The project requires three-year investment and thirty-year operation. Three important findings emerge from the analysis. First, its net present value is computed to be 1,269 billion won and more than zero. Second, its benefit/cost ratio is calculated to be 1.72 and bigger than 1.0. Third, its internal rate of return is estimated to be 24.26% and larger than the social rate of return, 5.5%. In conclusion, the MAGHP is socially profitable and should be conducted immediately.
 Keywords
Metropolitan Area Green Heat Project;unused heat;economic feasibility;integrated energy business;economic benefits;
 Language
Korean
 Cited by
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