Economic Evaluation of Simultaneous Production of Electricity and Heat in MASHAD City

The method of production and use of energy is one of the contributing factors to environmental pollution on national، regional and international scales. The US، the UK and Scandinavian countries have been using simultaneous production of electricity and heat and applying the district heating (DH) system as one means of optimizing energy use. This paper applies the net present value (NPV)، internal rate of return (IRR) and adjusted internal rate of return (MIRR) methods to asses the financial and economic viability of electricity and heat simultaneous production and applying the District Heating (DH) system in a region of MASHAD city. The study then moves on to evaluate the sensitivity of its results. The results show that this project is economically and financially feasible. In addition، the results of the sensitivity analysis show that the export price of natural gas is the most important factor influencing the economic parameters of the viability of the project.