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CYnergy Program
Activity 3 Natural Gas in Road Transportation
Report Sub-Activity 3.3.
Activity 3: Natural Gas in Road Transportation
Report of Sub-Activity 3.3
Responsible Partner: Ocean Finance - OF Document Code:Version: 1.2.Date of Submission: 31/12/2018
CYnergy is co-financed by the European Union's Connecting Europe Facility.
The sole responsibility of this publication lies with the author. The European Union is not responsible for any use that may be made of the information contained therein.
Cost Benefit Analysis of NG in Cyprus for Road Transportation
Document DetailsGrant Agreement Number: INEA/CEF/SYN/A2016/1336268Action Number: 2016-EU-SA-0009Project Title: CYnergy
Activity: Activity 3: NG in Road Transportation: Design, Legislation & Implementation Plan
Sub-activity: Sub-activity 3.3: Cost Analysis of NG in Road Transport
Milestone: Milestone No. 14: Cost Analysis for the introduction of NG in Road Sector
Document HistoryVersion Date Reviewed1.1. 31/12/20181.2. DEPA, DEFA, DDL
Contributing AuthorsOrganisationOFDEFADDLDEPA
Disclaimer
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Cost Benefit Analysis of NG in Cyprus for Road Transportation
The information contained in this document is confidential, privileged and only for the information of the intended recipient and may not be used, published or redistributed without the prior written consent of Ocean Finance Ltd
The opinions expressed are in good faith and while every care has been taken in preparing these documents Ocean Finance Ltd makes no representations and gives no warranties of whatever nature in respect of these documents, including but not limited to the accuracy or completeness of any information, facts and/or opinions contained therein.
Ocean Finance Ltd, its subsidiaries and affiliated companies (as per the Grant Agreement) and their directors, employees and agents cannot be held liable for the use of and reliance of the opinions, estimates, forecasts and findings in these documents
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Cost Benefit Analysis of NG in Cyprus for Road Transportation
Table of ContentsExecutive Summary....................................................................................................................3
1. Introduction.......................................................................................................................4
1.1. Scope of Cost Benefit Analysis....................................................................................5
1.2. Structure of Cost Benefit Analysis..............................................................................5
2. Description of the Context.................................................................................................6
3. Definition of Objectives......................................................................................................8
4. Project Identification..........................................................................................................9
4.1. Stakeholders Analysis................................................................................................9
4.2. Physical Elements………………………………………………………………………………………………………9
5. Technical Feasibility and Environmental Sustainability.....................................................11
5.1. Demand Analysis.....................................................................................................11
5.2. Supply Chain Means Analysis...................................................................................13
5.3. Environment and Climate Change Considerations....................................................14
6. Financial Analysis.............................................................................................................17
7. Risk Assessment...............................................................................................................32
7.1. Sensitivity Analysis...................................................................................................33
Appendix……………………………………………………………………………………………………………………………….33
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Cost Benefit Analysis of NG in Cyprus for Road Transportation
Executive Summary
The CYnergy, co-financed by the European Union’s Connecting Europe Facility, Action
provides a holistic approach towards the adoption of Natural Gas (NG) in Cyprus and the
development of a sustainable and fully functional NG market for providing clean and
affordable energy to the end user. The Action, as part of the Orient/East-Med TEN-T
Corridor, takes as a focal point the floating Liquified Natural Gas (LNG) Facility to be
developed in Cyprus and aims at building the main and supporting infrastructures for the
introduction, supply and use of NG by the sectors of transport and energy in Cyprus. As
part of this Action, Ocean Finance Ltd, evaluated the financial feasibility of the NG’s
relevant penetration to Cyprus’ market as an alternative energy source, by assessing the
potential future demand (provided by Decision Dynamics Ltd - DDL, partners of CYnergy)
for road transportation use in Cyprus (Act. 3, Sub-activity 3.3, Milestone No.14) and the
respective supply chain for this basic scenario under consideration. In the financial
analysis all the financial parameters are presented, analysed and computed at constant
prices (2018). The time horizon during which the project is evaluated and during which the
respective cash-flows for examining project sustainability are calculated, starts in 2019
and reaches 2043. The results of the financial analysis for the investment under
consideration depict briefly that the project is not viable because of its negative financial
profitability (FNPV (C) = EUR -1,916,702) and therefore it requires EU assistance. In
particular, the results of the financial analysis are presented in the table below:
Financial Analysis
Financial Net Present Value (FNPV) (C)=-1,916,702 EUR
Financial Rate of Return (FRR) = 2.4 %
Funding Rate = 26 %Funding Gap = 1,916,702 EUR
After EU Grant Net Present Value of Investment Cost = -60,916 EUR
After EU Grant Rate of Return (IRR) = 4%
Similarly, a sensitivity analysis was performed for the basic future demand scenario.
Specifically, for evaluating the elasticity of FNPV (C) and FNPV (K) indicators, the
sensitivity analysis was performed for the scenario of 5% increase on the investment cost,
5% increase on CNG fuel price and 3% increase on the NG penetration factor to the total
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Cost Benefit Analysis of NG in Cyprus for Road Transportation
new car sales (5% penetration factor to the basic future demand scenario used in this
analysis).
1. Introduction
The main objective of the activity is to perform all the relevant studies for the penetration
of NG fuel as an alternative energy source for the road transportation sector at the urban,
peri-urban, regional and national context. The abovementioned road sector’s users
dispose specific decision drivers that have to be carefully addressed, while the operational
and legal framework has to adapted accordingly. For the intensive penetration of NG fuel
in the road transportation sector, alternative penetration strategies must have been
examined and a proposed optimum positioning at the strategic level for the CNG and LNG
refuelling infrastructure must have been developed.
As for the specified sub-activity that is entailed in this report, its aim is to enact a detailed
Cost Assessment for the use of NG fuel for road transportation use, based on the
implementation strategy that will be followed and the proposed supply chain options. The
report will concentrate on the identification of the potential NG users, and on their current
energy consumption profile, that will be analysed extensively. According to our report’s
methodology, the potential NG users’ base includes all the main categories of vehicles
enabled to switch their current fuel. The estimation of the potential Natural Gas road
transportation users was provided by the partners of CYnergy, DDL – Decision Dynamics
Ltd regarding the total number of the estimated licensed vehicles in Cyprus, their mean
annual growth rate per vehicle category and their average annual vehicle mileage in
combination with the future estimation of the NG fuel penetration to each vehicle category.
More specifically, via this financial analysis it will be established whether NG can compete
with Cypriot drivers’ current fuel mix and the financial feasibility of NG’s introduction to
road sector will be depicted in order to enable a smooth switch from current fuels.
Based on the NG fuel supply chain review and the diversity of this supply chain
(CNG/LNG forms of fuel) on its merits and suitability to potential consumers, the cost
benefit analysis will focus on NG supply chains’ previous analysis’ results, that indicate
the most applicable by end users in the domain of Cyprus and in overall for the road
transportation sector. Considering the NG fuel’s potential demand’s characteristics in
Cyprus, this study will evaluate and analyse the alternative logistics chains’ operations
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Cost Benefit Analysis of NG in Cyprus for Road Transportation
and will result to the most efficient and financial attractive supply solutions that will cover
the estimated NG fuel demand in Cyprus.
1.1. Scope of Cost Benefit Analysis
The aim of this Cost Benefit Analysis (CBA) is the evaluation of the financial feasibility of
the NG penetration in the Cypriot market for road transportation use in comparison with
the current energy fuel consumption mix of this sector at the urban, peri-urban, regional
and national context.
This assessment will be based on the proposed implementation strategy and supply chain
options. In particular, after the identification of the potential NG users it will be established
whether NG, as an alternative and greener fuel could compete its competitive and current
fuels in the road transportation sector and the financial feasibility of this NG’s introduction
to road sector will be depicted to enable a switch from the current fuels.
Based on the above, this study is an obligation fulfilled as part of Activity 3 - Natural Gas
in Road Transportation: Strategy, Legislation and Implementation Plan of the CYnergy
Action.
1.2. Structure of Cost Benefit Analysis
Following Introduction, the remainder of this study is organised as follows into seven (7)
chapters:
Chapter 2 defines and describes the social, economic, political and institutional context in
which the project under consideration will be implemented. Chapter 3 defines the main
objectives of the project that should be met. Chapter 4 identifies and analyses the
stakeholders of the project. Chapter 5. identifies the needs for the investment by
assessing the impacts of the project on climate and environment Chapter 6 presents the
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Cost Benefit Analysis of NG in Cyprus for Road Transportation
financial analysis in order to compute the project’s financial performance. Finally, Chapter 7 identifies and examines the critical values of the project by assessing the project’s risk.
