BUSINESS CASE MODELLING OF ENERGY EFFICIENT PROJECTS

PROJECT DESCRIPTION DOCUMENT FOR A THESIS TO BE SUBMITTED AT THE UNIVERSITY OF LEICESTER IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF BSC FINANCIAL MATHEMATICS

ABDULLAHI WADA MAIDA DEPARTMENT OF MATHEMATICS UNIVERSITY OF LEICESTER MAY 2012

Table of Contents

ABSTRACT .......................................................................................................................................... II

STATEMENT ON PLAGIARISM .................................................................................................. III

ACKNOWLEDGEMENTS .............................................................................................................. IV

INTRODUCTION ............................................................................................................................... 1

PROJECT BACKGROUND........................................................................................................... 1

PROJECT OBJECTIVES ............................................................................................................... 1

OVERVIEW OF DISSERTATION ............................................................................................. 1

DEVELOPMENT OF TOOL ............................................................................................................. 2

PRE-DEVELOPMENT OF TOOL (INITIAL STAGE OF PROJECT) ................................ 2

KEY MODEL INPUTS AND OUTPUTS .............................................................................. 2

DESCRIPTION OF INPUTS AND OUTPUTS ................................................................... 3

FUNCTIONS WITHIN MODEL ............................................................................................ 4

CURRENCY CONVERTER ..................................................................................................... 6

DEVELOPMENT OF TOOL ........................................................................................................ 7

DEVELOPMENT ON THE WORKSHEET ......................................................................... 7

DEVELOPMENT USING VBA ............................................................................................ 10

TOOL DEMO................................................................................................................................ 21

CONCLUSION .................................................................................................................................. 25

ANALYSIS OF TOOL ................................................................................................................. 25

RECOMMENDATIONS FOR FUTURE DEVELOPMENT ............................................... 26

REFERENCES .................................................................................................................................. 26

APPENDIX – LISTS ........................................................................................................................ 27

TABLES ......................................................................................................................................... 27

CELL REFERENCES .................................................................................................................. 27

EXCHANGE RATES .............................................................................................................. 29

MACROS ....................................................................................................................................... 31

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ABSTRACT Vichag Clean Energy Solutions required a Microsoft Excel based business case modeling tool that can generate both an initial business case, and a detailed business case of the Energy Efficiency solutions they offer. This dissertation focuses on the development of this required tool and also details the use of the developed tool. Excel used alongside the Visual Basic Application that comes with it was used for the development of the required tool. At the conclusion of the project, the required business case modeling tool was produced, along with a report detailing the use of the tool. This tool will enhance Vichag’s customer’s experiences and also save both time and labor involved in customer interactions. Due to the maintainability the tool possesses and flexibility in development using Excel, the tool’s uses could be further extended beyond what was required by Vichag for the project. Vichag also received a series of recommendations for the next stages of development of the tool which are:

- The inclusion of capital budgeting instruments in the tool. - The inclusion of an error estimating function in the tool. - The inclusion of a carbon footprint calculator in the tool. - The inclusion of codes in the model’s program that restrict the sort of data

the user is allowed to enter when using the tool.

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STATEMENT ON PLAGIARISM All sentences or passages quoted in this project dissertation from other people’s work have been specifically acknowledged by clear cross referencing to author, work and page(s). I understand that failure to do this amounts to plagiarism and will be considered grounds for failure in this module and the degree examination as a whole. Name: Signed: Date:

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ACKNOWLEDGEMENTS I would like to thank Alexander Baranov of the Department of Mathematics at the University of Leicester for his help in the programming aspect of the project. I would like to express my gratitude to Nikolai Brilliantov, my project supervisor, for helping me organize myself throughout the duration of the project, and for the knowledge and wisdom he passed on to me, which will undoubtedly be useful to me in my future career. I would also like to thank Jeremy Levesley, the Department of Mathematics at the University of Leicester, and Vichag Clean Energy Solutions for providing me with the opportunity to be a part of such a unique project, from which I have gained valuable experience.

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INTRODUCTION

PROJECT BACKGROUND Vichag Clean Energy Solutions, a startup based in Leicester, provide energy efficiency and clean energy solutions to both the private and the public sector. The company required a business case modeling tool which could generate both an initial business case, and a detailed business case. Vichag would then use the derived business case for customer proposals, enabling the customer to review the financial implications of the project. Vichag also intend to use the derived business case when engaging a finance company to provide project financing if the customer wishes. Vichag staff would use this Microsoft Excel based tool whenever they were consulting potential customers. It was decided that a business case model should be developed on Excel for the “Boiler Fuel Switch” (also known as “Bio-Switch”) service offered by them amongst others. Vichag emphasized that this tool has an adaptable structure so that after the conclusion of the project their staff could easily further develop the tool as they wished.

