This document summarizes an energy efficiency initiative by Qantas Airlines to reduce electricity consumption through increased use of renewable energy and initiatives like installing windows for natural light and solar shading devices. It analyzes the current electricity consumption and costs, the potential savings from various initiatives, and calculates the net present value of the project over 5 years to be $213,219.67. It recommends accepting the project because it has a positive NPV, will reduce carbon emissions and enhance environmental sustainability and the organization's long-term profitability.

1. Energy Efficiency Initiative by Qantas Airlines
Cost Management and Analysis
By
www.myassignmenthelp.net

2. Introduction
• The electrical energy efficiency project
for Qantas Airlines.
• The project is about conserving the
electricity by making more use of
renewable energy which is sunlight.
• Reduces Carbon emissions

3. Steps to Analysis
• The electricity energy consumed by offices
and properties of airlines
• Initiatives that can be taken to reduce the
energy consumption
• Cost of taking the initiatives (initial
investment)
• Energy savings from the project over the
period of time using the EBIT and (NPV of the
project).

4. Electrical Energy consumption
• Energy consumption in lightning is calculated
as follows:
Lighting benchmarks
Lighting benchmarks
Installed Power density (W/m square) 20
Hours of use of the lightning (Hours / year) 3200
Percentage utilization * 85%
KWH/m square/yr 54

5. • Energy consumption for the fan and Air
conditions has the following benchmarks:
Air Handling benchmarks
Amount of air Handled (liters/ second per meter square
(l/m square) 4
Specific fan Power (SFP) in watts per liter/second (w
per l/s) 3
Annual hours run 3500
Fan KWH/m square/yr 42
FPC KWH/m square/yr 60

6. • Total Consumption of electricity per year:
Total consumption of electricity
Area in m etres square 3000
Lighting consumtion (KWH/m
square/yr) 54
Air handling (KWH/m
square/yr) 102
Total KWH per year 468000
Average Cost per unit of Electricity in NSW $0.30
per
KWH
Total cost of electricity $140,400.00

7. Cost of Project
• a. Initiatives and practices:
Total savings of electricity
Area in meters square 3000
Lighting saving (KWH/m square/yr) 27
Air handling saving (KWH/m square/yr) 30
Total KWH per year 171000

8. • b. Construct windows for free natural
light entrance:
Savings in 25% of the lightning
requirements
• C. Using solar shading devices:
Savings in 15% of the cooling
requirements
Total savings of electricity units per year
238500 KWH
Cost of electricity saved $71,550.00

9. NPV of the Project
Year
0 1 2 3 4 5
cash Flows:
Initial cost
(investment) ($67,450)
Savings in
electricity
(EBIT) $71,550.00 $78,705.00 $86,575.50 $95,233.05 $104,756.36
Depreciation $13,490 $13,490 $13,490 $13,490 $13,490
Total cost
savings $85,040.00 $92,195.00 $100,065.50 $108,723.05 $118,246.36
Tax on savings
@30% $25,512.00 $27,658.50 $30,019.65 $32,616.92 $35,473.91
Savings after
tax $59,528.00 $64,536.50 $70,045.85 $76,106.14 $82,772.45
Net cash flows ($67,450) $59,528.00 $64,536.50 $70,045.85 $76,106.14 $82,772.45
NPV @7.7% $213,219.67

10. Recommendation
The Project must be accepted because:
• NPV is More than zero.
• Reduces carbon emission and green house
effect
• Enhances sustainability of environment and
hence the profitability and sustainability of
the organization.