2. Description of the Context
The study is based on the general idea of the decarbonisation of the road transportation
aligning with EU and International Regulations and Rules, ensuring the satisfaction of the
road transportation demand for more clean and effective energy at the urban, peri-urban,
regional and national context. A wide number of EU and International policies, standards,
rules and regulations on climate change and the environment relevant to the limitation of
the emission produced by road transportation sector’s activities and the deployment of
infrastructure for cleaner fuel supply chains already exists (indicative list):
Alternative Fuels Directive (Directive (EU) 2014/94 of the European Parliament
and of the Council of 22 October 2014 on the deployment of alternative fuels
infrastructure);
Sulphur Directive (Directive (EU) Directive 1999/32/EC of the European Parliament
and of the Council of 11 May 2016 relating to a reduction in the sulphur content of
certain liquid fuels). As amended by Directive 2012/33/EU and codified by
2016/802/EU);
Renewable Energy Directive (Directive 2009/28/EC of the European Parliament
and of the Council of 5 June 2009 on requiring that 20% of the energy consumed
within the European Union is renewable and reducing 20% carbon dioxide
emissions by 2020);
Fuel Quality Directive that requires a minimum 6% reduction of the greenhouse
gas intensity of fuels used in transport by 2020 from a 2010 baseline, applying to
petrol, diesel and biofuels used in road transport;
Energy Efficiency Directive (Directive 2012/27/EU of the European Parliament and
of the Council of 14 November 2012 on the energy efficiency improvements in all
stages and sectors of the supply chain);
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Cost Benefit Analysis of NG in Cyprus for Road Transportation
Clean Mobility and Power Package for Transport by EC regarding the use of CNG
along the TEN-T core network by end of 2020 as well as the use of LNG for heavy-
duty vehicles by end of 2025;
Regulation (EC) No 595/2009 on emissions from heavy duty vehicles;
Commission Regulation (EC) No 692/2008 implementing and amending
Regulation (EC) No 715/2007 of the European Parliament and of the Council on
type-approval of motor vehicles with respect to emissions from light passenger and
commercial vehicles and on access to vehicle repair and maintenance information;
The geographical scope of study focuses on the transport network of Cyprus for the
development of the NG supply chain, in particular, on the main provinces of Cyprus. This
report brings into focus the cost assessment of the proposed supply chain options for the
introduction of NG in Cyprus for the road transportation users that were identified and their
current energy consumption profile was defined in order to feature whether Natural Gas
(NG) can compete with their current energy fuel mix.
In particular, under the scope of this activity it will be demonstrated that NG (in both forms
of LNG and CNG), in environmental terms, produces fewer harmful combustion compared
to the respective combustion by oil products, as it is chemically relatively simpler
compared to them. Therefore, NG fuel has also several other advantages comparing to
other fuels, like petroleum products. Generally, it is not explosive, not toxic and not
carcinogenic. Moreover, it is considered as more energy efficient, because it is purer, has
higher methane and energy content and has a more stable composition.
This is the time to take the first step towards an alternative technology for the road
transport sector that, other than the fact of its “green” orientation, promotes the economy
and transportation and furthermore provides the diversification of the energy sources and
a potential increase to the future level of energy security of Cyprus (and therefore EU).
3. Definition of Objectives
The objectives of this report are consistent with the overall EU strategy for a more
resource-efficient Europe, in terms of development and/or utilization of energy sources in
a way that the environmental impact is minimized or completely eliminated. In addition, it
is in line with the European Energy Security Strategy, with the ultimate being the 20%
energy efficiency target achievement by 2020.
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Cost Benefit Analysis of NG in Cyprus for Road Transportation
The general objective of the proposed investment is to implement the logistical solutions
and a sustainable and green transportation system, based on the proven, technical,
operational and financial efficiency of its solutions, promoting the availability of an
alternative, more eco-friendly and cost-effective fuel for road transportation use in Cyprus,
where it is currently not provided due to the lack of infrastructure.
The specific objectives of this sub-activity are to:
Meet the environmental EU and International rules and regulations concerning the
restriction of emissions for road transportation activities within urban and sub-
urban areas;
Provide a reliable system for supplying NG (in both forms of CNG/LNG) for road
transportation use as alternative greener fuel;
Meet the estimated demand for NG (in both forms of CNG and LNG) by road
transportation users located in Cyprus’ main provinces.
4. Identification of the Project
4.1. Stakeholders Analysis
Generally, the Road Transportation Sector in Cyprus offers a great potential for the use of
natural Gas, mainly in CNG form due to its versatility, lower storage costs, optimum safety
level and its wider utilization in road transport globally without requirements of special
training and gear, but also in LNG form in the near future with the fast paced development
of the appropriate transport and storage infrastructure, as long as the EU guidelines for
development of an adequately dense supply network are followed. Therefore, before
proceeding to calculating penetration factors in the Road Transportation Sector and the
occurring demands for natural gas (in CNG, LNG forms) it should be noted that the
majority of vehicles’ categories in Cyprus use traditional petroleum fuels such as Diesel
fuel and petrol depending on their type.
Road Transportation Users Profile
The road transportation users of Cyprus are the main beneficiaries from the potential
penetration of Natural Gas in the form of CNG, as an alternative, cleaner and more
efficient energy source for the wider road transportation sector. Natural Gas availability is
to be considered as a significant market structural improvement that can spur sustainable
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Cost Benefit Analysis of NG in Cyprus for Road Transportation
growth and benefit numerous users from the road transportation sector in Cyprus. Except
for its energy efficiency and its aforementioned environmental benefits, NG’s future road
transportation demand could be boosted by the fact that road transport users, i.e. vehicles
are obligated to meet the strict environmental emission standards set by strict EU
emission laws that require an improvement in vehicle emissions and the highly effective
reduction of air pollutants produced by vehicles’ operation.
Regarding the transport sector in Cyprus, it is clear that natural gas use by road vehicles
is still in its infancy, although natural gas-powered vehicles present an enormous
opportunity for cleaning up the emissions from this sector. Cyprus is heavily dependent on
fossil fuels, representing 92% of the total energy consumption.
4.2 Physical Elements
Based on the extrapolated future demand scenario (basic assumption provided by
Decision Dynamics Ltd in combination with the application of 5% NG penetration factor to
the estimated total new car sales in 2040, the most usual penetration level of NG markets
in countries with low population worldwide and in correlation with NGVs’ share as 1.5% of
the total vehicle population in European countries in 2016 – International Association for
Natural Gas Vehicles Statistics) with its fluctuations during the reference years 2020-2030
due to the NG degree of penetration (cause after 2030 up to 2043 we consider that
demand is constant), we performed in our report a conceptual design and choice of the
appropriate and more cost-effective supply chains’ means for covering the estimated NG
road transportation demand (in the forms of LNG and CNG respectively). The main
equipment components required for covering the assessed NG road transportation
demand, in combination with the planned construction of Vassiliko FSRU, in the main
provinces of Cyprus are the following:
LNG tanker trucks with loading capacity of 40m3 each (based on BlueHUBS
project’s estimations) and three unloads per day (including LNG trailers).
LCNG refuelling stations with loading capacity of 60m3 each (based on BlueHUBS
project’s estimations) in order to cover the future energy needs of the road
transportation users.
As for the technical specifications of the means of NG supply chains for road
transportation users, the inputs based on market data are the following:
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Cost Benefit Analysis of NG in Cyprus for Road Transportation
Figure 1: Technical inputs of LNG supply chain. Source: BlueGrid Gas and Power – Sub-activity 4.1.
5. Technical Feasibility and Environmental Sustainability
In the short-term perspective, NG will be introduced in the Cypriot market in compliance
with Cyprus energy plans, formed by the EU environmental law enforcements regarding
the limitation of GHG emissions. The NG fuel import in the island will be accomplished via
the FSRU usage (Floating Storage Regasification Unit) at the port of Lemesos Terminal 2-
Vassiliko as well as via the projected development of the East Mediterranean (East-Med)
pipeline, as an offshore/onshore natural gas pipeline, directly connecting East
Mediterranean resources to Greece via Cyprus and Crete until the end of 2020. The
implementation of Cyprus Renewable Energy Roadmap including natural gas’ import will
come true with the onset of hydrocarbon activities for the exploitation of natural resources
of energy.
Taking as focal point the elaboration of the abovementioned main and supporting
infrastructure, the introduction of natural gas in the energy mix will consist a natural step
forward for Cyprus in alignment with its European peers. Based on market research and
experts’ opinion regarding the current energy fuel mix that is used for each type of road
vehicles at European level, in our report we considered that the natural gas penetration
will be held in the form of LNG for the category of heavy trucks and in the form of CNG for
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Cost Benefit Analysis of NG in Cyprus for Road Transportation
all the other vehicle categories including private cars, taxis, public and private buses, light
trucks and tractors.
5.1. Demand Analysis
Regarding the projected NG demand of our cost benefit analysis for the road
transportation users, we used as inputs the demand assumptions, calculated in vehicle
kilometers (measure of traffic flow), that were included in the CYnergy’s Sub-Activity 3.1.
provided by DDL – Decision Dynamics Ltd in combination with the application of 5%
CNG/LNG penetration factor to the estimation of the total new car sales in 2040, which
consists the most usual penetration level of NG markets in countries with low population
worldwide and in correlation with NGVs’ share as 1,5% of the total vehicle population in
European countries in 2016 (IANGV). The key assumption for the estimation of NG
demand in the road sector is the penetration of the LNG/CNG fuel in Cyprus regards with
5% of the estimated total new car sales in 2040 in dependence with the mean annual
growth of vehicles registrations in the recent years and their average annual mileage in
kilometers.
Based on the abovementioned key assumptions, we resulted to the final NG demand in
kilograms (kg) for each vehicle category. As it is depicted in the below table, we can
observe a gradual build-up of the NG demand for road transportation use in Cyprus from
2020 to 2030, reaching 15% of the total estimated demand by the previous sub-activity
3.1 in combination with the application of the 5% NG penetration factor to the total new
car sales.