PROJECT OBJECTIVES

The production of a business case modeling tool in Excel. A report detailing the use of the Business Case Modeling Tool (a user

manual for the tool). A presentation to key members of staff of Vichag, regarding the tools

definition and use. A series of recommendations for the next stages of development for the

Tool.

OVERVIEW OF DISSERTATION This dissertation will:

- Elaborate on the production of the Business case model in Excel. - Show a demonstration of the produced tool and how it is used in practice. - Give an analysis of the produced tool. - Detail limitations in results and give a series of recommendation for the

next stages of development of the tool.

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DEVELOPMENT OF TOOL

PRE-DEVELOPMENT OF TOOL (INITIAL STAGE OF PROJECT) On initiation of the project, it was necessary to learn about the energy efficiency services offered by Vichag, paying particular attention to the financial aspects of these services. This was required in order to fully comprehend what Vichag require this tool to do (i.e. the software’s user requirements), thus also comprehending the main problem stated in the project. After this it was possible to construct black box models for the finances of some of these services, as a result of which the aforementioned problem became properly articulated. The model’s key requirements are:

- The ability to generate a business case containing customer’s estimated price quote for their chosen service, potential annual savings after service has been carried out, payback period for their chosen service and installation time (if the service being offered involves the installation of a system).

- Ability to model different business parameters. - Possession of an adaptable structure.

KEY MODEL INPUTS AND OUTPUTS The Bio-switch service, which was selected to have a financial model in the tool developed for it first, is a service which involves the installation of a new biomass boiler system for a customer. This new boiler replaces whatever type of boiler the customer previously used. Vichag handle everything involved in the installation, and also approach finance companies to provide financing for the project if the customer wishes. The customer also has a choice of options that can be included in the service. These options are a fuel supply contract, maintenance contract and cyclone scrubber for the new boiler. Here is a diagram showing the key inputs and outputs of the model.

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DESCRIPTION OF INPUTS AND OUTPUTS

Annual boiler fuel spend: amount of money the customer spends annually on fuel for their current boiler.

Required boiler steam output: maximum boiler steam output (boiler capacity) required by customer.

Country where system to be installed: the country where the customer

wants the system to be installed.

Boiler usage: the average amount of time the customer uses the boiler for in a year.

Options: any additional service or package, which the customer selects.

Manufacturer type: the manufacturer to be used for that particular project, chosen by Vichag.

System cost markup: the markup percentage on the system cost, decided by Vichag.

Vichag service cost markup: the markup percentage on Vichag’s service cost, decided by Vichag.

BIO-SWITCH FINANCIAL MODEL

Inputs from customer - Annual boiler fuel

spend. - Required boiler

steam output. - Country where

system to be installed.

- Boiler usage. - Options

Inputs from Vichag - Manufacturer type. - System cost

markup. - Vichag service cost

markup.

Outputs - Project cost for

Vichag. - Project cost for

customer. - Customer’s

potential annual savings.

- Payback period for customer.

- Installation time.

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Project cost for Vichag: how much the project will cost the customer / Price quote for the customer.

Project cost for customer: how much the customer will have to pay for their desired project.

Customer’s potential annual savings: the annual savings the customer

could make on fuel cost if they go ahead with the project.

Payback period: the amount of time it takes for the project’s potential savings to cover the project’s cost for the customer.

Installation time: the time it takes for the system to be installed and

operational.

FUNCTIONS WITHIN MODEL First of all let us introduce and define some variables which are also involved in the operations of the model:

- System cost: this is the cost of the biomass system to be installed. It depends on required boiler steam output and Manufacturer type.

- Vichag Service cost: this is the fee charged by Vichag for their service. It depends on Required boiler steam output.

- Available biomass: the biomass fuel that is available in customer’s

location. It depends on Country where system to be installed.

- Energy required for steam output: the amount of energy required by the boiler to produce the required steam.

- Cyclone scrubber option: if selected by customer, a cyclone scrubber (a

device that removes pollutants and other unwanted particles from gas streams) is included in the biomass system being installed. Its price depends on Required boiler steam output and Manufacturer type.

- Maintenance contract option: if selected by customer, Vichag will

perform regular maintenance checks on the system which they installed for the customer for a year. It has a fixed cost.

- Fuel supply contract option: if selected by customer, Vichag will supply

the biomass fuel required by the customer for a year.

- Weekday and Weekend boiler usage: the number of hours in a weekday/weekend the customer uses the boiler for.

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- Annual boiler usage: the number of weeks in a year in which the customer uses the boiler.

