APPLICATION AND IMPORTANCE OF COST-BENEFIT ANALYSIS IN ENERGY EFFICIENCY PROJECTS IMPLEMENTED IN PUBLIC BUILDINGS: THE CASE OF SERBIA

Abstract

The main objective of this paper is to present the advantages of using Cost-Benefit analysis in energy efficiency projects implemented in public buildings, and to prove the hypothesis that Cost-Benefit analysis boosts the effectiveness and efficiency of the said type of projects. The paper offers theoretical and practical explanation of the implementation of Cost-Benefit analysis in the relevant area. Since energy efficiency projects in public buildings usually represent a part of a broader portfolio of similar projects and their implementation demands allocation of substantial financial resources, communities are often be interested in achieving maximal economic and non-economic benefits. This paper aims to demonstrate that Cost-Benefit analysis can represent an excellent contribution when attempting to select the projects for implementation within a broader portfolio of energy efficiency projects in public buildings. This hypothesis was demonstrated by putting a greater emphasis on non-economic benefits and the costs arising from implementation of the aforementioned types of projects. In addition, a practical test of this hypothesis was performed through the implementation of an energy efficiency portfolio in public buildings, worth several tens of millions of dollars - the Serbian Energy Efficiency Project. The paper concludes that the use of Cost-Benefit analysis can help us to effectively evaluate and manage projects of this type aimed at achieving maximum benefits for the community in question.

Keywords

Dates

  • Submission Date2011-09-11
  • Revision Date2012-06-01
  • Acceptance Date2012-06-01

DOI Reference

10.2298/TSCI110911090M

References

  1. ***, Ministry of Mining and Energy, Energy balance of the Republic of Serbia for 2008, Belgrade, 2009
  2. ***, Statistical Office of the Republic of Serbia, Overview of external trade of the Republic of Serbia in the period 1988-2009, Belgrade, 2010
  3. Oka, S., Sedmak, A., Djurovic-Petrovic, M., Energy Efficiency in Serbia - Research and development activity, Thermal Science, 10 (2006), 2, pp. 5-32
  4. ***, Executive council of the Autonomous Province of Vojvodina - Provincial Secretariat for energy and mineral resources, Implementation Programme for Energy Development of the Republic of Serbia in Autonomous Province of Vojvodina (from 2007 to 2012), Novi Sad, 2007
  5. Mihic M., Petrovic D., Vuckovic, A., Possibilities of application of cost-Benefit analysis to energy efficiency projects in buildings, Economic Themes, 49 (2011), 3, pp. 355-378
  6. Mihic, M., Vuckovic, A., Vuckovic, M., Benefits management in energy efficiency projects in public buildings, Management, 17 (2012), 62, pp. 57-65
  7. Ghasemzadeh, F., Archer, N. P., Project Portfolio Selection Through Decision Support, Decision Support Systems, 29 (2000), 1, pp. 73-88
  8. Pohekar, S. D., Ramachandran, M., Aplication of multi-criteria decision making to sustainable energy planning - A review, Renewable and Sustainable Energy Reviews, 8 (2004), 4, pp. 365-381
  9. Meglic, J., Kern, T., Urh, B., Balkovec, J., Roblek, M., Influence of polyvalence professionals on product development process efficiency, Strojarstvo, 51 (2009), 2, pp. 105-121
  10. Jovanovic P., Mihic M., Petrovic D., Investment project decision making methodology in Serbia, Project Management Journal, 3 (2005), 3, pp. 42-48
  11. ***, European commission, Guide to cost-Benefit analysis of investment projects, Brussels, 2008
  12. Mankiw, N. G., Principles of economics, cengage Learning, Mason, OH, USA, 2008
  13. von Neumann, J., Morgenstern, O. Theory of Games and Economic Behaviour. Princeton: Princeton University Press, 1953
  14. Banfi S., et al., Willingness to Pay for Energy-Saving Measures in Residential Buildings, Energy Economics, 30 (2008), 2, pp. 503-516
  15. Boemare, C., Quirion, P. Implementing greenhouse gas trading in Europe: lessons from economic literature and international experiences, Ecological Economics, 43 (2002), 2-3, pp. 213-230
  16. Seppanen O., Fisk W.J, Faulkner D., control of temperature for health and productivity in offices. ASHRAE Transactions 111 (2005), 2, pp. 680-686
  17. PMI Standards committee, A Guide to the Project Management Body of Knowledge, 3rd edition, Newton Square, PA, USA, 2004.
  18. Mihic, M., Petrovic, D., Vuckovic, A., Energy Efficiency Project Portfolio Optimization for Public Buildings, Metalurgia International, 17 (2012), 6, pp. 166-174
  19. Gvozdenac-Urosevic, B., Energy Efficiency and Gross Domestic Product, Thermal Science, 14 (2010), 3, pp. 799-808
  20. ***, The World Bank, Project appraisal document on a proposed credit in the amount of SDR 14,1 million (US$ 21 million equivalent) to Serbia and Montenegro for a Serbia Energy Efficiency Project, Washington D.c. USA, 2004
  21. ***, BDSP Partnership Ltd., Final monitoring report - Serbian Energy Efficiency Project 1 (SEEP 1), London, UK, 2009
  22. ***, Energy Efficiency Agency of Serbia, Knowlton & Hill: Serbian Energy Efficiency Project, component B - Evaluation Report of the First Phase, 2005 and 2006, Belgrade, 2008
  23. ***, Serbian energy efficiency agency, www.seea.gov.rs
  24. ***, The World Bank, www.worldbank.org
  25. ***, European commission, Europe 2020 - A strategy for smart, sustainable and inclusive growth, Brussels, 2010
  26. ***, Directive 2002/91/Ec of the European Parliament and of the council of 16 December 2002 on the energy performance of buildings, Official Journal of the European communities, 04.01.2003.
  27. Oka, S., Sedmak, A., Djurovic-Petrovic, M. National energy efficiency program - strategy and priorities for the future, Thermal Science, 10 (2006), Suppl., 4, pp. 7-16
  28. ***, Energy Law of the Republic of Serbia, Official Gazette of the Republic of Serbia, No. 84/2004, Belgrade, 2004
  29. ***, Ministry of mining and energy of the Republic of Serbia, Energy Development Strategy by 2015, Belgrade, 2005
  30. ***, Government of the Republic of Serbia, National Strategy of Sustainable Development, Belgrade, 2007
Volume 16, Issue 3, Pages915 -929