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Cost Benefit Analysis of NG in Cyprus for Road Transportation
Road Transportation Demand per Vehicle Category (kg of Natural Gas)
Vehicle Category 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Private Cars 252.859 303.431 354.003 404.575 455.146 505.718 606.862 708.005 809.149 910.293 1.011.436
Taxis 6.540 7.848 9.156 10.464 11.772 13.081 15.697 18.313 20.929 23.545 26.161
Public Buses 66.503 79.803 93.104 106.404 119.705 133.005 159.606 186.208 212.809 239.410 266.011
Private Buses 20.371 24.445 28.519 32.594 36.668 40.742 48.891 57.039 65.187 73.336 81.484
Light Trucks 257.873 309.448 361.022 412.597 464.171 515.746 618.895 722.044 825.193 928.343 1.031.492
Heavy Trucks 208.545 250.254 291.964 333.673 375.382 417.091 500.509 583.927 667.345 750.763 834.182
Tractors 35.895 43.074 50.253 57.432 64.611 71.790 86.148 100.506 114.864 129.222 143.580
All Vehicle Types 848.586 1.018.304 1.188.021 1.357.738 1.527.456 1.697.173 2.036.607 2.376.042 2.715.477 3.054.911 3.394.346
Table 1: Annual energy demand per vehicle category for road transportation use.Vehicle Kilometers Travelled - Estimated Demand Per Vehicle Category (km)
Vehicle Category
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Private Cars 7.852.767 9.423.321 10.993.874
12.564.427
14.134.981
15.705.534
18.846.641
21.987.748
25.128.855
28.269.962
31.411.069
Taxis 205.669 246.803 287.937 329.071 370.204 411.338 493.606 575.873 658.141 740.409 822.676Public Buses 171.842 206.210 240.578 274.947 309.315 343.683 412.420 481.156 549.893 618.630 687.366Private Buses 57.254 68.705 80.156 91.607 103.058 114.509 137.410 160.312 183.214 206.115 229.017Light Trucks 1.570.481 1.884.577 2.198.673 2.512.769 2.826.866 3.140.962 3.769.154 4.397.347 5.025.539 5.653.731 6.281.924
Heavy Trucks 807.064 968.477 1.129.890 1.291.303 1.452.716 1.614.129 1.936.954 2.259.780 2.582.606 2.905.431 3.228.257Tractors 127.785 153.342 178.900 204.457 230.014 255.571 306.685 357.799 408.913 460.027 511.142
All Vehicle Types
10.792.863
12.951.435
15.110.008
17.268.580
19.427.153
21.585.725
25.902.870
30.220.015
34.537.160
38.854.305
43.171.451
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Cost Benefit Analysis of NG in Cyprus for Road Transportation
Table 2: Total Kilometers Travelled – Estimated Demand per Vehicle Category.
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Cost Benefit Analysis of NG in Cyprus for Road Transportation
2020
2022
2024
2026
2028
2030
0 200,000 400,000 600,000 800,000 1,000,000 1,200,000
Road Sector Estimated Demand per Vehicle Category (kg of NG)
Tractors Heavy Trucks Light Trucks Private BusesPublic Buses Taxis Private Cars
Figure 2: Road Transportation Estimated Demand per Vehicle Category
5.2. Supply Chain Means Analysis
The conceptual design and choice of the supply chain means for covering the estimated
road transportation NG demand (in both forms of LNG and CNG) was based on the
extrapolated future demand (as a result of basic assumption in the previous Sub-activity
by DDL in combination with the application of 5% NG penetration factor to the estimation
of the total new car sales in 2040, which consists the most usual penetration level of NG
markets in countries with low population worldwide and in correlation with NGVs’ share as
1,5% of the total vehicle population in European countries in 2016 - IANGV) with its
fluctuations from 2020 to 2030 due to the NG degree of penetration (cause after 2030 up
to 2043 we consider that demand is constant). The proposed supply chain for road
transportation users in order to satisfy the estimated road sector’s demand includes LNG
tanker trucks with capacity approx. 40m3 and LCNG refuelling stations sites in the main
provinces of Cyprus with predetermined capacity of 60m3 for the energy needs of each
province in dependence with its population.
More specifically, the proposed supply chain road transportation users in order to satisfy
the estimated road transportation demand entails three (3) LNG tanker trucks with
capacity approx. 40m3 and five (5) LCNG fuelling stations in 2020 that will serve the
extrapolated NG demand of the five main provinces of Cyprus (1 LCNG station in each
province in dependence with the needs of population) while in the reference year of 2030
with the build-up of the NG demand for road transportation in the island, two (2) more
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Cost Benefit Analysis of NG in Cyprus for Road Transportation
LCNG refuelling stations will be added in the largest provinces of Cyprus (i.e. one station
in Leukosia Province and one in Lemesos Province, the most populated regions with the
most increased estimated NG demand).
Regarding the operations of the LNG tanker trucks, they will perform three (3) unloads per
day between the main provinces in order to catch up the extrapolated NG future demand
for Cyprus’ road sector. The indicative driving distances from Vassiliko FSRU as point of
departure that LNG trucks will cover to reach the main provinces, where the respective
LCNG stations will be located, are presented in the below table.
Provinces Distance (Km)Ammochostos 91.56 = 2hrs
Larnaca 42.75 = 1hLemesos 31.92 = ¾ hrsLeukosia 59.29 = 1,5 hPaphos 97.1 = 2hrs
Ammochostos Province
Larnaca Province
Lemesos Province
Leukosia Province
Paphos Province
0 0.5 1 1.5 2 2.5
LCNG Stations per District
2019 2030
Figure 3: LCNG Stations per District in dependence with NG demand
5.3 Environment and Climate Change Considerations
According to a plethora of environmental studies and reports, it is mentioned that road
vehicle emissions consist an important source of both greenhouse gases and air
pollutants and therefore they lead inevitably to the acidification of the environment. Under
the scope of this CBA, nitrogen oxides (NOx), particulate matter (PM) carbon dioxide
(CO2), carbon monoxide (CO) and also hydrocarbons (HCs) are the most important air
pollutants that are linked with the abovementioned activities. These emissions from
polluting gases produced by vehicle engines during partial or complete fuel combustion
have a negative impact in the progressive degradation of soil, water and forests and the
16
Cost Benefit Analysis of NG in Cyprus for Road Transportation
gradual deterioration of human health (respiratory diseases due to the formation of fine
particles in the air).
More specifically, air pollutants produced by vehicle engines’ internal combustion process
contribute to the formation of ground - level ozone and photochemical smog in the
atmosphere, that irritate in sequence human eyes, damage the lungs and aggravate
respiratory problems. Regarding the types of vehicle emissions, they are divided into
exhaust, abrasion and evaporative emissions. Exhaust emissions are produced primarily
from the combustion of different petroleum products such as petrol, diesel and liquified
petroleum gas (LPG) and the amount of their pollutants is very dependent on the type of
fuel used and engine technology. The second category of abrasion emissions are
produced from the mechanical abrasion and corrosion of vehicle parts. Particulate matter
emissions can be generated from the mechanical abrasion of the vehicles’ tires, brakes
and clutch, the road surface wear or the corrosion of the chassis, bodywork and other
vehicle components. As for the evaporative emissions, they consist the vapours resulting
from the vehicle’s fuel system.
In accordance with European Environment Agency’s guide, in road transport sector, GHG
emissions have increased in recent decades, while in all other main sectors of economy
they have fallen. Road transport GHG emissions are around 16% above the levels in
1990. Especially, as emissions from other sources have decreased, the contribution that
road transport makes to total EU emissions has increased by around half, i.e. from a 13%
share in 1990 to almost 20% share in 2013. The road transportation users in Cyprus
consume mainly gasoline and diesel fuel as their current fuel consumption mix.
Nevertheless, both gasoline and diesel fuel are responsible for air pollution, containing
high levels of asphalt, carbon, residues, sulphur and metallic compounds and have high
viscosity and low volatility properties and they also are neither cost-effective nor energy-
effective as fuels in comparison with natural gas in the form of CNG fuel. Due to these
characteristics, gasoline and diesel fuel when burned they emit substances like SO2,
NOx, PM, and CO2 which cause damage to the surroundings.
The main controlling protocol that sets limits on the vehicles’ emissions are the emission
standards, as the legal requirements governing air pollutants released into the
atmosphere. These emission standards set quantitative limits on the permissible amount
of specific air pollutants that may be released from specific sources over specific
timeframes, designed to achieve air quality standards and to protect human life. In the
European Union, new emission standards are in effect for all road vehicles, trains, barges
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Cost Benefit Analysis of NG in Cyprus for Road Transportation
and ‘nonroad mobile machinery’ such as tractors. EU Regulation No 443/2009 sets an
average CO2 emissions target for new passenger cars of 130 grams per kilometre and
the target was gradually phased in between 2012 and 2015. A new emission target of 95
grams will apply from 2021. As for light commercial vehicles, an emission target of 175
g/km applies from 2017 and 147 g/km from 2020, a reduction of 16%. In order to meet
and approach these emission requirements, alternative sources of energy such as natural
in the form of CNG for road vehicles must be penetrated vigorously in Cyprus’ vehicles
market.
