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  • Class and Course

    Cost-Benefit Analysis (CBA) of Energy Projects

    This course helps the energy industry managers and executives to better use the tool commonly referred to as “cost-benefit analysis” or CBA. As a formal assessment of an organization’s project costs and benefits, CBA attempts to measure and compare the efficiency of project options. This type of analysis has become standard practice in project analysis and program evaluation—particularly in cases where there are new strategic or capital investments. The goal of the course is to provide the participants with the conceptual foundations and practical skills they will need to be thoughtful consumers and producers of CBA.

    The class will draw on qualitative, quantitative, and analytic skills. As a practical matter, a basic familiarity with the energy industry, microeconomic theory, statistics, and algebra is assumed.

    Day 1

    Introduction to Cost-Benefit Analysis (CBA)

    • Introduction to CBA
    • Uses of CBA in Planning & Evaluation
    • Measures Used in CBA
    • Measuring Intangibles
    • Challenges Conducting CBA

    Course participants will learn about basic issues and practices in CBA.

    Day 2

    The CBA Process

    • Basic CBA Process
    • As-Is and the To-Be
    • Alternative Systems
    • Measures in CBA: Return on Investment (ROI)
    • Measures in CBA: Internal Rate of Return (IRR)
    • Measures in CBA: Net Present Value (NPV)
    • Measures in CBA: Benefits Cost Ratio (BCR)

    Course participants will learn about the CBA process, systems and practice applying different measures used in CBA.

    Day 3

    CBA Application IssuesBenchmarking Measures in CBA

    • Benchmarking Measures in CBA
    • Sensitivity Analysis
    • Risk and Uncertainty in CBA
    • Writing the CBA Report
    • Comparison to Cost-Effectiveness Analysis (also called a Least-Cost Analysis)

    This section will show course participants how to apply CBA in current energy industry environments.

    Day 4

    Advanced CBA Topics: Limitations and Comparisons

    • Direct Versus Indirect Costs
    • Future Costs
    • Discounting
    • Best Practices in CBA
    • Program Evaluation & Comparison of Projects

    Participants will also have the opportunity to learn about advanced topics in CBA including determining how to include real world limitations and comparisons in CBA.

    This course is intended for employees who are in a management, technical or executive position with an energy company.

    None

    Currently there are no scheduled classes for this course.

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