The business case depends on the charging energy price, heat demand and temperature, efficiency, losses, operating hours and the value of the heat or power delivered — not just the cost of tanks and media.
Heat-as-a-Service and BOO models let industries buy heat or steam per unit with no upfront capital.
Key facts
- Metrics
- LCOH, LCOS, NPV, IRR, DSCR
- Models
- 11 commercial structures
- Revenue
- Heat, steam, power, savings
- Caution
- Define the system boundary
Commercial models11
- CAPEX supply — Equipment supplied against capital purchase
- DEP — Design, Engineering and Procurement
- EPC turnkey — Single-point responsibility to handover
- EPCM — Engineering, Procurement and Construction Management
- BOO — Build-Own-Operate
- BOOT — Build-Own-Operate-Transfer
- Energy-as-a-Service — Customer pays for delivered energy
- Heat-as-a-Service — Customer pays per unit of heat or steam
- Utility outsourcing — Industrial heat utility run by a third party
- Long-term O&M — Multi-year operation and maintenance contracts
- Shared savings — Performance-based contracts on verified savings
Project cost components14
- Land and site development
- Civil and structural works
- Storage medium
- Storage tanks and containment
- Heating and charging equipment
- Heat exchangers
- Pumps and piping
- Electrical systems
- Instrumentation and automation
- Insulation and refractory
- Installation and commissioning
- Engineering and project management
- Contingency and financing costs
- Operations and maintenance
Revenue and savings10
- Sale of stored heat
- Sale of steam
- Industrial heat supply contracts
- Electricity sales from heat-to-power systems
- Avoided fuel expenditure
- Renewable energy utilisation
- Reduced peak electricity purchases
- Reduced demand charges, where applicable
- Waste heat recovery savings
- Energy flexibility services, where market rules permit
Financial evaluation11
- CAPEX — Capital expenditure
- OPEX — Operating expenditure
- LCOH — Levelised Cost of Heat
- LCOS — Levelised Cost of Storage — with a defined system boundary
- NPV — Net Present Value
- IRR — Internal Rate of Return
- Payback — Simple and discounted payback period
- DSCR — Debt Service Coverage Ratio
- Financing — Debt, equity and blended structures
- Sensitivity — Electricity price, fuel price, utilisation
- Lifecycle cost — Whole-life cost analysis
Conversion losses
Electricity-to-heat-to-electricity systems lose energy in conversion; compare with alternatives before assuming value.
Related calculators
Calculators are available to staff / admin only.
Related topics
- EPC ProjectsSix-phase project lifecycle and twelve delivery packages, from feasibility to complete turnkey EPC and O&M.
- Calculators (100)Ten calculator families — capacity, heat transfer, design, charging, conversion, industrial, piping, solar, finance and environment.
- Industrial HeatStorage matched to each industry's temperature, operating cycle and heat-delivery form — steam, hot air, hot oil or hot water.
Project & partnership desk
Planning Project Finance?
Tell us your heat demand, site and timeline — BARREL engineers, suppliers and partners will help you scope it.