## 3 Case Study Results  
### Case Study 1  
Results are derived from a model comparison between the baseline scenario with the proposed alternative showing the difference in GHG emissions (\"Gross annual GHG emission reduction\"). Transmission and distribution (T&D) losses are automatically evaluated thanks to the largely populated database embedded in the software. An equivalence is shown in Figure 8 to better understand how much emission is being reduced (almost like 3,000 cars not used). A financial analysis is provided as a final step of this pre-feasibility study. Some parameters have been defined such as inflation rate, project lifetime, debt ratio, debt interest rate and debt duration. User-defined costs usually include O&M for the project lifetime or manpower for the installation. Incentives could be inserted, if available for the specific project. The software gives four outcomes for evaluating financial viability:  
* the pre-tax internal rate of return (IRR) on equity, in percentage, represents the true interest yield provided by the project equity through its lifetime (before applying taxes). It is calculated using the pre-tax yearly cash flows and the project duration. To simplify its meaning, it can be linked to the return on equity (ROE) or return on investment (ROI). IRR on equity of the project is used by the organisation as a comparison to the company IRR and to decide if the investment is convenient or not. For a project which requires cash injections during its lifetime, with amounts that are similar to the project annual earnings, the IRR estimate may become inaccurate. * the pre-tax internal rate of return (IRR) on assets (%) is described as the true interest yield provided by the project assets over its lifetime (pre-tax). It can be reconnected to the return on assets (ROA) meaning. Figure 8: Emission analysis chart (screenshot by author using RETScreen). * the simple payback (in years) formula considers the estimated initial costs, the total annual costs (excluding debt payments) and the total annual benefits and income. This indicator represents how long it takes for a certain plant to cover its initial cost. The simple payback method has the meaning of evaluating the desirability of an investment: if the time to cover the initial cost is short enough, the investment could be considered convenient. This index could be adopted to compare different projects' profitability. This indicator is of secondary importance to evaluate the risk of an investment, especially because it disregards important aspects, such as the impact of inflation during the project lifetime, but it could be useful for small companies which should prefer short-term payback projects, even though they have lower IRR with respect to other ones. * the equity payback, which represents the duration it takes for the plant owner to cover its own initial investment (equity) out of the project cash flows generated. Equity payback takes into account the cash flow of the company from its start as well as the equity (debt level) of the business, which allows it a better time measure of the value of the project than the previous indicator (simple payback). The model uses the year number and the accumulated post-tax cash flows to measure this value. As a result, financial feasibility is provided in Figure 9, together with the cumulative cash flow graph. Less than one year is needed to reach the equity payback. For risk analysis, the Monte Carlo method is applied. The possible combinations of input variables range from 500 to 5,000 values of pre and after-tax IRR equity, pre and after-tax IRR assets, equity payback, net present value (NPV) or energy production cost. The risk analysis allows the user to determine whether or not the volatility of the financial metric is appropriate by looking at the range of possible results. An excessive variance would imply the need to make further effort to reduce the volatility associated with the input variables that have been identified as having the greatest impact on the financial metric.