In that case, CNG fuel, in environmental terms, produces fewer harmful combustion by-
products, as it is chemically relatively simpler compared to traditional petroleum products.
Compressed natural gas has also several other advantages comparing to other fuels, like
petroleum products. In automotive industry, CNG fuel is known for its low emissions and
various other eco-friendly benefits and as transportation fuel it consists a mature
technology complying up with up to date safety standards. Regarding the pricing issues of
transportation fuels, CNG fuel for road transport use, due to its quite lower price, is
considered as a more cost-effective fuel in comparison with current fuel consumption mix
in vehicles’ market. Thereby, taking advantage of CNG’s lower price, Cyprus could
minimize its dependency on foreign oil.
In particular, compressed natural gas is the cleanest burning transportation fuel in
comparison with petroleum-based products because of its lower carbon content. CNG fuel
produces 20-30% fewer greenhouse gas emissions and 95% fewer tailpipe emissions
than petroleum products, causing null evaporative emissions. Regarding CNG fuel’s
flammability, it ranges from 5 to 15 percent, which makes it less flammable and safer than
other fuels. In the event of a collision, CNG cylinders are less dangerous than gasoline
and diesel tanks because of its size, structure and location within the vehicle. Technically,
these cylinders have safety devices which are designed to release the gas if its normal
pressure or temperature is higher than the expected. Due to CNG’s ignition temperature,
which is 600 C, higher than gasoline (320 C) and diesel (285 C), it should be noted that⁰ ⁰ ⁰
vehicles using CNG as main fuel are less likely to catch fire under any circumstances. In
the event of an accidental release, CNG is lighter than air, meaning that it will dissipate
into the atmosphere, unlike gasoline or diesel which pools on the ground and serves as a
fire hazard. An appealing benefit of CNG fuel to vehicles reciprocates to their
maintenance cost, since there can be longer periods between tune-ups and oil changes.
Dedicated CNG fuel engines are superior in performance to gasoline engines because
18
Cost Benefit Analysis of NG in Cyprus for Road Transportation
natural gas has an octane rating of approximately 130, whereas super and unleaded have
octane levels of 95 and 97 respectively.
CYnergy’s particular activity proposes an approach towards the decarbonization of
Cyprus’ road transportation sector by utilizing alternative greener emissions, efficient
sources of energy for their operational processes.
6. Financial Analysis
The main purpose of the financial analysis is to compute the project’s financial
performance indicators. The methodology used is the discounted cash flow analysis
(DCF). The following steps were adopted in order to carry out the analysis.
Only cash inflows and outflows were considered in the analysis. Therefore, non-
cash accounting items such as depreciation are not included.
An appropriate Financial Discount Rate (FDR) was adopted in order to calculate
the present values of the future cash flows. The financial discount rate reflects the
opportunity cost of capital.
The number of years for which forecast are provided should correspond to the
project’s time horizon.
The financial analysis aims at evaluating the financial profitability of the investment, at
determining the appropriate contribution from the funds and finally at checking the
financial sustainability. The financial profitability of the investment can be evaluated by
estimating the financial net present value (FNPV) and the financial rate of return of the
investment (FRR). More specifically, the FNPV indicator is the difference between the
present value of cash inflows and the present value of cash outflows that occur as a result
of undertaking an investment project over a period of time. A positive net present value
shows that the projected earnings generated by an investment exceeds the anticipated
costs and therefore the project is acceptable. On the other hand, if the net present value is
negative the project should be rejected.
In addition, the internal rate of return is the discount rate which equates the present value
of an investment to zero. More specifically, it is the discount rate which equates the
present value of the future cash flows of an investment with the initial investment. It should
be noted that if the FRR promised by the investment project is greater than or equal to the
minimum required rate of return, which in our case is 4% the project is considered
19
Cost Benefit Analysis of NG in Cyprus for Road Transportation
acceptable otherwise the project is rejected. However, it should be noted that the FRR is
not suitable for projects with a non-typical distribution of cash flows.
The financial analysis is performed not including VAT or taxes for a reference period of 25
years which is common for transport projects, including both implementation (one year)
and operation (twenty-four years). In addition, the financial analysis uses a 4% discount
rate in real terms which is in-line with the EU wide benchmark set by the Commission.
It should be noted that contingencies are not included in the financial analysis. In addition,
the analysis was conducted by using constant (real) prices of 2018 without inflation which
will cause prices to increase over the life of the project. Based on the fact that the
economic lifetime of the LNG tanker trucks is 15 years, within the time horizon (25 years)
of the analysis, replacements will take place, in contrast with the economic lifetime of the
LCNG stations, which is 25 years, so their replacement is not predicted in our analysis.
Investment Cost
The cost estimate for the proposed supply chain of NG fuel (in both forms of CNG/LNG) is
based on conceptual designs and cost estimations, since the works have not been
tendered yet. The cost estimate is made on constant prices of 2018 and on market inputs.
The total investment cost takes into consideration indicative load sizes of the appropriate
equipment components that will cover the estimated quantities of NG fuel according to the
future demand scenario for road transportation use, with the basic assumptions made by
DDL – Decision Dynamics Ltd and the penetration parameters that were used.
The estimates include all costs incurred during the implementation period of the project. In
particular, the investment cost of the NG demand scenario includes three (3) LNG tanker
trucks (in the reference year of 2019, while their cost estimate is based on market data by
20
Investment CostOperating Costs and
RevenuesSources of Financing
Financial Return on Investment -
FNPV(C)Financial
SustainablityFinancial Return on Capital - FNPV(K)
Cost Benefit Analysis of NG in Cyprus for Road Transportation
Blue Grid Gas and Power) and seven (7) LCNG stations during the reference period of
2019-2043 (5 LCNG stations in 2019 and other two will be added in 2030, while their cost
estimate is based on LNG Blue Corridors project which includes manufacturers’ indicative
offers).
The estimated useful economic life for the LCNG stations has been set to 25 years, while
for the LNG trucks to 15 years. Considering that the time horizon of the financial analysis
is 25 years, it is expected that there will be no replacement cost of the LCNG stations in
contrast with LNG trucks during the implementation period of the project. Based on the
above, the investment cost of the specific demand scenario is given in the tables below:
Capex for LCNG Stations – Road Transportation DemandLCNG Stations 2019 2030
Ammochostos Province 1.116.000 € 0 €Larnaca Province 1.116.000 € 0 €Lemesos Province 1.116.000 € 1.116.000 €Leukosia Province 1.116.000 € 1.116.000 €Paphos Province 1.116.000 € 0 €
Total Capex Cyprus 5.580.000 € 2.232.000 €
Table 3: Total Investment Cost for LCNG Stations for Road Transportation Use. Source: LNG Blue Corridors Project’s cost estimate (EUR).
Capex for LNG Tanker Trucks – Road Transportation DemandLNG Trucks 2019
Total Capex Cyprus 630.000 € (210.000 € per truck)
Table 4: Total Investment Cost for LNG Tanker Trucks for Road Transportation Use. Source: BlueGrid Gas and Power Sub-activity 4.1 (EUR).
Operating Costs and Revenues
The operating costs include all the costs related to the operation and maintenance of the
proposed supply chain, adapted to our demand scenario. The operating costs are divided
into fixed and variable costs. As part of this analysis they have been estimated for each
component of the proposed supply chain their operating costs. It should be noted that, the
operating costs of the proposed supply chain are estimates that have been provided by
FCN Energy Logistics Ltd, based on market data.
The operational costs for the LNG tanker trucks include the following expenses:
21
Cost Benefit Analysis of NG in Cyprus for Road Transportation
- Driver’s cost: one person was assumed with gross wages of 3,800 euros per
month.
- Maintenance cost: 4,5% of the LNG tanker truck investment cost due to their
frequent unloads.
- Insurance cost: 4,5% of the LNG tanker truck investment cost due to their
potential increased corrosion.
- Fuel consumption: the fuel consumption takes into consideration the fuel
consumption of the LNG tanker trucks (0.3 l/km for Diesel Fuel), the distance that
should be covered to reach the respective industrial area (section 5.2) and the
fuel price (1,58 € average price for Diesel fuel in Cyprus).
- Other operating costs including general management.
The operational costs for the LCNG stations include the following expenses:
- Insurance cost: 4,5% of the LCNG station investment cost (based on BlueHUBS
project’s cost estimate).
- Maintenance cost: 4,5% of the LCNG station investment cost. (based on
BlueHUBS project’s cost estimate).
- Other costs including general management.
- Electricity cost, that is based on the cost estimate used in BlueHUBS project and
provided by Blue Grid Gas & Power for a LCNG Station with power consumption of
70kW.
Regarding the revenues are cash in-flows directly paid by the road transportation users for
the services provided by the proposed supply chain for our specific demand scenario.
More specifically, the use of NG (in both forms of LNG and CNG) creates future benefits
in cash flows (cost savings for the road transportation users) in terms of fuel cost.
Therefore, the calculation of the benefits for our scenario derived from the estimated
demand (as resulted from the future demand assumptions and the penetration factor of
5% in Cyprus to the new car sales in 2040) for road transportation users and the CNG
price (approx. 0,889 €/kg based on Greek market data 2018 provided by DEPA) within
100 driving kilometres, resulted from the average CNG fuel consumption per vehicle
category.
