Scenarios that promote the economic and financial feasibility of Energy Efficiency projects

LIFSCHITZ, AYELEN SUSANA; DE ANGELO, CRISTIAN HERNAN; DONOLO, PABLO DANIEL; CHIACCHIERA, ELIANA; PEZZANI, CARLOS MARTIN

Resistencia, Chaco

Congreso; 2020 IEEE Congreso Bienal de Argentina (ARGENCON); 2020

IEEE Argentina

The electrical energy consumed in the production process represents an important component of the cost of the product offered (or the service provided) for the industries. This implies that, to be competitive, companies must carry out actions that help to minimize them, such as considering measures that favor the efficient use of energy. Faced with this problem, in this article we propose to determine the conditions that must be met for medium-sized energy efficiency projects to be economically and financially viable in Argentina. To do this, we first construct a cash flow using the Net Present Value (NPV) as an evaluation criterion. However, the result obtained from NPV makes it possible to measure the viability of the energy efficiency project when only one of the many possible future scenarios is considered. Therefore, in order to construct a table of possible situations that lead to the feasibility of the project, it is necessary to consider eventual changes in more than one variable. Thus, in addition to the NPV calculation, we carry out a sensitivity analysis by varying the discount rate, the cost savings due to lower energy and power consumption, and the initial investment. As a result, we provide a useful frame of reference on the conditions that must be met in order for energy efficiency investments to be economically and financially feasible. Through this analysis, we find out that the actual economic circumstances in Argentina present barriers to the energy efficiency investments.