Risk Identification in Cogeneration (Combined Heat and Power) Projects: A Polish Case Study

Joanna Rzempała, Daniel Borkowski and Artur Piotr Rzempała
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Joanna Rzempała: Institute of Management, Faculty of Economics, Finance and Management, University of Szczecin, 22A Aleja Papieża Jana Pawła II Str., 70-453 Szczecin, Poland
Daniel Borkowski: Legal Partner, 18/5 Nowogrodzka Str., 00-511 Warsaw, Poland
Artur Piotr Rzempała: Faculty of Economics and Transport Engineering, Maritime University of Szczecin, 1-2 Wały Chrobrego Str., 70-500 Szczecin, Poland

Energies, 2021, vol. 15, issue 1, 1-16

Abstract: The purpose of the article is to define the risk factors in cogeneration projects and to demonstrate that a lack of sufficient identification of risks in different phases affects project implementation. A theoretical study is conducted, which aims to identify risk factors in cogeneration projects, based on case studies of such projects in Poland. The study offers a view at CHP (combined heat and power) projects as extremely dependent on the external environment of the organisation. These projects are subject to many external regulations due to their environmental impact and dynamically changing technical aspects. The biggest technical errors occur at the planning and construction stages. The biggest economic and financial risks occur at the execution stage after 2% and 3% of additional design costs occur, respectively. The authors estimated the risks at different stages of the project and concluded that the total cost of failure in correct identification of the risks at the planning stage exceeded PLN 1.5 billion, which amounted to almost 60% of the total additional costs of materialised project risk. Consequently, the biggest challenges in the area of CHP project management at the planning stage are a thorough identification of risks, and the pricing and planning reactions to risk.

Keywords: project management; management project risk; cogeneration projects; risk factors (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2021
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