Components of Project Costs
- Project Costs:
- Investment costs
- Operating costs
- Investment Costs: Include initial costs and replacement costs
- Initial Costs, referred to as the first cost, which is usually made up of a number of cost elements that do not recur after an activity is initiated. For example, construction and commissioning, including land, civil works, transportation, equipment & installations and other related initial expenditures
Initial cost is the major component of an RE project. Such cost is normally higher in RE projects than in non-RE projects. As such, high initial cost presents the major barrier to the adoption of RETs.
- Replacement Costs, refers to the cost of equipment and installations procured during the operating phase of the project, to maintain its original productive capacity.