Cost effectiveness of individual heat cost allocators in Croatian buildings

Commissioned by: Ministry of Environmental Protection and Energy
Project duration: March 14, 2017 – April 24, 2017
Project manager: Davor Mikulić, PhD
Collaborators: Dubravka Jurlina Alibegović, PhD, Ivan Žilić, PhD, Sunčana Slijepčević, PhD, Kristijan Horvat

Brief outline: 
The overall goal of the project was the assessment of cost effectiveness of heat cost allocators (HCA) applied in buildings which used district heat energy from central heating systems. Effectiveness was estimated separately for different scenarios and locations and was based on the following indicators: Net present value (NPV) and Return period of investment in HCA. 

Expected output of the project was the assessment of cost effectiveness for each location (8 Croatian towns) for which the Ministry of Environmental Protection and Energy provided data sampled from heat companies on consumption of heat energy and which satisfied minimum quality standards necessary to calculate energy savings. Cost effectiveness was assesed separately for each location according to 2 main scenarios in additional set of 6 alternative savings. Calculations presented results in two variants (investments in minimum and maximum set equipment). 

Project activities: 
  • to estimate savings according to alternative methodologies
  • to estimate investment costs for different variants (investments in minimum and maximum set of equipment)
  • to estimate annual operative costs for different variants of investments
  • to assess cost effectiveness in terms of net present value and return period of investment  
Two different methods were applied in the estimation of savings related to heat allocators: comparison of heat energy consumption (standardised by heating degree days) before and after investment in HCA and savings estimated by econometric model. Capital and operational costs were based on actual market values for individual equipment and other items. An expert in thermodynamics was outsourced in order to verify description and prices of each individual item included in total investment value. Calculation of net present value and return period was based on modified financial cost benfit analyses as specifies in EN 15459 standard.