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A cost-effectiveness assessment method and tool for assessing energy efficiency improvements in buildings

1 VTT Technical Research Centre of Finland, P.O. Box 1000, 02044 VTT, Finland
2 Egypt-Japan University of Science and Technology, P.O. Box 179, New Borg El-Arab City, 21934, Egypt
3 Zagazig University, Faculty of Engineering, Zagazig, Zagazig 44519, Egypt

Special Issues: Finance and Sustainability

This paper proposes a method and a tool based on cost-effectiveness analysis (CEA) for assessing energy efficiency improvements in buildings using a case example from Egypt. Commonly used methods for economic appraisal of energy efficiency improvements have shortcomings that warrant the study of alternative methods. To offer avenues for improving the current economic assessment of energy efficiency, methods used in other fields are studied. A chain of argumentation for choosing a suitable method is developed. As a result, CEA appears to be best suited to the problem at hand. It can be used to, first, define the cost of the primary aim of saving energy and, second, allow the comparison of alternative investments in sustainable energy, not limited to energy conservation alone. A case building is studied with a calculation using a CEA method adapted for energy efficiency improvements in buildings to demonstrate the use of the method. In the case studied the CEA calculation produced costs of 0.26–0.60 USD/kWh for energy saved by the energy efficiency investments made. A systematic appraisal of cost-effectiveness of alternative energy efficiency projects would allow pointing out the most effective ones in terms of energy saved per money spent.
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Keywords energy efficiency; cost-effectiveness; economic efficiency; investment; budgeting

Citation: Pekka Tuominen, Francesco Reda, Waled Dawoud, Bahaa Elboshy, Ghada Elshafei, Abdelazim Negm. A cost-effectiveness assessment method and tool for assessing energy efficiency improvements in buildings. Green Finance, 2019, 1(1): 67-81. doi: 10.3934/GF.2019.1.67


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