Accommodating energy price volatility in life cycle cost analysis of asphalt pavements

Publisher's full text
Björn Birgisson

Energy price is related to more than half of the total life cycle cost of asphalt pavements. Furthermore, the fluctuation related to price of energy has been much higher than the general inflation and interest rate. This makes the energy price inflation an important variable that should be addressed when performing life cycle cost (LCC) studies regarding asphalt pavements.

The present value of future costs is highly sensitive to the selected discount rate. Therefore, the choice of the discount rate is the most critical element in LCC analysis during the life time of a project. The objective of the paper is to present a discount rate for asphalt pavement projects as a function of interest rate, general inflation and energy price inflation. The discount rate is defined based on the portion of the energy related costs during the life time of the pavement. Consequently, it can reflect the financial risks related to the energy price in asphalt pavement projects. It is suggested that a discount rate sensitivity analysis for asphalt pavements in Sweden should range between –20 and 30%.

MEET US


6
Oct

Open seminar with Mistra SAMS international scientific advisory...

Mistra SAMS international scientific advisory panel (ISAP) is visiting Stockholm, and the program will host an open seminar where the panel members will give talks in their area of expertise.
19-20
Oct

ERPUG 2017

The five year anniversary of  European Road Profile Users' Group (ERPUG) Forum will take place at Ramboll head quarter, Copenhagen, Denmark October 19-20, 2017. 

LATEST NEWS


2017-07-05

Vehicle Driver Monitoring: sleepiness and cognitive load

To prevent road crashes it is important to understand driver related contributing factors, which have been suggested to be the critical reason in 94 per cent of crashes. The overall aim of the project Vehicle Driver Monitoring has been to advance the...


2017-06-29

Tomas Svensson new director-general

Tomas Svensson was today appointed Director-General of VTI. Tomas has been acting Director-General since January 2017. 


2017-05-30

Crash testing bicycles at VTI

For the first time single bicycle crashes have been simulated at the VTI crash safety laboratory.


2017-05-15

A case study exploring firefighters’ and municipal officials’ preparedness for electrical vehicles

A VTI-study presents a social perspective on new vehicle technology. It explores the self-reported preparedness of the fire departments (i.e., rescue services) in Sweden’s three largest cities regarding rescue operations involving electrical vehicles (EVs).


2017-05-02

Pioneering research on and about bicycles at VTI

Under what circumstances might cyclists lose tyre grip? What actions could then be taken to prevent a crash? VTI is currently developing a theoretical model of the behaviour of bicycle tyres during braking and steering in different situations and on different...


2017-05-02

Virtual pedestrians create efficient stations

If more people are to choose sustainable travel, then the public transport stations of the future must be designed so that pedestrians can get where they are going quickly, without congestion or queues. The Swedish Road and Transport Research Institute (VTI)...