After identifying energy management opportunities and evaluating and calculation on the impacts of energy the next step is selecting and prioritizing EMO projects. For selecting and prioritizing EMO projects careful and best selection of decision-making tools is essential. Some of the effective decision making tools which are vital for selecting and prioritizing EMO projects are feasibility analysis, risk assessment, cost assessment of projects, prioritizing tasks and to avoid trade off by using economic modeling.
Initial Inspection : Feasibility Analysis :The evaluated list of EMO projects is further shortened out by making an initial feasibility study. The initial feasibility study includes rejection of EMO projects which does not meet technical feasibility and projects that does not meet criteria.
These lists are further narrowed by making feasibility analysis on further attributes like performance risks, supplier information, good engineering practice, experience of resources, consultants in the specified project and so on. Only the EMO projects which best suits all these attributes for the foundry would take its presence in the selected list.
Alternate Possible Methods of Execution :Evaluation is made to study whether it is possible for the EMO project to have compatibility of integration with existing system and produce the best results. In this stage it is essential to go deeper in this aspect and quantify the results by recording the results and benefits achieved by project integration and by recording the results and benefits achieved if the projects are executed as individuals.
Business Risk Assessment:The term business risk assessment includes in it the assessment of EMO projects in terms of safety, legal aspects, and environment and so on. The formula used for assessing and recording business risks is
B = E × L × C
where B stands for Risk, E stands for exposure, L for likelihood and C for consequences. After quantifying and recording risk by above formula it is vital to categorize the risk as high, medium, low or negligible. This help the management to study amount of risks factor associated with each EMO project. The above calculated risk factor is quantifiable risk factor. Apart from this there would be other risks associated like tolerable risk level and risk exposure for the EMO project. All these also need to be assessed and projected in the report.
Prioritizing EMO projects :While prioritizing EMO projects it is essential to take into account objectives set along with industry's business plan. Also proper care must be taken to prioritizing EMO projects making way for crisis management.
Risk assessment :There are various broad categories in which an industry would face risk. They are financial, organizational, external, regulatory, legal, operations. So assessment in all these areas must be made for the proposed EMO projects and recorded. Also proper projection for risk tolerance level must be provided in the assessment.
Calculation of Project Profit and Cost Assessment :While calculating the project profit all attributes like purchase or up gradation of equipments, installation charges associated, cost of space needed installation which all comes under capital cost must be taken into account. The other attributes like benefits in terms of savings cost to say for instance energy consumption that would add in saving cost which would be achieved by the proposed EMO project must be recorded while calculating project profit. Next step is to calculate the number of years it would take for the simple payback on investment with the effect of capital cost allowances also being included in it. The cost assessment must be made in three stages Pre-feasibility study, Feasibility study and Project approval. The above all contributes to pre-feasibility study cost assessment.
The selected projects which pass the pre-feasibility study cost assessment moves to the next stage feasibility estimating where even more detailed analysis of costing for execution of projects from vendors is obtained and recorded. Narrowing this further brings to the next stage formal project approval where numbers in cost assessment projected, must be of greater accuracy. All these together would contribute for the project's profit and cost assessment.
Economic model for trade-offs :The right choice of model to be chosen for executing the EMO projects is made at this stage. The choice must be made by taking several factors into consideration. Some of the vital ones are scheduled date for completion, project unit cost, project performance and development costs.