Investment risk evaluation techniques: use in energy-intensive industries and implications for ERDA's Industrial Conservation Program

Technical Report · Wed Jul 13 04:00:00 EDT 1977

DOI:https://doi.org/10.2172/6585202· OSTI ID:6585202

The trade-off between risk and rate-of-return in investment evaluations is crucial in assessing the commercial potential of future energy-conservation technologies. The focus of the Industrial Conservation Program at ERDA is to reduce the perceived risks of a given technology to the extent that the private sector will adopt the technology within the normal course of its business operations. These perceived risks may emanate from technical, institutional, or commercial uncertainties, or in many cases they may result merely from a company's or industry's lack of previous experience with a particular technology. Regardless of the source of the risk surrounding a project, the uncertainty it poses to the private sector will serve to inhibit decisions to invest. This study evaluates the treatment of risk in capital investments in certain energy-intensive industries which are the primary targets of ERDA's Industrial Conservation Program. These risks evaluation considerations were placed within a context that includes capital budgeting practices and procedures, organizational considerations, and basic rate-of-return evaluation procedures in the targeted energy-intensive industries (petroleum, chemicals, paper, textiles, cement, food processing, aluminum, steel, glass, and agriculture).

• Research Organization: Energy and Environmental Analysis, Inc., Arlington, VA (USA)
• Sponsoring Organization: USDOE
• OSTI ID: 6585202
• Report Number(s): SAN-1225-T010-1
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
291000* -- Energy Planning & Policy-- Conservation
32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATION
320300 -- Energy Conservation
Consumption
& Utilization-- Industrial & Agricultural Processes
AGRICULTURE
BUDGETS
CEMENT INDUSTRY
CHEMICAL INDUSTRY
COMMERCIALIZATION
DECISION MAKING
ENERGY CONSERVATION
EVALUATION
FOOD INDUSTRY
GLASS INDUSTRY
INDUSTRY
INVESTMENT
METAL INDUSTRY
NATIONAL ORGANIZATIONS
PAPER INDUSTRY
PETROLEUM INDUSTRY
RISK ASSESSMENT
TECHNOLOGY ASSESSMENT
TECHNOLOGY UTILIZATION
TEXTILE INDUSTRY
US ERDA
US ORGANIZATIONS
WOOD PRODUCTS INDUSTRY