The role and impact of costing methods in determining the viability of energy systems. (December 2022)

• Record Type: Journal Article
• Authors: Jamil, Shah Rukh; Waqar, Muhammad; Shahzad, Muhammad Kashif
• Is Part Of: Energy conversion and management. X. Volume 16(2022)
• Publication Date: 2022-12
• Subjects: Energy systems -- Cost-based decision making -- LCOE -- Benefit-cost ratio (BCR) -- Heat pumps
• DOI: 10.1016/j.ecmx.2022.100303
• Languages: English
• ISSNs: 2590-1745

Abstract

Highlights: The concept and influence of choosing a costing method is put forward. The BCR method is compared with the LCOE method to familiarize with a sustainable energy economics approach. Case study of a heat pump was carried out to choose a suitable working fluid. The results have shown that the BCR method is more feasible and adaptable as compared to LCOE. Abstract: Costing method plays a vital role in assuring the feasibility of any project. When we talk about energy systems, many factors influence the decision making process, which are directly or indirectly associated with socio-enviro-economic benefits. While talking about the associated benefits, appropriate costing approach can significantly absorb the concerned factors. In this context, economics is one of the relevant factors which comes to mind while choosing a right working fluid for thermodynamic cycles if consider this as a test case. Although a wide variety of relevant approaches is available. However, the literature points out the shortcomings, validity and limitations of available costing methods. Out of them, levelized cost of energy (LCOE) is considered a well-known costing method, which has received many criticisms in this regard. On the other hand, this work proposes the concept of employing benefit-cost ratio (BCR) analysis as an alternative costing tool to select suitable working fluids for thermodynamic cycles. This work compares and evaluates the effectiveness, openness and understanding of both methods. For in-depth analysis, a heat pump system as a case study is adopted to select the suitable working fluid. The study is further supported by considering multiple scenarios. Results of this study have shown very interesting outcomes, where one method lagging the other and vice versa. The results have shown the impact of thermophysical properties of different working fluids and their influence on overall economics of the system.