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6304MECH/6365ELE Industrial Management

发布时间：2023-11-09

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Coursework assessment Industrial Management

6304MECH/6365ELE

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 11 December (23.59 HRS) on Moodle.

1. Assignment brief

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.

	Electricity	Gas	Fuel oils
Energy supplied (MWh)	450	322	28

Table 1.

	Gas	Electricity	Heat
Onsite generation (MWh)
Conventional boilers	48		38
CHP-cogeneration	28	4	16

Table 2.

	Electricity	Gas	Fuel oils	Heat
Process energy (MWh)
Process heating	33	90
Cooling refrigeration	12	0
Other	8	10	15
Machine drives	212	0

Table 3.

	Electricity	Gas	Fuel oils	Heat
Nonprocess energy (MWh)
Facility HVAC	95	146		40
Facility lighting	61
Other	15		8
Onsite transport	3		5

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. REQUIRED: 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.

Item	Cost
Capital cost of the CHP plant and equipment	£50,000
Installation	£25,000
Annual operation and maintenance costs	£4,500

Table 5.

Electricity	Cost £ per kWh	Gas	Cost £ per kWh
Minimum price	0.13	Minimum price	0.029
Most likely price	0.31	Most likely price	0.095
Maximum price	0.40	Maximum price	0.15

Table 6.

i. REQUIRED: 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. REQUIRED: Undertake qualitative risk assessment for the project.

iii. REQUIRED: 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. REQUIRED: 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. REQUIRED: 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.

Pumps	10 %
Fans	17 %
Compressed air	16 %
Materials handling	53 %

Table 7.

Grading criteria

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.

(20 marks)

· Thoroughness of literature review and the credibility and reliability of the selected technical literature and data sources

· Identification of application-specific requirements: Determine whether the specific requirements of the application, such as power demand, heat demand, and operational constraints, have been clearly defined and understood.

· Assessment of CHP plant types: Evaluate the analysis of different CHP plant types (e.g., reciprocating engines, gas turbines, steam turbines) in terms of their suitability for the application based on efficiency, reliability, and operational characteristics.

· Justification of plant type selection: Determine if there is a clear rationale provided for selecting a specific CHP plant type over others.

· Calculation of power rating: Assess the accuracy and appropriateness of the chosen CHP plant's power rating based on the application's power demand and possible load profile.

· Evaluation of noise output: Consider the analysis of noise requirements and the selection of a CHP plant with appropriate noise output levels that comply with regulatory standards and site-specific considerations.

· GHG and non-GHG emissions assessment:

Undertake a cashflow analysis and evaluate the project’s 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%.

(20 marks)

· Calculation of savings

· Clarity and organisation of the cash flow analysis and financial evaluation, ensuring that calculations and assumptions are clearly presented and well-structured.

· Correct application of discount rate to calculate NPV and interpretation of results.

· Correct calculation of IRR and interpretation of IRR results

· Analysis and summary address the specific requirements such as the 10% discount rate, 5-year cost recovery objective, and 6% IRR target.

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.

(20 marks)

· Identification of potential risks: Assess the completeness of identifying project-specific and external risks related to the purchase, design, installation, and commissioning of the CHP plant.

· Risk analysis: Evaluate the analysis of risk impacts and probabilities, prioritizing risks based on their potential consequences.

· Risk mitigation strategies: Assess the proposed measures to mitigate identified risks, considering their feasibility, adequacy, and alignment with project objectives.

· Monitoring and contingency plans: Evaluate the proposed mechanisms for monitoring risks and the existence of contingency plans to address unforeseen events or risks.

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.

(20 marks)

· Incorporate probability distributions into the spreadsheet.

· Proper implementation of the simulation, generating random samples for each variable. Enough iterations (e.g., 10,000) for robust results.

· Accurate calculation of financial metrics (e.g., NPV, IRR, payback period) for each iteration.

· Use of appropriate financial formulas and models.

· Comprehensive analysis and interpretation of simulation results.

· Assessment of the impact of energy price variations on financial viability.

· Incorporation of sensitivity analysis to evaluate project resilience.

· Clear interpretation of sensitivity analysis results.

· Communication and presentation: Clear and concise presentation of the risk assessment methodology and results.

· Effective communication of risks and uncertainties associated with energy price variations.

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

(10 marks)

· Accurate estimation of environmental costs associated with the plant's installation, operation, and decommissioning.

· Quantification of environmental benefits, including energy savings, GHG emissions reduction, and other positive impacts.

· Accurate calculation of the plant's percentage contribution to reducing Scope 1, 2, and 3 GHG emissions.

· Consideration of baseline emissions, projected emissions with the plant, and resulting reduction percentage.

· Comprehensive consideration of emissions from the company's operations, supply chain, and customer use within Scopes 1, 2, and 3.

· Use of reliable data sources and methodologies for estimating environmental costs, benefits, and emissions reduction.

· Appropriate citation and referencing of data sources used in the assessment.

· Consideration of sensitivity analysis to assess the impact of uncertainties or variable changes on estimated costs, benefits, and emissions reduction.

· Clear and concise presentation of estimated costs, benefits, and emissions reduction.

· Effective communication of the plant's contribution to overall GHG emissions reduction efforts.

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.

(10 marks)

· Concise list of potential measures to reduce energy consumption and GHG emissions, addressing identified areas in the energy audit.

· Consideration of feasibility, cost-effectiveness, and potential impact of each proposed measure.

· Highlight any additional benefits resulting from energy reduction measures.

· Brief outline of the steps for implementing the proposed measures, including key milestones and responsible parties.

· Proposal for monitoring systems to track energy consumption and GHG emissions.

· Consideration of periodic reviews and assessments to evaluate measure effectiveness.

· Summary of estimated budget requirements for implementing the proposed project.

· Mention potential cost savings resulting from energy reduction measures.

· Clear and concise presentation of the proposal, ensuring alignment with given requirements and guidelines.