In particular, for assessing the final benefits for each vehicle category, we used as input
their average fuel consumption in 100 driving kilometers (Diesel or Gasoline in
dependence with the vehicle category) and converted them to the respective average NG
fuel consumption as it is shown in the following table.
22
Cost Benefit Analysis of NG in Cyprus for Road Transportation
AVERAGE FUEL CONSUMPTION (lt/100 klm) LNG/CNG SWITC
HFUEL VEHICLE TYPE PER TYPICAL
VEHICLE€/
100klm€/klm kg /
100klmkg / klm
CNG Gasoline Private Cars (AVG) 5,9 lt/100 km 6,76 0,068 3,22 0,0322CNG Diesel Taxis 5,1 lt/100 km 6,29 0,063 3,18 0,0318CNG Diesel Public Buses 62 lt/100 km 76,51 0,765 38,7 0,387CNG Diesel Private Buses 55 lt/100 km 67,87 0,679 35,58 0,3558CNG Gasoline Light Trucks 30 lt/100 km 34,35 0,344 16,42 0,1642LNG Diesel Heavy Trucks 38 lt/100 km 46,89 0,469 25,84 0,2584CNG Diesel Tractors 45 lt/100 km 55,53 0,555 28,09 0,2809
CNG/LNG Average price (EUR/kg)
Average consumption (kg/100km)
Cost (EUR/100km) Savings
Private Cars 0,889 3,22 2,86258 58%Taxis 0,889 3,18 2,82702 55%Public Buses 0,889 38,70 34,4043 55%Private Buses 0,889 35,58 31,63062 53%Light Trucks 0,889 16,42 14,59738 58%Heavy Trucks 0,889 25,84 22,97176 51%Tractors 0,889 28,09 24,97201 55%
In the following table, CNG/LNG savings regarding the cost of fuel in 100 driving
kilometers in comparison with vehicles’ current fuel (Diesel or Gasoline and their
respective average sale prices of 2018 in Cyprus) are presented.
In general, the aforementioned cost estimate for CNG/LNG fuel in 100 driving kilometers
for each vehicle type should consist the indicative maximum delivered price range of NG
fuel in the road transportation sector in order to compete its competitive and current fuels
to enable a smooth switch from them, without factoring into the total NG transportation
and regasification/decompress cost in this analysis.
Below, total revenues and operating costs for road transportation sector as well as the
discounted net revenues of the project are presented in detail.
23
Cost Benefit Analysis of NG in Cyprus for Road Transportation
24
Cost Benefit Analysis of NG in Cyprus for Road Transportation
Operating Revenues and Costs (EUR)
Years 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Total 1 2 3 4 5 6 7 8 9 10 11Private Cars 0 224.792 269.750 314.708 359.667 404.625 449.583 539.500 629.417 719.334 809.250Light Trucks 0 229.249 275.099 320.949 366.799 412.648 458.498 550.198 641.897 733.597 825.297Total Revenues of CNG/Gasoline (€/km)
34.961.142 0 454.041 544.849 635.657 726.465 817.273 908.082 1.089.698 1.271.314 1.452.931 1.634.547
Taxis 0 5.814 6.977 8.140 9.303 10.466 11.629 13.954 16.280 18.606 20.932Public Buses 0 59.121 70.945 82.769 94.593 106.418 118.242 141.890 165.538 189.187 212.835Private Buses 0 18.110 21.732 25.354 28.976 32.598 36.220 43.464 50.708 57.952 65.196Tractors 0 31.911 38.293 44.675 51.057 57.439 63.821 76.585 89.350 102.114 114.878Total Revenues of CNG/Diesel (€/km)
8.851.585 0 114.956 137.947 160.938 183.929 206.920 229.911 275.894 321.876 367.858 413.840
Heavy Trucks 0 185.397 222.476 259.556 296.635 333.714 370.794 444.952 519.111 593.270 667.429Total Revenues of LNG/Diesel (€/km)
14.275.558 0 185.397 222.476 259.556 296.635 333.714 370.794 444.952 519.111 593.270 667.429
Total Revenues 58.088.285 0 754.393 905.272 1.056.151 1.207.029 1.357.908 1.508.787 1.810.544 2.112.301 2.414.059 2.715.816Drivers Cost 0 159.600 159.600 159.600 159.600 159.600 159.600 159.600 159.600 159.600 159.600Maintenance Cost 0 28.350 28.350 28.350 28.350 28.350 28.350 28.350 28.350 28.350 28.350Insurance Cost 0 28.350 28.350 28.350 28.350 28.350 28.350 28.350 28.350 28.350 28.350Fuel Consumption
0 502.348 502.348 502.348 502.348 502.348 502.348 502.348 502.348 502.348 502.348
Other Costs 0 125.000 125.000 125.000 125.000 125.000 125.000 125.000 125.000 125.000 125.000Total Operating Costs for LNG Tanker Trucks
20.247.561 0 843.648 843.648 843.648 843.648 843.648 843.648 843.648 843.648 843.648 843.648
Ammochostos Province
0 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540
Larnaca Province 0 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540Lemesos Province
0 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540
Leukosia Province
0 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540
Paphos Province 0 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540Total Operating
25
Cost Benefit Analysis of NG in Cyprus for Road Transportation
Costs for LCNG Stations
20.104.800 0 837.700 837.700 837.700 837.700 837.700 837.700 837.700 837.700 837.700 837.700
Total Operating Costs
40.352.361 0 1.681.348 1.681.348 1.681.348 1.681.348 1.681.348 1.681.348 1.681.348 1.681.348 1.681.348 1.681.348
Net Revenues 17.735.924 0 (926.955) (776.076) (625.198) (474.319) (323.440) (172.562) 129.196 430.953 732.710 1.034.468Operating
Revenues and Costs (EUR)
2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040-2043
12 13 14 15 16 17 18 19 20 21 22-25Private Cars 899.167 899.167 899.167 899.167 899.167 899.167 899.167 899.167 899.167 899.167 3.596.668
Light Trucks 916.996 916.996 916.996 916.996 916.996 916.996 916.996 916.996 916.996 916.996 3.667.985Total Revenues of CNG/Gasoline (€/km)
1.816.163 1.816.163 1.816.163 1.816.163 1.816.163 1.816.163 1.816.163 1.816.163 1.816.163 1.816.163 7.264.653
Taxis 23.257 23.257 23.257 23.257 23.257 23.257 23.257 23.257 23.257 23.257 93.029
Public Buses 236.484 236.484 236.484 236.484 236.484 236.484 236.484 236.484 236.484 236.484 945.934
Private Buses 72.439 72.439 72.439 72.439 72.439 72.439 72.439 72.439 72.439 72.439 289.758
Tractors 127.642 127.642 127.642 127.642 127.642 127.642 127.642 127.642 127.642 127.642 510.569
Total Revenues of CNG/Diesel (€/km)
459.823 459.823 459.823 459.823 459.823 459.823 459.823 459.823 459.823 459.823 1.839.290
Heavy Trucks 741.587 741.587 741.587 741.587 741.587 741.587 741.587 741.587 741.587 741.587 2.966.350Total Revenues of LNG/Diesel (€/km)
741.587 741.587 741.587 741.587 741.587 741.587 741.587 741.587 741.587 741.587 2.966.350
Total Revenues 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 12.070.293Drivers Cost 159.600 159.600 159.600 159.600 159.600 159.600 159.600 159.600 159.600 159.600 638.400Maintenance Cost 28.350 28.350 28.350 28.350 28.350 28.350 28.350 28.350 28.350 28.350 113.400Insurance Cost 28.350 28.350 28.350 28.350 28.350 28.350 28.350 28.350 28.350 28.350 113.400Fuel Consumption 502.348 502.348 502.348 502.348 502.348 502.348 502.348 502.348 502.348 502.348 2.009.394Other Costs 125.000 125.000 125.000 125.000 125.000 125.000 125.000 125.000 125.000 125.000 500.000Total Operating Costs for LNG Tanker Trucks
843.648 843.648 843.648 843.648 843.648 843.648 843.648 843.648 843.648 843.648 3.374.594
Ammochostos Province
167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 670.160
Larnaca Province 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 670.160Lemesos Province 167.540 335.080 335.080 335.080 335.080 335.080 335.080 335.080 335.080 335.080 1.340.320Leukosia Province 167.540 335.080 335.080 335.080 335.080 335.080 335.080 335.080 335.080 335.080 1.340.320
26
Cost Benefit Analysis of NG in Cyprus for Road Transportation
Paphos Province 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 670.160Total Operating Costs for LCNG Stations
837.700 1.172.780 1.172.780 1.172.780 1.172.780 1.172.780 1.172.780 1.172.780 1.172.780 1.172.780 3.350.800
Total Operating Costs
1.681.348 2.016.428 2.016.428 2.016.428 2.646.428 2.016.428 2.016.428 2.016.428 2.016.428 2.016.428 6.725.394
Net Revenues 1.336.225 1.001.145 1.001.145 1.001.145 371.145 1.001.145 1.001.145 1.001.145 1.001.145 1.001.145 5.344.900
Table 5: Total Revenues and Operating Costs for Road Transportation.
