Page 180 - Sustainable On-Site CHP Systems Design, Construction, and Operations

CHP Economic Analysis 153

Project Cost ($) NPV of Annual Costs ($) Total Present Cost ($)
9,000,000 28,850,000 37,850,000

TABLE 9-6 Sample LCC Calculation Results

Note that the sum of the annual costs is nearly $48 million, but the future value is
discounted to the amount shown in Table 9-5. The total present costs of an alternative
would then be compared with that of other alternatives to determine the alternative
with the lowest LCC.

Determining Appropriate Escalation Rates
Various Federal Energy Management Building LCC (BLCC) Programs can be readily
accessed via the Internet at http://www1.eere.energy.gov/femp/information/down-
load_blcc.html#eerc and can be a great resource for determining appropriate energy
escalation rates, including free downloadable software that calculates appropriate
energy escalation rates individually, and in a table format if needed. Some local public
utility commissions also conduct fuel and electricity pricing forecast studies that are
available to the public.

Reference
Maor, I., and T. Reddy, 2008. Near Optimal Scheduling Control of Combined Heat and
Power Systems for Buildings, Research Project 1340-RP, American Society of Heating,
Refrigerating and Air-Conditioning Engineers, Atlanta, GA.