Before we move forward, here is a table showing some important measurement units used in this model: Item/Variable Measurement Unit

Required boiler steam output Calorific value of available biomass

Ton/hour Gigajoule/Ton

Energy required for output Gigajoule

Weekday/Weekend boiler usage Annual boiler usage

Hours/Day Weeks/year

Now here are the functions within the model: Project cost for Vichag = 𝑆𝑦𝑠𝑡𝑒𝑚 𝑐𝑜𝑠𝑡 + 𝑐𝑜𝑠𝑡 𝑜𝑓 𝑠𝑒𝑙𝑒𝑐𝑡𝑒𝑑 𝑜𝑝𝑡𝑖𝑜𝑛𝑠 Project cost for customer = 𝑆𝑦𝑠𝑡𝑒𝑚 𝑐𝑜𝑠𝑡 + 𝑐𝑜𝑠𝑡 𝑜𝑓 𝑠𝑒𝑙𝑒𝑐𝑡𝑒𝑑 𝑜𝑝𝑡𝑖𝑜𝑛𝑠 + 𝑉𝑖𝑐𝑕𝑎𝑔 𝑠𝑒𝑟𝑣𝑖𝑐𝑒 𝑐𝑜𝑠𝑡 + 𝑆𝑦𝑠𝑡𝑒𝑚 𝑐𝑜𝑠𝑡 𝑚𝑎𝑟𝑘𝑢𝑝 𝑎𝑚𝑜𝑢𝑛𝑡 + 𝑉𝑖𝑐𝑕𝑎𝑔 𝑠𝑒𝑟𝑣𝑖𝑐𝑒 𝑐𝑜𝑠𝑡 𝑚𝑎𝑟𝑘𝑢𝑝 𝑎𝑚𝑜𝑢𝑛𝑡 Installation time: This is determined according to the size of system being installed, which in turn depends on Required boiler steam output. Customer’s potential annual savings: There are a few steps involved in obtaining this output. Step 1: Division of Energy required for output by Calorific value of available biomass to obtain Amount of available biomass needed per hour to generate required steam.

𝐵𝑖𝑜𝑚𝑎𝑠𝑠 𝑛𝑒𝑒𝑑𝑒𝑑 𝑝𝑒𝑟 𝑕𝑜𝑢𝑟 =𝐸𝑛𝑒𝑟𝑔𝑦 𝑟𝑒𝑞𝑢𝑖𝑟𝑒𝑑 𝑓𝑜𝑟 𝑜𝑢𝑡𝑝𝑢𝑡

𝐶𝑎𝑙𝑜𝑟𝑖𝑓𝑖𝑐 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝑏𝑖𝑜𝑚𝑎𝑠𝑠

Step 2: Estimation of amount of biomass needed annually. This calculation involves the weekday, weekend and annual boiler usage. 𝐴𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑏𝑖𝑜𝑚𝑎𝑠𝑠 𝑛𝑒𝑒𝑑𝑒𝑑 𝑎𝑛𝑛𝑢𝑎𝑙𝑙𝑦

= 𝐴𝑛𝑛𝑢𝑎𝑙 𝑏𝑜𝑖𝑙𝑒𝑟 𝑢𝑠𝑎𝑔𝑒 × 𝐵𝑖𝑜𝑚𝑎𝑠𝑠 𝑛𝑒𝑒𝑑𝑒𝑑 𝑝𝑒𝑟 𝑕𝑜𝑢𝑟

× 5 × 𝑊𝑒𝑒𝑘𝑑𝑎𝑦 𝑏𝑜𝑖𝑙𝑒𝑟 𝑢𝑠𝑎𝑔𝑒 + 2 × 𝑊𝑒𝑒𝑘𝑒𝑛𝑑 𝑏𝑜𝑖𝑙𝑒𝑟 𝑈𝑠𝑎𝑔𝑒

Step 3: Estimation of Annual biomass cost.

𝐴𝑛𝑛𝑢𝑎𝑙 𝑏𝑖𝑜𝑚𝑎𝑠𝑠 𝑐𝑜𝑠𝑡= 𝐴𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑏𝑖𝑜𝑚𝑎𝑠𝑠 𝑛𝑒𝑒𝑑𝑒𝑑 𝑎𝑛𝑛𝑢𝑎𝑙𝑙𝑦× 𝐶𝑜𝑠𝑡 𝑝𝑒𝑟 𝑇𝑜𝑛 𝑜𝑓 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝑏𝑖𝑜𝑚𝑎𝑠𝑠

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Step 4: This is the final step. The Customer’s potential annual savings is now simply derived by subtracting Annual biomass cost from Current annual boiler fuel cost. 𝑆𝑎𝑣𝑖𝑛𝑔𝑠 = 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑛𝑛𝑢𝑎𝑙 𝑏𝑜𝑖𝑙𝑒𝑟 𝑓𝑢𝑒𝑙 𝑠𝑝𝑒𝑛𝑑 − 𝐴𝑛𝑛𝑢𝑎𝑙 𝑏𝑖𝑜𝑚𝑎𝑠𝑠 𝑐𝑜𝑠𝑡 Payback Period for customer: This is calculated by dividing the Project cost for customer by Customer’s potential annual savings.

