# The Environmental Authorisations (Scotland) Regulations 2018, Paragraph 7: Cost-benefit analysis: principles


SEPA must ensure that a cost-benefit analysis under this schedule is conducted in accordance with the following principles—
(a) where an electricity-only installation or plant, or an installation or plant without heat recovery is planned, a comparison must be made between the planned installations or plants, or the planned refurbishment and an equivalent installation or plant producing the same amount of electricity or process heat but recovering the waste heat and supplying heat through high-efficiency cogeneration and/or district heating and cooling networks,
(b) within a given geographical boundary the assessment must take into account the planned installation or plant and any appropriate existing or potential heat demand points that could be supplied from it, taking into account rational possibilities (for example, technical feasibility and distance),
(c) the system boundary set must include the planned installation or plant and the heat loads, such as building(s) and industrial process, within this system boundary the total cost of providing heat and power must be determined for both cases and compared,
(d) heat loads must include existing heat loads, such as an existing installation or plant, or an existing district heating system, and also, in urban areas, the heat load and costs that would exist if a group of buildings or part of a city were provided with and/or connected into a new district heating network,
(e) the cost-benefit analysis must be based on a description of the planned installation or plant and the comparison installation(s) or plants, covering electrical and thermal capacity, as applicable, fuel type, planned usage and the number of planned operating hours annually, location and electricity and thermal demand,
(f) for the purpose of the comparison, the thermal energy demand and the types of heating and cooling used by the nearby heat demand points must be taken into account, the comparison must cover infrastructure related costs for the planned and comparison installation or plant,
(g) cost-benefit analyses must include an economic analysis covering a financial analysis reflecting actual cash flow transactions from investing in and operating individual installations or plants,
(h) projects with positive cost-benefit outcome are those where the sum of discounted benefits in the economic and financial analysis exceeds the sum of discounted costs (cost-benefit surplus),
(i) SEPA must set guiding principles for the methodology, assumptions and time horizon for the economic analysis.

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Source: https://www.legislation.gov.uk/ssi/2018/219/schedule/25/paragraph/7 (the official version)
Page: https://openlegislation.uk/environmental-authorisations-scotland-regulations-2018/schedule-25/paragraph-7
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.