eThesis - Kauppakorkeakoulun sähköiset gradut

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ANALYZING ENERGY EFFICIENCY INVESTMENTS IN THE PROCESS INDUSTRY – CASE SACHTLEBEN PIGMENTS OY

Research objectives

The main objective of the study was to determine which investment appraisal methods are most suitable for analyzing energy efficiency investments. The investment analysis methods were examined and improved in order to discover whether the lack of appropriate investment analysis methods constitutes a barrier to energy efficiency investments’ acceptance in industrial companies’ capital budgeting process. The purpose was to establish a comprehensive view of appropriate practices in energy efficiency investment analysis.

Sources

The theoretical part of the study was compiled out of a wide range of research articles, reports and academic textbooks concerning energy efficiency and investment analysis. The data used in the empiric part consisted of theme interviews with the case company representatives and written material from the company.

Research method

The study was conducted by using theme interviews and informal discussions with the case company representatives. The interviewees consisted of directors responsible for identifying investment opportunities, planning investments and preparing investment proposals. Altogether seven people were interviewed. Additionally, the company’s written material, such as investment proposal forms and instructions, was used as a study material.

Results

The study showed that the lack of appropriate investment analysis methods can constitute a significant barrier to energy efficiency investments. Two main areas of improvement were identified in energy efficiency investment analysis: need for more sophisticated analysis of investment risk and consideration of investment’s strategic implications. Several methods were proposed for improving energy efficiency investment analysis.