Development of an ESCO Risk Assessment Model as a Decision-Making Tool for the Energy Savings Certificates Market Regulator: A Case Study
Source abstract
Abstract
This article is focused on developing an Energy Service Company (ESCO) risk assessment model for use by energy savings certificates (ESC) market regulators. This model enables market regulators to determine the appropriate point in time for ESCOs to sell their certificates with the aim of minimizing risk as well as maximizing economic gain yet remain motivated for reducing the cost of energy efficiency technologies. To this end, the interactions between an ESCO and other parties (such as suppliers) in the market in addition to the principles of the energy efficiency performance contract are taken into consideration. Then, appropriate probability distributions have been fitted to the stochastic variables to be applied in the Net Present Value (NPV) function, based on sampled company data. A case study considers a one MW Organic Rankine Cycle (ORC) implementation in Iran’s petrochemical industry. The finding of this study shows if the ESCO is allowed to sell the certificates during the first seven years as well reduce 30% of the investment cost, the expected Net Present Value over Investment Cost (NPV/I) savings will cover more than one cycle.
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Research context
OpenAlex topics: Energy Efficiency and Management · Capital Investment and Risk Analysis · Global Energy and Sustainability Research
SciVX discovery tags are terminology-based. OpenAlex topics are source-provided classifications.
Affiliations
Department of Energy Engineering, Sharif University of Technology, Tehran, P.O. Box 14565-114, Iran
M. E. Rinker Sr. School of Construction Management, University of Florida, P.O. Box 115703, Gainesville, FL 32611, USA
CUIRE, Department of Civil Engineering, The University of Texas at Arlington, P.O. Box 19308, Arlington, TX 76019, USA
SWIS, Department of Civil Engineering, The University of Texas at Arlington, P.O. Box 19308, Arlington, TX 76019, USA
Lyle School of Engineering, Southern Methodist University, P.O. Box 750339, Dallas, TX 75275, USA
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