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Coursework assessment Engineering Management 6465ELE

For this assessment you must submit:

(1) A written report (of approximately 4,000 words) and

(2) The Excel spreadsheet (which will be given to you) with your cash-flow analysis, and Monte Carlo simulation, and emissions calculations.   

The submission date is Monday 4 December.

1. Background

A medium-sized manufacturing company aims to enhance its energy efficiency by implementing a Combined Heat and Power (CHP) system. The primary objectives of this initiative are to decrease energy expenses and reduce the company's greenhouse gas (GHG) emissions. To assess the current energy consumption and identify potential areas for improvement, the company has conducted an energy footprint analysis for its plant. The energy footprint analysis encompasses several tables:

· Table 1: Energy supplied to the plant This table provides an overview of the energy received by the manufacturing plant from external sources.

· Table 2: Onsite generation of energy, including the proposed CHP system This table outlines the energy produced through onsite generation methods, including the proposed CHP system. It demonstrates the potential contribution of the CHP system to the company's energy production.

· Tables 3 and 4: Process and non-process energy consumption Table 3 presents a breakdown of the energy consumed within the manufacturing processes, Table 4 energy utilised for non-process purposes.

Table 1.

Table 2.

Table 3.

Table 4.

2. Assignment

1. The manufacturing plant is situated in a business park 1 km from a residential area. It operates 5 days a week using 2 x 8-hour shifts. For the proposed new CHP installation, review the relevant technical literature and data sources and assess select the type of CHP plant type and specifications including the power rating, noise output, GHG and non-GHG emissions for this application.  

2. The company has set aside a budget for the proposed new CHP installation, which is summarised in Table 5. The two main financial uncertainties are the price of energy supplied natural gas and electricity. Table 6 shows the company’s assessment of the range of possible prices over the 5-year payback period.

Table 5.

i. Undertake a cashflow analysis and evaluate the projects financial viability based on a discount rate of 10%. The company aims to recover the cost of investment within 5 years and achieving an internal rate of return (IRR) of 6%.

ii. The company aims to purchase the CHP plant from a supplier who will design, install, and commission a complete system. Undertake qualitative risk assessment for the project.    

iii. Conduct a quantitative risk assessment of the project's financial viability by employing a Monte Carlo simulation to evaluate the impact of energy price variations.

3. Estimate the environmental costs and benefits of the installation and quantify the percentage contribution the plant will make to reducing the company's Scope 1, 2, and 3 greenhouse gas (GHG) emissions.

4. The energy audit apportioned power consumption under the heading machine drives to specific applications shown in Table 7. Develop an outline proposal that your manager can include in the next year's budget focused on further reducing energy consumption and greenhouse gas (GHG) emissions. 

Table 7.

5. The ‘CHP supplier company’ agrees with an ‘Energy Company’ to equip its other 3 factories with Combined Heat and Power (CHP) systems for an agreed price within eight (8) months.  The work takes twenty- two (22) months and costs ‘CHP supplier company’ more than they had planned; this was due to a shortage of equipment as well as a shortage of labour.

Does ‘CHP supplier company’ have grounds to claim that the contract is frustrated?

Yes or No, and why?  In your answer you should: 1. explain what constitutes frustration and 2. analyse the legal consequences of frustration in contract law.

You should also take into consideration relevant legislation and Case Law.