Economic analysis of the modernization of heat sources

Replacement of coal boilers with gas-fired heat sources brings a broad range of environmental benefits. On the other hand, the decision to build a gas-fired boiler must be taken after a thorough analysis of investment.

Generally, for the calculation of the economic efficiency of the conversion of coal-fired boilers to gas-fired boilers, accepted methods of investment evaluation are used. Commonly used indicators include net present value (NPV), internal rate of return (IRR). Rating investment can be expanded with an analysis of indicators of profitability and liquidity such as the profitability of sales, gross and net profitability, return on capital expenditures and interest cover profit.

The economic analysis carried out by the Fluid Systems Ltd. includes:

• statement of cash and calculation of NPV and IRR,
• statement of total production costs,
• analysis of cash flows,
• Loan-associated calculations,
• working capital requirements,
• Profit and Loss Account,
• Parameters for assessing the investment.

The technology used in many countries and generating widespread economic and environmental benefits is a Combined Heat and Power - CHP called cogeneration based on gaseous fuels. Thanks to significant advances in the construction of gas engines and gas turbines combined economy has become a rational solution for a wide group of consumers. Just as the construction of gas boiler decisions on the construction of power plants must be taken after analysis of the profitability of investments.

The economic efficiency of small and medium-sized cogeneration units is estimated based on:

• technical parameters of the system,
• capital expenditures,
• the selling price of electricity,
• selling price of heat,
• utilization of the system,
• the price of gas,
• other cost elements, e.g. maintenance costs and repairs.