*2.6. Economic Analysis*

For the economic analysis, it is necessary to evaluate the capital cost of the introduced technology and the reduction in operating costs that can be achieved. The capital costs for compressed air storage installation were calculated using the data reported in [37]. A linear correlation between the installed compressor power (*W*) and the compressor cost (*C*), obtained through specialized surveys, was considered in this basic approach. Equations in the following form were obtained for both components (compressor and storage tank):

$$\mathbb{C}\_{i} = \mathbb{W}\_{i} \times c\_{i} + q \tag{7}$$

The total investment cost (*CTOT*, (€)) is defined as the sum of the capital costs of the installed components. The revenues are defined as the avoided cost for energy purchase, that comes from the load shift due to the compressed air storage. The reduction in operating costs is consequently defined as the difference between the energy cost (purchased in the scenario without air storage) and the effective cost with storage implementation:

$$R\_{\text{ape}} = \mathbb{C}\_{\text{av}, \text{CIP}} + \mathbb{C}\_{\text{av}, \text{tank}} + R\_{\text{TEE}} - \mathbb{C}\_{\text{conv}pr} - \mathbb{C}\_{\text{Od} \& M} \tag{8}$$

In Equation (8), *Cav,CHP* (€/y) is the avoided cost through biogas utilization, *Cav,tank* (€/y) is the avoided cost through the air storage tank, *Ccompr* (€/y) is the cost to compress the air inside the tank, and *CO&M* (€/y) is the operation and maintenance system cost. *RTEE* (€/y) is the share of revenues coming from primary energy saving, due to biogas exploitation from AD. CHP-related variables are set to 0 in the scenario where AD is not considered (Scenario 1). An average economic value of current Italian White certificates, equal to 250 EUR/ton of oil equivalent (toe), has been considered in this basic economic analysis for biogas valorization.

The main economic parameter used for the analysis is the net present value (NPV, (EUR)) calculated with a discount rate of 5.5%.

Another parameter used is the pay-back time (PB, (y)) of the investment (Equation (9)), defined as the total investment cost divided by the revenues obtained from the reduced energy cost:

$$PB = \frac{C\_{TOT}}{R\_{\text{opt}}} \tag{9}$$
