*4.8. Calculation of the Economical and Viable EFP of the Characterized EFMs*

As previously mentioned, during this step, the calculated flexible power and active duration constitute the practical EFP of the industrial system, assuming all the relevant characteristics of the industrial system and the production facility have been considered. To calculate the economical EFP, the expected gross revenues, as a function of the intended implementation objective of the EFM, have to be estimated. An exact formula for the calculation of the gross revenues depends on the targeted implementation objective, as defined in the first step of the presented methodology. Generally, the gross revenues constitute the monetary savings achieved by the activation of the EFM when compared to the reference operation of the industrial system. Once the gross revenues, *Rflex*, have been calculated, the EFM specific gross revenues, *rflex*,*gross*,*T***,** constitute the ratio between the revenues for the specific period, *T*, and the flexible energy for the same period, as presented in Equation (5).

$$r\_{flex,gross,T} = \frac{R\_{flex}}{\Delta E\_{flex,T}}\tag{5}$$

The difference between *rflex*,*gross*,*<sup>T</sup>* and *cflex*,*<sup>T</sup>* will provide the specific net revenues, *rflex*,*net*,*T*, of the EFM for the period *T*, as presented in Equation (6).

$$r\_{f \text{lex}, \text{net}, T} = r\_{f \text{lex}, \text{gross}, T} - \mathfrak{c}\_{f \text{lex}, T} \tag{6}$$

The *rflex*,*net*,*T*, will define the economic feasibility of the EFM on its current configuration. A negative or equal to zero *rflex*,*net*,*<sup>T</sup>* will indicate that the costs are too high. Therefore, the scope of the EFM needs to be optimized. This usually refers to reducing the activation costs by altering the flexible power, active duration or activation frequency of the EFM. If a cost-reduction is not possible, the EFM is deemed economically unfeasible and needs to be rejected. When the *rflex*,*net*,*<sup>T</sup>* is positive, the EFM will be economically feasible. Nonetheless, the scope of the EFM can be revisited to pursue the maximization of *rflex*,*net*,*T*.

The resulting EFP, once the *rflex*,*net*,T of the EFM is maximized, constitutes the economical EFP. The final step will be to evaluate the scope and financial benefits of the EFM and weight it against other comparable investments, i.e., energy efficiency measures or other EFMs, and then decide on its implementation. This decision might further delimit the scope of the EFM, hence constituting the viable EFP.

At this moment, the EFM is completely identified and characterized and it can be grouped with the other identified EFMs across the facility, thus establishing the EFM catalogue of the facility.