27
Cost Benefit Analysis of NG in Cyprus for Road Transportation
Investment Costs and Revenues (Eur)
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Discounted Investment Cost (DIC)
NPV 4% Construction
Period
Operation
LCNG Stations 6.759.485 5.580.000 0 0 0 0 0 0 0 0 0 0
LNG Tanker Trucks 605.769 630.000 0 0 0 0 0 0 0 0 0 0
Discounted Investment Cost 7.365.254 6.210.000 0 0 0 0 0 0 0 0 0 0
Discounted Net Revenues (DNR)A. Benefits of CNG/Gasoline (€/km)
Private Cars 9.691.485 0 224.792 269.750 314.708 359.667 404.625 449.583 539.500 629.417 719.334 809.250
Light Trucks 9.883.654 0 229.249 275.099 320.949 366.799 412.648 458.498 550.198 641.897 733.597 825.297
Total Benefits from Gasoline 19.575.139 0 454.041 544.849 635.657 726.465 817.273 908.082 1.089.698
1.271.314
1.452.931 1.634.547
B. Benefits Of CNG/Diesel (€/km)
Taxis 250.673 0 5.814 6.977 8.140 9.303 10.466 11.629 13.954 16.280 18.606 20.932
Public Buses 2.548.889 0 59.121 70.945 82.769 94.593 106.418 118.242 141.890 165.538 189.187 212.835
Private Buses 780.774 0 18.110 21.732 25.354 28.976 32.598 36.220 43.464 50.708 57.952 65.196
Tractors 1.375.766 0 31.911 38.293 44.675 51.057 57.439 63.821 76.585 89.350 102.114 114.878
Total Benefits from Diesel 4.956.102 0 114.956 137.947 160.938 183.929 206.920 229.911 275.894 321.876 367.858 413.840
C. Benefits of LNG/Diesel (€/km)
Heavy Trucks 7.993.047 0 185.397 222.476 259.556 296.635 333.714 370.794 444.952 519.111 593.270 667.429
Total Benefits from Diesel 7.993.047 0 185.397 222.476 259.556 296.635 333.714 370.794 444.952 519.111 593.270 667.429
Total Revenues 32.524.289 0 754.393 905.272 1.056.151 1.207.029
1.357.908
1.508.787 1.810.544
2.112.301
2.414.059 2.715.816
A. Operating Costs for LNG Tanker Trucks
Drivers Cost 2.339.822 0 159.600 159.600 159.600 159.600 159.600 159.600 159.600 159.600 159.600 159.600
Maintenance Cost 415.626 0 28.350 28.350 28.350 28.350 28.350 28.350 28.350 28.350 28.350 28.350
Insurance Cost 415.626 0 28.350 28.350 28.350 28.350 28.350 28.350 28.350 28.350 28.350 28.350
28
Cost Benefit Analysis of NG in Cyprus for Road Transportation
Fuel Consumption 7.364.699 0 502.348 502.348 502.348 502.348 502.348 502.348 502.348 502.348 502.348 502.348
Other Costs 1.832.568 0 125.000 125.000 125.000 125.000 125.000 125.000 125.000 125.000 125.000 125.000
Replacement Cost 336.362 0 0 0 0 0 0 0 0 0 0 0
Total Discounted Operating Costs for LNG Tanker
Trucks12.704.704 0 843.648 843.648 843.648 843.648 843.648 843.648 843.648 843.648 843.648 843.648
B. Operating Costs for LCNG Stations
Ammochostos Province 2.456.227 0 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540
Larnaca Province 2.456.227 0 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540
Lemesos Province 3.501.175 0 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540
Leukosia Province 3.501.175 0 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540
Paphos Province 2.456.227 0 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540
Total Discounted Operating Costs for LCNG Stations
14.371.032 0 837.700 837.700 837.700 837.700 837.700 837.700 837.700 837.700 837.700 837.700
Total Discounted Cash Outflows
27.075.736 0 1.681.348 1.681.348 1.681.348 1.681.348
1.681.348
1.681.348 1.681.348
1.681.348
1.681.348 1.681.348
Discounted Net Revenues 5.448.553 0 (926.955) (776.076) (625.198) (474.319) (323.440) (172.562) 129.196 430.953 732.710 1.034.468
Investment Costs and Revenues (Eur)
2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040-2043
Discounted Investment Cost (DIC) Operation
LCNG Stations 2.232.000
0 0 0 0 0 0 0 0 0 0
LNG Tanker Trucks 0 0 0 0 0 0 0 0 0 0 0
Discounted Investment Cost 2.232.000
0 0 0 0 0 0 0 0 0 0
Discounted Net Revenues (DNV)A. Benefits of CNG/Gasoline (€/Km)
Private Cars 899.167 899.167 899.167 899.167 899.167 899.167 899.167 899.167 899.167 899.167 3.596.668
29
Cost Benefit Analysis of NG in Cyprus for Road Transportation
Light Trucks 916.996 916.996 916.996 916.996 916.996 916.996 916.996 916.996 916.996 916.996 3.667.985
Total Benefits from Gasoline 1.816.163
1.816.163 1.816.163 1.816.163 1.816.163 1.816.163 1.816.163 1.816.163 1.816.163 1.816.163
7.264.653
B. Benefits of CNG/Diesel (€/Km)
Taxis 23.257 23.257 23.257 23.257 23.257 23.257 23.257 23.257 23.257 23.257 93.029
Public Buses 236.484 236.484 236.484 236.484 236.484 236.484 236.484 236.484 236.484 236.484 945.934
Private Buses 72.439 72.439 72.439 72.439 72.439 72.439 72.439 72.439 72.439 72.439 289.758
Tractors 127.642 127.642 127.642 127.642 127.642 127.642 127.642 127.642 127.642 127.642 510.569
Total Benefits from Diesel 459.823 459.823 459.823 459.823 459.823 459.823 459.823 459.823 459.823 459.823 1.839.290
C. Benefits of LNG/Diesel (€/Km)
Heavy Trucks 741.587 741.587 741.587 741.587 741.587 741.587 741.587 741.587 741.587 741.587 2.966.350
Total Benefits from Diesel 741.587 741.587 741.587 741.587 741.587 741.587 741.587 741.587 741.587 741.587 2.966.350
Total Revenues 3.017.573
3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573
12.070.293
A. Operating Costs for LNG Tanker Trucks
Drivers Cost 159.600 159.600 159.600 159.600 159.600 159.600 159.600 159.600 159.600 159.600 638.400
Maintenance Cost 28.350 28.350 28.350 28.350 28.350 28.350 28.350 28.350 28.350 28.350 113.400
Insurance Cost 28.350 28.350 28.350 28.350 28.350 28.350 28.350 28.350 28.350 28.350 113.400
Fuel Consumption 502.348 502.348 502.348 502.348 502.348 502.348 502.348 502.348 502.348 502.348 2.009.394
Other Costs 125.000 125.000 125.000 125.000 125.000 125.000 125.000 125.000 125.000 125.000 500.000
Replacement Cost 0 0 0 0 630.000 0 0 0 0 0 0
Total Discounted Operating Costs for LNG Tanker Trucks
843.648 843.648 843.648 843.648 1.473.648 843.648 843.648 843.648 843.648 843.648 3.374.594
B. Operating Costs for LCNG Stations
30
Cost Benefit Analysis of NG in Cyprus for Road Transportation
Ammochostos Province 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 670.160
Larnaca Province 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 670.160
Lemesos Province 167.540 335.080 335.080 335.080 335.080 335.080 335.080 335.080 335.080 335.080 1.340.320
Leukosia Province 167.540 335.080 335.080 335.080 335.080 335.080 335.080 335.080 335.080 335.080 1.340.320
Paphos Province 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 167.540 670.160
Total Discounted Operating Costs for LCNG Stations
837.700 1.172.780 1.172.780 1.172.780 1.172.780 1.172.780 1.172.780 1.172.780 1.172.780 1.172.780
4.691.120
Total Discounted Cash Outflows 1.681.348
2.016.428 2.016.428 2.016.428 2.646.428 2.016.428 2.016.428 2.016.428 2.016.428 2.016.428
8.065.714
Discounted Net Revenues 1.336.225
1.001.145 1.001.145 1.001.145 371.145 1.001.145 1.001.145 1.001.145 1.001.145 1.001.145
4.004.580
Table 6: Calculation of Discounted Net Revenues for Road Transportation.
31
Cost Benefit Analysis of NG in Cyprus for Road Transportation
Sources of Financing
Based on the above and on the fact the that the project is a net revenue generating
operation in the meaning of the Article 61 of Regulation (EU) 1303/2013, the contribution
of the EU Regular Fund to the project has been determined using the method based on
the calculation of the discounted net revenue.
The construction of the LCNG stations and the procurement of the LNG tanker trucks will
be considered for submission under the Cohesion Fund of the Connecting Europe Facility
(CEF) which supports trans-European networks and infrastructures in the sector of
transport) with a co-financing rate of the relevant priority axis is 30%. The resulting pro-
rata application of discounted net revenues resulted in 26%. This multiplied with the
eligible cost (8.442.000 EUR) and the co-financing rate of the relevant priority results an
EU grant of 2.196.909 EUR. The remainder of the investment, it is assumed that will be
provided by private contribution (54%) and private loan (20%).
Table 7: Sources of Financing (EUR).
Based on the above, the cash-flows for the financial analysis that have been shown in the
previous tables including the calculation of the relevant financial performance indicators of
the project.
