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Lesson 5 presents the concept of a Life Cycle Analysis and how it can be applied in the evaluation of renewable energy projects. Again, the main components of an LCA are Defining Goals and Scope; Conducting Inventory Analyses; Assessing for Impacts; and Interpretations all along the way.
In the Sustainable Energy readings for this lesson, we looked at a variety of strategies for evaluating the costs of RE projects. However, to capture a picture of the RE project, we need to evaluate for known externalities and risks in addition to monetary costs. And finally, for the variety of market reasons we covered here, we cannot always capture the non-monetary costs of many RE project impacts. As well, highlighting the externality costs of fossil and non-renewable fuel sources really does begin to make RE projects look much more appealing. Making these externalities and hidden costs explicit would be key to a strong nonmarket strategy for any RE project. Since the most significant dimension of impacts for nonrenewable energy projects is to the environment, Lesson 6 will focus specifically on how to account for those various externalities to typical project cost analyses.
Assignment Comments
In terms of this week's LCA assignment, you should be using Chapter 1 in the Singh book and one of the Chapters in Sustainable Energy on an energy of your choice to guide you through the LCA matrix. What I want for the LCA matrix is, like the SWOT analysis, for you to use it mainly as a scoping exercise. We will come back to the LCA in a few weeks, and you will see it applied in the cases as well. For now, I mainly want you to try out the categories. The instructions in the left column correspond to each of the blocks. Stage 1 - Define Goals and Scope, Stage 2 - Describe what inventory (stocks and flows) will be analyzed, Stage 3 - Assess for possible impacts of Stage 2, and Stage 4 - Interpretations (e.g., what does this mean to your business?)
Reminder - Complete all of the Lesson 5 tasks!
You have reached the end of Lesson 5! Double-check the to-do list on the Lesson 5 Overview page to make sure you have completed all of the activities listed there before you begin Lesson 6.