Overview:

Aims of the WP:

• To understand the key parameters of industrial polygeneration projects from an industrial company standpoint, in particular the correlation between input (fuel) prices, risk adjustment and project appraisal techniques. To help companies value the flexibility offered by polygeneration.
• To understand industrial project financial evaluation methodologies from market analysts’ standpoint
• To understand the evaluation methodologies from energy service companies (ESCOs)
• To assess innovative financial and risk management options/approaches [natural gas price subjective probabilities / risk-adjusted discount rates]
• To help delimit the grey areas where lack of transparency and information has adverse effects on project economics
• To contrast technical, economical and financial evaluations of industrial polygeneration projects
• To understand the key parameters of industrial polygeneration investment decisions for large projects
• To assess innovative financial approaches/instruments 

Tasks: 

• Creation of a flowchart detailing the steps an industrial polygeneration project goes through before being given the go-ahead by a company. This will focus mainly on technical and economic dimensions, but will include also financial appraisal, although this latter issue will be dealt with in greater length in another task.
• To contrast the financial project appraisal methodologies used by industry, energy service companies, utilities and financial institutions. All D-ploy partners will contribute to this task. A questionnaire may be prepared and circulated through the D-ploy team, the Advisory Committee and via national polygeneration associations.
• Using the financial project appraisal comparison, the project will seek to highlight the key differences between the different financial appraisal methodologies with a view to determine if convergence is possible, and if so what are the conditions for converging appraisal methods (e.g. is better market information required?).
• To look at fuel price fluctuations and assess the opportunities open to industrial actors (in this case including utilities and ESCOs) to mitigate price fluctuations using financial instruments (or contractual dispositions).