A Comparative Life Cycle Investment Analysis for Biopower Diffusion in Rural Nigeria

Abstract

This paper adopts the Life Cycle Investment (LCI) approach proposed by Farinha et al. to assess project viability based on the maintenance and operational efficiency of a proposed biopower plant over its useful economic life. The adoption of ISO 55000:2014, its guidance on management and maintenance policies for physical assets, and its contribution to the achievement of sustainable development goals on clean and affordable energy (SDG7) remain relevant for investment decisions regarding waste-to-energy technology systems. Using the parameters defined in a previous biopower feasibility study for Nigeria, the LCI approach is applied to show the change in project profitability over the estimated useful life of the plant, where availability is altered, based on maintenance downtime and overall operational efficiency. The results show positive movement in operational efficiency between 85–91%, which correlates with increased profitability in the same period. The project’s profitability and return on investment is revised downward from 29% to 8% based on the initial availability adjustment, and the changes in derived profit based on plant availability support the argument in favor of operational efficiency and structured maintenance policies as key performance and investment viability indicators, which ultimately impact the total cost of ownership. The results are also interpreted using Pareto Principles for emphasis. The ultimate goal is to encourage due attention and diligence in relation to latent factors which often erode the perceived benefits of viable projects after completion and potentially hamper future investment, specifically in the broader sub-Saharan African waste management context.