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Analysis of ECO-Efficiency and Economic of an Energy Conversion Project in PT X

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The purposes of this study are two folds. The first is to evaluate effectiveness of company investment to energy conversion project from fuel oil and LPG into Natural Gas (NG) in PT. X. The second purpose is to evaluate the impact of energy conversion to environment which was not included in the project proposal. Net Present Value (NPV), Internal Rate of Return (IRR) and Payback Period (PP) are used as investment appraisal tools with sensitivity evaluation such as appraisal on fuel price and production rate changes. Eco-efficiency which represents the impact to environment is calculated by comparing product's value over load to environment. Product's value is represented by product volume and load to environment is represented by CO2 emission. Non-Product Output (NPO) analysis method was usedto identify the non-product output by value and volume. By using 31.8 % production rate, the calculation was resulted at NPV is equal to 0, IRR 18 % and PP 5 years, while at 100 % production rate the NPV is USD 1,536 million, IRR 102 % and PP 1 year. Therefore the investment is effective when production rate is 31.8 % or higher. Eco-efficiency is decreased from 4.76 to 4.69 or equal to 1.47 % which caused by increasing of carbon dioxide emission. The analysis show that energy consumption of natural gas for each metric ton product (1.91 MMBTU/MT) is almost 23 % higher than energy consumption from fuel oil plus LPG (1.47 MMBTU/MT). This eco-efficiency reduction does not meet the expectation so it is recommended to conduct further evaluation such as root-cause analysis.

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M00141

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Series Title

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Call Number

141

Publisher

: Swiss German University., 2008

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Language

English

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Subject(s)

MBA

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