NEW VISION OF ENGINEERING ECONOMY COURSE (VISION) MODULE 3 LECTURE 7 Cairo, 17 July 2005

JULY 2005TEI OF PIRAEUS2 Case Studies - 2 Objective: Application of the NPV and IRR method Evaluation of a hydro-power station Effect of environmental parameters on an energy investment implementation Comparative assessment of a nuclear and a RES-based power station

JULY 2005TEI OF PIRAEUS3 Problem Statement (1) What? Where? Why? How big? in Greece a small hydro power plant (scale economy, funding) for a private investment

JULY 2005TEI OF PIRAEUS4 Problem Statement (2)

JULY 2005TEI OF PIRAEUS5 Initial Cost

JULY 2005TEI OF PIRAEUS6 Annual Revenues

JULY 2005TEI OF PIRAEUS7 Viability Analysis-IRR Prediction(1)

JULY 2005TEI OF PIRAEUS8 Viability Analysis-IRR Prediction(2)

JULY 2005TEI OF PIRAEUS9 Initial Cost Impact on IRR

JULY 2005TEI OF PIRAEUS10 State Subsidization Impact on IRR

JULY 2005TEI OF PIRAEUS11 Effect of Environmental Parameters on the Possibility of an Energy Investment Implementation

JULY 2005TEI OF PIRAEUS12 Session Objective to Demonstrate the Environmental Impact of the Operation of Power Plants to Present the Social and Environmental Cost of Energy

JULY 2005TEI OF PIRAEUS13 Are New Power Plants Necessary ? The worldwide Rate of Energy Demand Increases by 4% per annum. The Increase is Driven by the Developing Countries and the USA. The Central/Northern European Countries have Almost Stabilized their Demand. In the Mediterranean Region this Rate Ranges Between 3-10%.

JULY 2005TEI OF PIRAEUS14 We Need New Power Plants in order to: Cover the Increased Energy Consumption Meet the Increased Peak Demand Replace Old Power Plants Exploit New Sources of Energy

JULY 2005TEI OF PIRAEUS15 Why do we care about Environmental Impact Assessment ? The Energy Plants have Major Environmental Impacts Public Reaction to an Investment can Cancel its Realization Strict / Complicated Environmental Legislation Pollution Control Leads to Savings in Energy and Materials through better Management Environmentally Friendly Projects are a Potential Subsidization Source

JULY 2005TEI OF PIRAEUS16 Environmental Indicators Sectors of the Environmental Impact Assessment: Natural Resources Exploitation Pollution Environmental Hazards or Disturbance

JULY 2005TEI OF PIRAEUS17 Natural Resources Exploitation Renewable Energy Sources Precipitations Solar Radiation Wind Biomass Waves Non Renewable Energy Sources Oil Coal Natural Gas Nuclear Fuels

JULY 2005TEI OF PIRAEUS18 Pollution Air Pollutants Emissions that cause: Global Warming Ozone Layer Depletion Aquatic and Soil Acidification Aquatic and Soil Eutrofication Hazards to Humans and Ecosystems Health

JULY 2005TEI OF PIRAEUS19 Environmental Hazards / Disturbance Land usage for Buildings or Roads Noise Smell Radiation

JULY 2005TEI OF PIRAEUS20 External Cost of Energy Social Cost Public Health Environmental Cost Restoration of Natural Ecosystems Exploitation of Natural Resources State Subsidies Fuel Subsidies Auditing & Control of Environmental Parameters

JULY 2005TEI OF PIRAEUS21 NIMBY Syndrome in Energy Plants Not In My Back Yard People Want the Comforts of Electricity Don’t Want the Power Plants Disturbance Strong Public Opposition May Cause The Cancellation of Power Plants

JULY 2005TEI OF PIRAEUS22 Quantitative Approach Basic Figures Presenting Mean Values for Comparison Purposes Carbon Dioxide CO 2 Sulfur Dioxide SO 2 Nitrogen Oxides NO X Land Use

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JULY 2005TEI OF PIRAEUS27 Comparative Assessment of a Nuclear and a RES-based Power Station Case Study : Wind vs Nuclear Power Station in the Aegean Sea Region

JULY 2005TEI OF PIRAEUS28 Problem Description Greece and Turkey are Both Fast Developing, Mediterranean countries. Annual Electricity Demand Growth is 4% and 10% respectively for Greece and Turkey. Both Countries Have to Control their Air Emissions in order to Comply to the EU Directives. Nuclear and RES are the possible solutions

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JULY 2005TEI OF PIRAEUS30 Why RES in the Aegean Region? Reliable Solar Potential even in Winter Excellent Wind Potential High Enthalpy Geothermal fields Decentralized Energy Generation Independence of Imported Fuels Significant EU Subsidization

JULY 2005TEI OF PIRAEUS31 Factors Against RES Low Energy Density (W/m 2 ) Leads to Extended Land Use Seasonal and Diurnal Variation of Energy Availability Makes Imperative the Use of Large-Scaled Energy Storage Systems High Initial Investment Cost

JULY 2005TEI OF PIRAEUS32 Why Nuclear Energy ? Reliable Electricity Supply without Time Variation Relatively Low Operational Cost High Energy Density Leads to Limited Land Use (fuel mines excluded)

JULY 2005TEI OF PIRAEUS33 Factors Against Nuclear Energy High Initial Investment Cost (financing constraints) No Safe Method of Nuclear Waste Disposal Enormous Heat Waste to the Nearby Environment Technology Dependence for Developing Countries Wide Range of Negative Consequences in Case of Major Accidents

JULY 2005TEI OF PIRAEUS34 Economic Cost Comparison

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JULY 2005TEI OF PIRAEUS36 Social Cost Comparison NUCLEAR ENERGY Accident Risk Cost Possibility ranges Between 1 / 2000 – operational years Total distraction of the Natural Environment in a very wide Distance Normal Operation Cost Minor Radiation Releases Not Safe Final Disposition of Nuclear Waste

JULY 2005TEI OF PIRAEUS37 Social Cost Comparison WIND ENERGY Noise Emissions Long Distance Visual Impact Extensive Land Use Bird Mortality

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JULY 2005TEI OF PIRAEUS39 Conclusions RES and NUCLEAR are Potential Solutions to: meet Energy Demands Control Greenhouse Gas Emissions The Analysis made Clear that Wind Energy is Preferable: Environmental-Wise Economically-Wise (under Conditions)