there is a basic cost benefit analysis of renewable energy. take the financial strategy in simple and lucid way to judge financial acceptability of renewable energy.

1. Presented by:
Malik Sameeullah
M.Tech,RES (3137501)
SCHOOL OF RENEWABLE ENERGY AND EFFICIENCY
NATIONAL INSTITUTE OF TECHNOLOGY, KURUKSHETRA

2. Contents
 Introduction
 Cost Benefit Analysis (CBA)
 Method of Cost Benefit Analysis
 Benefit Cost(B/C) Ratio
 Renewable Energy Technology Parameter
 CBA parameters for Renewable Energy
 Implement of CBA for wind Energy
 Conclusion
 References

3. Introduction
 Concern over global warming has led policy makers to
accept the importance of reducing green house gas
emissions
 Renewable Energy system become quite favorable now a
day because of national and international policies
 Still renewable energy technology is in early stage of
implementation and unit cost of energy is higher than
conventional plant
 But government provide incentive and cost based tariff
to support renewable energy
 Cost Benefit Analysis give a idea about the acceptability
of any renewable energy plant

4. Cost Benefit Analysis
 Cost-Benefit Analysis applied to energy is the appraisal of
all the costs and all the benefits of an energy project taking
account of present and future work
 Cost Benefit Analysis (CBA) is little bit difference than
Social Cost Benefit Analysis
 Cost Benefit Analysis taking account of both financial
benefit analysis and social cost benefit Analysis
Cost Benefit
Analysis
Social Cost Benefit
Analysis
Financial Benefit
Analysis

5. Choice of Cost Benefit Analysis
Decision Making is about choice
 For an Individual: It takes CBA for own benefit and future
prospective. i.e project for employee to make there future
bright.
 For a Company: Being Concerned with the profit earning
capacity and income flow, they take cash flow analysis.
 For the government: Decision making for the government is
always a tough work, as it account for profit and at the same
time working to provide social benefit. This is the reason
because of that government project fail to become financial
viable.

6. Method of Cost Benefit Analysis
 In financial term, there is mainly four way of
evaluating cost-benefit:
1. Benefits/Cost Ratio
2. Net Present Value (NPV)
3. Internal Rate of Return (IRR)

7. Benefits/Cost Ratio


8. 

9. 

10. Type of Benefit-cost ratio


11. Renewable Energy Parameters for C/B Analysis
 The type of parameter for C/B analysis is depend upon the
type of renewable technology
 Here the list which affect the analysis of RET
1. Location of plant
2. Type of renewable energy
3. Technology status
4. Government involvement
5. Availability of technical staff
6. Economical consideration of society
7. Overall objective of installation
8. Climate condition
9. Risk of natural disaster

12. CBA parameters for Renewable Energy
 CBA parameter can be categories on the basis of cost
inflow and outflow
Cost Outflow Cost Inflow
1. Capital cost of plant
2. Annual maintenance cost
3. Unwanted investment due to technology
failure
4. Extra investment due to change in
incentive policy of govt.
1. Benefit by selling energy
2. Social benefit by supplying electricity
in rural area
3. Carbon credit
4. Commitment to ward green
development
5. High rate of return to support
renewable energy (incentive from
govt)

13. Implementation of CBA for wind Energy
 Cost of the system:
1. Land lease cost
2. Turbine installation cost
3. Electrical network up gradation cost
4. Cost of additional reserve requirement
5. Component life maintaining cost
6. Operating cost
 Benefits of the system
1. Capacity benefit
2. Carbon credit benefit
3. Fuel saving benefit
4. Social empowerment benefit in remote area
5. With proper design, multi function land utilization

14. Conclusion
 Most of the renewable energy project are less
economical viable, because of high investment and risk
associated with the project
 But still most of the government interested to increase
the share of renewable energy.
 Overall Cost Benefit analysis of renewable energy show
that they are acceptable.
 Main benefit of renewable energy is that it is clean
form of energy and also socially acceptable and help
government to make a dream true to provide electricity
to village.

15. References
1. Ea Energy Analyses, “Costs And Benefits Of
Implementing Renewable Energy Policy In South
Africa”, August 2011
2. IRENA working paper,“Renewable Energy Technologies:
Cost Analysis Series”, June 2012
3. Eleanor Denny B.A., M.B.S, “A Cost Benefit Analysis of
Wind Power”, thesis report, University college Doublin,
Ireland, 2007
4. Paul Samuelson,“Economics”, McGraw-Hill, 21stEdition