32
26% EU Grant
54% Equity
20% Loan
100%
Investment Cost
Sources of Financing (EUR)
Total Total 2019 2030Financing Sources M Eur % Share 1 2Eu Grant 2.196.90
926% 1.616.013 580.846
Private Contribution 4.556.691
54% 3.351.937 1.204.754
Private Loan 1.688.400
20% 1.242.000 446.400
Total Funding 8.442.000
100% 6.210.000 2.232.000
Cost Benefit Analysis of NG in Cyprus for Road Transportation
Following the calculation of the EU Grant is eligible to acquire based on its financial inputs
and the relevant priority axis, the financial analysis continues for our road transportation
demand scenario. The financial profitability of the investment (as indicated by FNPV (C)
and FNPV (K) (Tables 8 and 9) for our basic demand scenario is negative before the EU
Grant, as expected for a project with significant investment cost. The negative financial
net present value of the investment (FNPV (C) = EUR -1,916,702) shows that the project
requires EU assistance but is not viable only with the contribution of an EU grant. For
covering part of the total investment, a loan is assumed with an amortisation period of 15
years and a fixed interest rate in real terms. Therefore, it should be mentioned that either
the project’s investment cost should be reduced or several incentives should be provided
by the implementation plan of Activity 4, which will include alternative penetration
strategies for increasing the NG demand in the road transportation sector of Cyprus.
For the programming period 2014-2020 the European Commission recommends that the
financial discount rate 4% is used for major projects. The tables that follow show the
results of the financial analysis.
Finally, the analysis of the financial sustainability at project level (Table 10) aims to assess
whether the project is able to balance out its positive and negative cash flows during the
reference period (25 years). The analysis shows that the project implementation costs are
covered by means of the EU grant, a loan and private equity. Newly established
technologies, are expected to produce negative cash flows during project operations. In
order for the project to be sustainable, the balance between inflows and outflows must be
reached by means of increased compensation by the project beneficiary, both in terms of
losses and in terms of loan repayment. The financial sustainability illustrates that the
project beneficiary is committed to increase compensation to the extent that it covers the
operating losses, in order to provide evidence that the financial sustainability of the project
can be ensured.
As it was aforementioned, the analysis has illustrated a project that is not acceptable and
financially viable only with the contribution of an EU grant, although its net present value is
marginally negative (FNPV (K) = EUR -60,916) and the FRR (4%) of our investment after
EU Grant is equal to the minimum required rate of return, which in our case is 4% and
equates the present value of the investment to zero. As for the investment cost during
33
Cost Benefit Analysis of NG in Cyprus for Road Transportation
implementation, it is covered by different financing sources and its cumulated net cash
flow during operations is positive mostly in the second half of the evaluation period.
34
Cost Benefit Analysis of NG in Cyprus for Road Transportation
Financial Return on Investment (EUR)
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 NPV 4% CONSTRUCTION
PERIODOPERATION
PERIOD
Revenues 32.524.289
0 754.393 905.272 1.056.151
1.207.029
1.357.908
1.508.787
1.810.544
2.112.301
2.414.059
2.715.816
Total Discounted Revenues
32.524.289
0 754.393 905.272 1.056.151
1.207.029
1.357.908
1.508.787
1.810.544
2.112.301
2.414.059
2.715.816
LNG tanker Trucks 6.759.485 5.580.000 0 0 0 0 0 0 0 0 0 0LcNG Stations 605.769 630.000 0 0 0 0 0 0 0 0 0 0Total Investment Costs 7.365.254 6.210.000 0 0 0 0 0 0 0 0 0 0Discounted Operating Costs (Incl. Replacement Cost)
27.075.736
0 1.681.348 1.681.348
1.681.348
1.681.348
1.681.348
1.681.348
1.681.348
1.681.348
1.681.348
1.681.348
Total Cash Outflows 27.075.736
0 1.681.348 1.681.348
1.681.348
1.681.348
1.681.348
1.681.348
1.681.348
1.681.348
1.681.348
1.681.348
FNPV (C) / Net Cash-Flow (1.916.702)
(6.210.000) (926.955) (776.076) (625.198) (474.319) (323.440) (172.562) 129.196 430.953 732.710 1.034.468
FRR (C) 2.4%
Financial Return on Investment (EUR)
2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040-2043
NPV 4%
Revenues 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573
3.017.573 3.017.573 3.017.573 3.017.573 3.017.573
12.070.293
Total Discounted Revenues 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573
3.017.573 3.017.573 3.017.573 3.017.573 3.017.573
12.070.293
LNG TANKER Trucks 2.232.000 0 0 0 0 0 0 0 0 0 0
LcNG Stations 0 0 0 0 0 0 0 0 0 0 0
Total Investment Costs 2.232.000 0 0 0 0 0 0 0 0 0 0Discounted Operating Costs (Incl. Replacement Cost)
1.681.348 2.016.428 2.016.428 2.016.428 2.646.428
2.016.428 2.016.428 2.016.428 2.016.428 2.016.428
8.065.714
Total Cash Outflows 1.681.348 2.016.428 2.016.428 2.016.428 2.646.428
2.016.428 2.016.428 2.016.428 2.016.428 2.016.428
8.065.714
FNPV (C) / Net Cash-Flow (Before EU Grant)
(895.775) 1.001.145 1.001.145 1.001.145 371.145 1.001.145 1.001.145 1.001.145 1.001.145 1.001.145
4.004.580
35
Cost Benefit Analysis of NG in Cyprus for Road Transportation
Table 8: Financial Return on Investment (EUR)
36
Cost Benefit Analysis of NG in Cyprus for Road Transportation
Financial Return on Capital (EUR)
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
NPV 4% CONSTRUCTION PERIOD
OPERATION PERIOD
Net Revenues 32.524.289
0 754.393 905.272 1.056.151 1.207.029
1.357.908
1.508.787
1.810.544
2.112.301
2.414.059
2.715.816
Total Discounted Revenues
32.524.289
0 754.393 905.272 1.056.151 1.207.029
1.357.908
1.508.787
1.810.544
2.112.301
2.414.059
2.715.816
Private Equity 3.975.502 3.351.937 0 0 0 0 0 0 0 0 0 0
Total Contribution 3.975.502 3.351.937 0 0 0 0 0 0 0 0 0 0
Loan Repayments 1.533.967 0 143.485 143.485 143.485 143.485 143.485 143.485 143.485 143.485 143.485 143.485
Operating Costs (incl. Replacement Cost)
27.075.736
0 1.681.348 1.681.348
1.681.348 1.681.348
1.681.348
1.681.348
1.681.348
1.681.348
1.681.348
1.681.348
Total Cash Outflows 28.609.703
0 1.824.834 1.824.834
1.824.834 1.824.834
1.824.834
1.824.834
1.824.834
1.824.834
1.824.834
1.824.834
FNPV (K)/ Net Cash-Flow (After EU Grant)
(60.916) (3.351.937) (1.070.440) (919.562) (768.683) (617.804) (466.926) (316.047) (14.290) 287.468 589.225 890.982
FRR (K) 4%
Financial Return on Capital (EUR)
2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040-2043
NPV 4%
Net Revenues 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 12.070.293
Total Discounted Net Revenues
3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 12.070.293
Private Equity 1.204.754 0 0 0 0 0 0 0 0 0 0
Total Contribution 1.204.754 0 0 0 0 0 0 0 0 0 0
Loan Repayments 143.485 143.485 143.485 143.485 143.485 0 0 0 0 0 0
Operating Costs (incl. Replacement)
1.681.348 2.016.428 2.016.428 2.016.428 2.646.428 2.016.428 2.016.428 2.016.428 2.016.428 2.016.428 8.065.714
37
Cost Benefit Analysis of NG in Cyprus for Road Transportation
Total Cash Outflows 1.824.834 2.159.914 2.159.914 2.159.914 2.789.914 2.016.428 2.016.428 2.016.428 2.016.428 2.016.428 8.065.714
FNPV (K) / NetCash-Flow (After EU Grant)
(12.015) 857.660 857.660 857.660 227.660 1.001.145 1.001.145 1.001.145 1.001.145 1.001.145 4.004.580
Financial Sustainability (EUR)
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
CONSTRUCTION PERIOD
OPERATION
Eu Grant 1.616.063 0 0 0 0 0 0 0 0 0
Promoter's Contribution 3.351.937 0 0 0 0 0 0 0 0 0
Private Loan 1.242.000 0 0 0 0 0 0 0 0 0
Revenues 0 754.393 905.272 1.056.151 1.207.029 1.357.908 1.508.787 1.810.544 2.112.301 2.414.059 2.715.816
Total Inflows 6.210.000 754.393 905.272 1.056.151 1.207.029 1.357.908 1.508.787 1.810.544 2.112.301 2.414.059 2.715.816
Investment Cost 6.210.000 0 0 0 0 0 0 0 0 0
Loan Repayments 0 143.485 143.485 143.485 143.485 143.485 143.485 143.485 143.485 143.485 143.485
Operating Costs (incl. Replacement Cost)
0 1.681.348 1.681.348 1.681.348 1.681.348 1.681.348 1.681.348 1.681.348 1.681.348 1.681.348 1.681.348
Total Outflows 6.210.000 1.824.834 1.824.834 1.824.834 1.824.834 1.824.834 1.824.834 1.824.834 1.824.834 1.824.834 1.824.834
Cash Flows Before Tax 0 (1.070.440) (919.562) (768.683) (617.804) (466.926) (316.047) (14.290) 287.468 589.225 890.982
Cumulative Net Cash Flows 0 (1.070.440) (1.990.002) (2.758.685)
(3.376.490) (3.843.415)
(4.159.462) (4.173.752)
(3.886.285) (3.297.060)
(2.406.077)
Table 9: Financial Return on Capital (EUR).
