COST-BENEFIT ANALYSIS

For successful sustainable projects

To invest or not to invest

Insights in your green innovation

Would you like to gain insight into the societal effects or your green innovation? Or find out more about the financial feasibility of your innovation? Or both? With our societal cost-benefit analysis (CBA), we estimate, quantify and monetise the socio-economic advantages and disadvantages of your project. Based on these quantified insights, as a project owner, externally involved investor or government, you can make quantified decisions whether a project will achieve the desired social effect and if this justifies the investment. A societal cost-benefit analysis can also be used to determine which project or project variant should be given priority.

Different perspectives

Why use a cost-benefit analysis?

The societal cost-benefit analysis (CBA) is conducted from the point of view of society as a whole, including the total costs and benefits from the perspective of all stakeholders that are affected in a positive or negative way by the investment decision. Within a societal cost-benefit analysis, we consider two different perspectives:

A financial cost-benefit analysis, in which costs and benefits of the project owner play a central role;
An economic cost-benefit analysis, in which we also include all societal costs and benefits. Examples are project impact on GHG emissions, air pollution, and effects on other markets.

In this respect, the Cost Benefit Analysis differs from financial analyses where only financial costs and benefits that accrue to the owner of the project, as a result of the investment decision, are considered.

Providing insight

Benefits of a Cost Benefit analysis

A COST BENEFIT ANALYSIS CAN HELP PROJECT PROMOTERS BY:

Providing quantified insights to decision-makers at key decision milestones throughout the project development cycle;

Quantifying and monetising societal impacts in addition to solely financial indicators;

Prioritising or ranking projects to meet a set of intended objectives with constrained resources;

Scoping out and shortlisting both strategic and technical options in the early programming and project development phase;

Increasing transparency and accountability in project selection by using a consistent method that allows assumptions to be tested and impacts to be made transparent.

A societal cost-benefit analysis:

Provides insights in financial feasibility, societal impact and cost efficiency of ambitions (including sensitivity analysis);

Serves as a decision-making tool for project owners, external investors or governments through presentation of the most important financial and economic indicators;

Is aligned with the relevant CBA methodology (dependent on the project focus and the purpose of the CBA).

Is aligned with the CBA guidelines provided by the European Commission (EC DG REGIO methodology).

You will be provided with:

True price/shadow price of your project, production process or service. Focus on societal costs and benefits of a project is increasing. Only a high level of technological innovation or large financial returns are not sufficient anymore to have a prestigious project.

An overview of the stakeholders that are benefitting and burdened mostly by execution of the project.

Support for internal decision making and for stimulating the most impactful projects by means of quantified insights.

The financial feasibility of the project and expected payback time.

Our approach

How does a cost-benefit analysis work?

All Impact services follow our standardized EGEN approach, which is tailored to our client’s request. The approach consists of four phases:

Scoping

Determining the scope of the analysis in terms of project scope, methodological considerations and (potential) reference case.

Definition of the goal and scope of the analysis and define the choice for using a CBA and what the outcomes/results will be used for. Obtain a comprehensive overview of the project scope and project boundaries for the analysis. Describe the context of the project, project and counterfactual scenario and key assumptions for the analysis. Information will be collected via a dedicated scoping session and presented in a scoping report.

Inventory

Gathering all the relevant data for the analysis.

Collection of business financial data required for quantifying relevant costs and benefits for the financial analysis. Collection of socio-economic data required for quantifying relevant costs and benefits for the economic analysis. Performance of the demand analysis for the project.

Quantification

Quantifying and calculating the actual impact of the project.

Preparation of the Excel template to perform analyses in line with the methodological requirements. Performance and interpretation of financial and economic analysis. Data gathered in the inventory phase is monetised in this phase.

Implementation

Drafting the conclusions and implications based on the results of the quantification phase.

Drafting of a descriptive report presenting the main assumptions, key results, interpretation of these results, and conclusions of the CBA. In addition, a sensitivity analysis will be performed and presented in this report to test the robustness of the results.

1. Scoping

Determining the scope of the analysis in terms of project scope, methodological considerations and (potential) reference case.

2. Inventory

Gathering all the relevant data for the analysis.

3. Quantification

Quantifying and calculating the actual impact of the project.

4. Implementation

Drafting the conclusions and implications based on the results of the quantification phase.

Using specialist knowledge

Outsourcing cost-benefit analysis

EGEN has extensive experience in conducting cost-benefit analyses, both as a tool for evidence-based decision-making and comparing project alternatives, as well as for substantiating the impact of a project required for obtaining (European) subsidies (such as CEF Transport, CEF Energy, CEF AFIF).

EGEN combines specialist knowledge (in the field of environment, energy and sustainable mobility) with knowledge of frequently used CBA methodologies and the European subsidy framework, resulting in impact assessment tools that can be tailored to your project and are in line with the requirements of the European Commission.

Our experts work on a wide range of projects in the sectors energy, environment and mobility, on regional, national and European level. In addition, EGEN has a lot of experience with the execution of cost-benefit analyses on various topics, ranging from projects developing energy (hydrogen, CCS) and mobility infrastructure (rail, ports, alternative fuels), as well as projects focused on waste processing technologies.

“A CBA can provide you with quantified insights and enables you to make well-informed project decisions. By taking into account both the socio-economic project impact as well as the financial consequences of implementing the project, a CBA provides you with a holistic overview of your project’s impact. We are happy to support you and provide you with the quantified insights required for a well-substantiated project decision.”

– Bas Bosma, CBA Key Expert at EGEN

Examples of

Projects which benefitted from a CBA

EGEN helps companies and organizations which are actively committed to a better climate and environment. In the past years, we have contributed to many projects and e.g. supported them through a cost-benefit analysis.

Mad4Water

A project which develops solutions for the management of drinking and waste water in Tunisia, Morocco and Egypt. We have researched which technologies are most profitable to achieve a good system.

COLLECTORS

In this Horizon 2020 funded project EGEN has mapped best practices within waste waste processing in Europe. EGEN has executed CBAs to analyse all costs and benefits of certain waste systems.

INNOVATE TOGETHER

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Contact

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Email
info@egen.green

Phonenumber
+31 (0)88 838 13 81