Energy Economics and Financial Analysis Flashcards
7 cards from real CEM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Energy Economics and Financial Analysis flashcards as text
A Time-of-Use (TOU) electricity rate structure is beneficial for energy managers primarily because it:
Answer: Provides opportunities to shift loads to lower-cost off-peak periods
TOU rates differ by time period, allowing energy managers to shift flexible loads to lower-cost off-peak hours to reduce overall energy costs.
In energy management, carbon credits (carbon offsets) are primarily used to:
Answer: Offset greenhouse gas emissions through verified emission reductions elsewhere
Carbon credits represent verified reductions in greenhouse gas emissions that organizations purchase to compensate for their own emissions without directly cutting energy use.
The ENERGY STAR Portfolio Manager tool is primarily used by energy managers for:
Answer: Tracking and benchmarking a building's energy performance against similar buildings
ENERGY STAR Portfolio Manager is a free EPA online tool that allows energy managers to measure, track, and benchmark building energy and water use relative to similar facilities nationwide.
The Levelized Cost of Energy (LCOE) is defined as:
Answer: The net present value of total lifecycle costs divided by total lifetime energy production
LCOE is the NPV of total lifecycle costs divided by total lifetime energy production, providing a uniform metric to compare different energy technologies on a cost-per-unit basis.
Utility rebates for energy efficiency projects are typically classified as:
Answer: Non-recurring benefits that reduce the net capital cost of the project
Utility rebates are one-time payments that reduce the net upfront capital cost of energy projects, improving payback period and overall ROI.
In energy project financial analysis, sensitivity analysis is used to:
Answer: Assess how changes in key variables such as energy price or project cost affect financial outcomes
Sensitivity analysis evaluates how the financial performance of a project changes when key assumptions such as energy prices, capital costs, or savings rates are varied.
When comparing natural gas cost ($/MMBtu) to electricity cost ($/kWh) for energy analysis, the correct conversion factor is:
Answer: 1 kWh = 3,412 Btu
One kilowatt-hour of electricity equals 3,412 Btu, which is the standard conversion factor used for comparing electricity and fuel costs on an energy-equivalent basis.