RENEWABLE ENERGY UTILIZATION FEASIBILITY FOR AGRICULTURAL COMPANY – GEORGIA CASE

Abstract

There is no doubt that fossil fuels are expensive energy resources. Their use also leads to the environmental problems. Although there is a tendency of increase in renewable energy capacity, its share in global final energy consumption is relatively low. This paper aims to increase awareness of renewable energy role in corporation value creation. The research studies the potential of the use of agricultural biomass residues available for the company and evaluates several investment projects using the example of Geoagro ltd, and assesses their impact on company’s value. The paper also studies the feasibility of use of alternative renewable energies such as biomass and solar energy for company needs and finally assesses the profitability of the two. Regarding the methodology, the paper uses the standard financial valuation techniques such as Net Present Value and Internal Rate of Return in order to compare alternative investment projects. The results showed that the direct sell of biomass – hazelnut shells creates the highest value. While comparing the profitability of using alternative energies, it was showed that the best option is to eliminate natural gas use and switch to biomass fuel.