38
Cost Benefit Analysis of NG in Cyprus for Road Transportation
39
Cost Benefit Analysis of NG in Cyprus for Road Transportation
Financial Sustainability (EUR)
2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040-2043
Eu Grant 580.846 0 0 0 0 0 0 0 0 0 0
Promoter's Contribution 1.204.754 0 0 0 0 0 0 0 0 0 0
Private Loan 446.400 0 0 0 0 0 0 0 0 0 0
Revenues 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 12.070.293
Total Inflows 5.249.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 3.017.573 12.070.293
Investment Cost 2.232.000 0 0 0 0 0 0 0 0 0 0
Loan Repayments 143.485 143.485 143.485 143.485 143.485 0 0 0 0 0 0
Operating Costs (Incl. Replacement Cost)
1.681.348 2.016.428 2.016.428 2.016.428 2.646.428 2.016.428 2.016.428 2.016.428 2.016.428 2.016.428 8.065.714
Total Outflows 4.056.834 2.159.914 2.159.914 2.159.914 2.789.914 2.016.428 2.016.428 2.016.428 2.016.428 2.016.428 8.065.714
Cash Flows Before Tax 1.192.740 857.660 857.660 857.660 227.660 1.001.145 1.001.145 1.001.145 1.001.145 1.001.145 4.004.580
Cumulative Net Cash Flows (1.213.338) (355.678) 501.981 1.359.641 1.587.300 2.588.445 3.589.590 4.590.735 5.591.880 6.593.025 36.383.549
Table 10: Financial Sustainability (EUR).
40
Cost Benefit Analysis of NG in Cyprus for Road Transportation
The below figures summarize the expected revenues per year, vehicle type and other fuels.
2020 2025 2030
754,393.32 €
1,975,421.68 €
3,950,843.35 €
Expected revenues
Figure 4: Expected Revenues per years – Road Transportation Demand
Private Cars Light Trucks Taxis Public Buses Private Buses Tractors Heavy Trucks
17,308,964.15 €
17,652,178.27 €
447,701.61 €
4,552,308.27 €
1,394,460.32 €
2,457,114.40 €
14,275,558.42 €
Expected Revenues per Vehicle Type
Figure 5: Expected Revenues per Vehicle Type – Road Transportation Demand
41
Cost Benefit Analysis of NG in Cyprus for Road Transportation
2020 2025 2030
615,913 €
1,231,826 €
2,463,652 €
139,278 €278,556 €
557,113 €
193,052 €386,103 €
772,207 €
Total Benefits of CNG/LNG from substitute fuels
Benefits CNG/Gasoline Benefits CNG/Diesel Benefits LNG/Diesel
Figure 6: Total Benefits of CNG/LNG from Substitute Fuels – Road Transportation Demand
The below figures depict the Cashflows and the EBITDA and Net cashflows of the project.
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
-1,500,000
-1,000,000
-500,000
0
500,000
1,000,000
1,500,000
-2500%
-2000%
-1500%
-1000%
-500%
0%
500%
Cash Flows before Tax
Cash Flows before Tax y-o-y change (%)
Figure 7: Cashflows before Tax – Road Transportation Demand
42
Cost Benefit Analysis of NG in Cyprus for Road Transportation
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
(€1,500,000.00)
(€1,000,000.00)
(€500,000.00)
€0.00
€500,000.00
€1,000,000.00
€1,500,000.00
-200%
-150%
-100%
-50%
0%
50%
100%
150%
200%
250%
300%
EBITDA
Discounted Net Revenues y-o-y change (%)
Figure 8: EBITDA – Road Transportation Demand
20192020
20212022
20232024
20252026
20272028
20292030
20312032
20332034
20352036
20372038
20392040
20412042
2043
-30,000,000
-25,000,000
-20,000,000
-15,000,000
-10,000,000
-5,000,000
0
5,000,000
10,000,000
Net Cash-Flow
Figure 9: Net Cash-flow – Road Transportation Demand
43
Cost Benefit Analysis of NG in Cyprus for Road Transportation
7. Risk Assessment
Sensitivity analysis in the context of investment appraisal enables the identification and
examination of the critical variables of the project. Such variables are those whose
variations, either positive or negative, have the greatest impact on the financial
performance of the project. Variables should be varied one at a time, while keeping the
other parameters constant. In general, those variables for which 1% variation, positive or
negative, gives rise to a corresponding variation of 5% in the FNPV’s base value
considered as critical. Different criteria, however, can also be adopted. On the other hand,
risk analysis assesses the impact of variations on the project’s performance indicators,
without indicating anything about the probability by which this change may occur.
7.1. Sensitivity Analysis
The main purpose of sensitivity analysis is not to quantify the risk but to ascertain the
responsiveness of FNPV (C) and FNPV (K). More specifically, it was performed by
calculating the percentage change of the FNPV (C) and FNPV (K) indicators as a
consequence of 5% increase on the investment cost, namely the capital expenditure of
LCNG stations and LNG tanker trucks, as a consequence of 5% on the price fuel of CNG
as it is fluctuating heavily, as well as a consequence of an application of 8% (i.e. 3%
increase on the 5% penetration factor used in this analysis) NG penetration factor in
Cyprus to the estimated total new car sales in 2040. The sensitivity analysis was
performed for our basic demand scenario for the road transportation sector.
FNPV (C) Base Scenario FNPV (C) Percentage Change (%)
-1.916.701,53 € -2.301.782,36 € 20%
FNPV (K) Base Scenario FNPV (K) Percentage Change (%)
-60.915,92 € -63.961,65 € 5%
The sensitivity analysis revealed that the FNPV (C) indicator regarding the road
transportation sector with the basic demand scenario under examination is more sensitive
to changes in an increase on investment cost by only 5%, while the FNPV (K) is less
sensitive to changes in an increase of the investment cost by 5%. The results of the
responsiveness of the financial indicators are given in the below tables.
44
Cost Benefit Analysis of NG in Cyprus for Road Transportation
Similarly, the sensitivity analysis revealed that the FNPV (C) indicator regarding the road
transportation sector with the basic demand scenario under examination is even more
sensitive to changes in an increase on the NG penetration factor to the estimated total
new car sales by only 3% (i.e. 8% penetration factor), while FNPV (K) indicator is stable.
The results of the responsiveness of the financial indicators are given in the below tables:
FNPV (C) Base Scenario FNPV (C) Percentage Change (%)
-1.916.701,53 € 17.597.871,70 € -1018%
FNPV (K) Base Scenario FNPV (K) Percentage Change (%)
-60.915,92 € -60.915,92 € 0%
Ultimately, the sensitivity analysis revealed that the FNPV (C) indicator regarding the road
transportation sector with the basic demand scenario under examination is even more
sensitive to changes in an increase on the fuel price of CNG by only 5% higher than the
price used in the analysis, while FNPV (K) indicator is stable. The results of the
responsiveness of the financial indicators are given in the below tables:
FNPV (C) Base Scenario FNPV (C) Percentage Change (%)
-1.916.701,53 € -290.487,10 € -85%
FNPV (K) Base Scenario FNPV (K) Percentage Change (%)
-60.915,92 € -60.915,92 € 0%
45
Cost Benefit Analysis of NG in Cyprus for Road Transportation
Appendix
The following prices were used for the calculation of the NG price differentials from the
current fuel mix (Diesel and Gasoline) in vehicles in Cyprus as the average prices of 2018:
Average Price per Fuel of VehiclesUnleaded 95 (Cyprus 2018) 1,15 €Unleaded 98 (Cyprus 2018) 1,21 €
Diesel (Cyprus 2018) 1,23 €CNG (Greece 2018) 0,89 €
Additionally, the following table depicts the average consumption of the vehicles’
categories in Cyprus with the current fuel mix of Diesel and Gasoline in dependence with
their category and their respective cost in the driving distance of the 100 kilometres:
Gasoline / DieselVehicle
CategoryAverage price
(EUR/lt)Average consumption (lt/100km) Cost
(EUR/100km)Private Cars 1,145 5,9 6,7555
Taxis 1,234 5,1 6,2934Public Buses 1,234 62 76,508Private Buses 1,234 55 67,87Light Trucks 1,145 30 34,35
Heavy Trucks 1,234 38 46,892Tractors 1,234 45 55,53
An indicative list of driving kilometres between Cyprus’ Major Cities, that was used for the
assess of the road transportation sector’s demand in kilometres in the Sub-activity 3.1 Is
also presented:
Distance Between Major Cities of Cyprus (klm)City Leukosia Lemesos Larnaca Paphos Ammochostos
Leukosia - 85 55 154 89Lemesos 85 - 71 67 115Larnaca 55 71 - 134 52Paphos 154 67 134 - 181
Ammochostos 89 115 52 181 -
46
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