Decision-making Research On EPC Project Of Energy-saving Benefit Sharing Model

Currently, China is in a critical stage to construct a comprehensive well-off society and deepen the reform of economic. The energy-saving services industry as a strategic emerging industry has become a new growth point of China’s economic development. Energy performance contracting (EPC) is a kind of market-oriented investment operation and service promoting mechanism for energy-saving and emission-reducing which is generally adopted and vigorously promoted in the world. Since the EPC mechanism was introduced in china at the end of last century, the energy-saving services and the EPC industry have developed quickly through demonstration, guidance and promotion. Under the EPC, all the investment of energy-saving transformation is paid off by the energy-saving benefit after the transforming project. Compared to a series of research achievements abroad, a large number of domestic researches on EPC stay still in the initial stage. The systematicness of domestic researches is not strong, marked mainly by too much experience summerization, too little theoretical analysis, lack of research on investment evaluation and investmen behavior and so on. Therefore, accelerating the related theory research on new formats, new patterns of energy-saving service mechanism and EPC has great practical significance and urgency for innovation and improvement of core competitiveness in the energy industry and energy-saving service industry.In all kinds of business model of EPC, the energy-saving benefit sharing model has many advantages that other models can not be comparable. For example, it can enjoy the state preferential policies and subsidies, and adapts to the internal developping requirement of the market economy and the social credit system. The project practice in recent years has showed that the energy-saving benefit sharing EPC can effectively stimulate the investing enthusiasm of energy service companies and energy comsuming companies. So it becomes the first choice of energy-saving market and energy service companie, and also the most widely used mode of investing operation. This paper took the project of energy-saving benefit sharing EPC as research object. Its main idea is as follow:researchon value chain of projects, certainty analysis on evalution of investment income and uncertainty analysis on investment decision-making.(1) In this paper, I constructed value chain of EPC projects with structure of network, which is based on the value chain analysis, analyzed value chain’s essential attricute of economics such as scarecity and efficiency as well as characteristics of economic system such as purpose, correlation, stability and hierarchy in a project, and applied the method of life cycle theory constructing the formula of value chain in EPC projects from the narrow and the broad aspect.(2) I investigated fully the characteristics of EPC projects in this paper, studied each element of value chain in a project, took specially the environmental cost as an element in the investment formula, and offered the expression of function relation about value chain. A index system about investment evaluation with two dimensions, namely financial profitability and solvency, was built basing on certainty analysis of investment evaluation, and the solving method of evaluation index was offered with the methods such as interpolation. The influence of depreciation method and repayment method on investment decision was also studied in this paper, which was verified by the EPC project about recuperation of boiler in a thermal power plant. This paper aimed to provide the most comprehensive and reasonable theory support for energy service companies in investment evaluation about a EPC project.(3) In this paper, I applied real option theory constructing a exponential discount model with time preference and a decision-making analysis model with risk preference, which was supplemented by analysis of examples, and discussed the relationship between the optimal investment scale or the optimal investment timing and risk, instantaneous expected growth rate, instantaneous fluctuation rate or risk-free interest rate, and aimed to provide energy service companies references for typical investment behavior such as valuation of value chain, judgement of investment timing and identification of investment risk in EPC projects, and to increase the flexibility modifying investment strategy according to the trend.(4) Three kinds of basic game relationship in EPC project were analyzed in the paper, namely the non cooperative relationship between energy service companies, the non cooperative relationship between energy service companie and energy consuming companies, and the non cooperative relationship between energy service companies and suppliers. I applied game theory constructing analyzing models such as game models about input and output, bidding models and tendering models, and through example analysis studied the influence of the uncertainty in game competition on investment decision of a EPC project. I proposed in the paper an idea about calculating optimal energy-saving investment amout in a EPC project, which is based on a game of complete information, and obtained the relationships between the optimal expected investment income and the number of competitors, the difference between expected return and cost, or the number of suppliers. This paper offered also a simply method to judge the reasonable interval of suppliers number, which can help energy service companies weigh the investment risk before participating in the competition for a project and formulate game rules reducing risk.This paper studied value chain of EPC projects, evaluation of investment decision about projects and influence of investment behavior, aimed to reveal the rules and characteristics of investment decision in EPC projects, which makes the investment mechanism of projects more comprehensive and reasonable. Accelerating the theoretical research on new form, new models of EPC and its core of investment decision has important promoting effect, to popularize EPC, to create new way for energy-saving and emission reduction, to boost energy-saving environmental protection industry into new pillar industries, and to accelerate the construction of clean, efficient, safe and sustainable modern energy system.