𝑃𝑎𝑦𝑏𝑎𝑐𝑘 𝑝𝑒𝑟𝑖𝑜𝑑 =𝑃𝑟𝑜𝑗𝑒𝑐𝑡 𝑐𝑜𝑠𝑡 𝑓𝑜𝑟 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟

𝑆𝑎𝑣𝑖𝑛𝑔𝑠

CURRENCY CONVERTER As Vichag also deal with customers outside the U.K., a simple currency converter was included in the model. The model uses exchange rates downloaded from the exchange rate website x-rates.com [3]. All calculations involving money within the model are done in GBP, so if the customer provides required data in some other currency, the converter converts that currency into GBP and carries on with its operations. After calculations are done the converter then converts the output back to the customer’s currency.

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DEVELOPMENT OF TOOL Microsoft Excel was suitable for the development of this tool because of its calculation abilities, its ability to organize data manipulations using in-built functions, and last but not least, its programming aspect called Visual Basic for Applications (VBA). Employing VBA enables personalized spreadsheet manipulations which are not possible with standard Excel spreadsheet techniques, and it also enables the automation of processes and tasks. The development can be divided into two parts: Development on the worksheet and Development using VBA. The tool itself is a single file (Excel Workbook).

DEVELOPMENT ON THE WORKSHEET For the Bio-switch financial model, lookup tables were necessary. A database containing all the relevant tables was thus created in Excel. This database was made up of a single worksheet, and it was in there that the input data required by the model was deposited and used in calculations to obtain the model’s required outputs. The workbook also contains a sheet named “Exchange rates”, a sheet named “Home”, and another sheet named “Quote”. The Home sheet contains buttons for bringing up certain dialog boxes. The Quote sheet contains all the output data that is to be presented to the customer. The Exchange rates sheet contains currency exchange rates downloaded from x-rates.com, with an additional row for ‘British Pound’ inserted.

Figure 1: Part of the Home sheet showing buttons.

N.B.: ALL NUMERICAL VALUES IN TABLES WITHIN THE DATABASE OF THIS MODEL ARE MADE UP. Here are some more screenshots of parts of the Bio-switch model database:

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Figure 2: These are some of the tables in the database.

Figure 3: This part of the database is where the input data from the user are deposited. As you can see each cell has a comment, and each cell’s comment simply states what input data is in the cell.

Figure 4: This part of the database is where all of the numerical calculations within the model take place. As can be seen each cell has a comment, and the comment gives a detailed description of the cell content.

The built in Excel functions “LOOKUP” and “VLOOKUP” were used, as their names imply, to look up and return required values from the various tables. These returned values are then in turn used in the calculations within the model. The formulas outlined earlier in the document were employed in Excel using cell references and arithmetic operations. Below is one of the operations which use the LOOKUP function:

Figure 5: Formula in Excel

Figure 6: Output with description

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It is the project cost for Vichag which is being calculated. The System cost is determined using the Lookup function. Cell “F1” contains the numerical value of Required steam output, which is an input from the customer. The range of cells “A5:A14” is the “lookup_range”, which in this case is the table of values for Required steam output. The range of cells “B5:B14” is the “result_range”, which in this case is the table of values for System cost. The Lookup function searches for the value in the lookup_range and returns the value from the same position in the result_range. Cells “C20”,”C21” and ”C22” contain the values for costs of the three different options, and they are added to the derived system cost to compute Vichag’s project cost. Here is an operation that uses the VLOOKUP function:

Figure 7: Formula in Excel

Figure 8: Output with description

For this example it is the Annual biomass cost for customer being calculated. Recall that amount of biomass customer needs is calculated previously .The cost of customer’s local available biomass is determined using the “VLOOKUP” function. Cell “D1” contains the required input, customer’s country (Country where system is to be installed). The range “J5:M9” is known as the “table_array”, and in this case it consists of various tables including one for Biomass cost/ton. The number “3” in the formula is called the “index_number”, and it is the column number in table_array from which the matching value must be returned. In this case the Vlookup function returns a matching value from the biomass Cost/ton column. This value is then multiplied by amount of biomass customer needs annually (contained in cell “E25”) to give annual biomass cost for customer. The functions Lookup and VLookup work in an almost identical manner. In this model Lookup is used when numerical values are to be looked up, while VLookup is used when words are to be looked up.

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DEVELOPMENT USING VBA The model’s operations occur in the worksheet, and as mentioned earlier some input data from the user is required. A dialog box was thus needed to enable the user provide this information. This is where VBA comes into play, as it has the ability to create custom dialog boxes known as UserForms. Userforms can be used for displaying as well as inputting data. You could even build an entire user interface using userforms, and never let the user touch the spreadsheet itself, making data entry more controllable for you and easier for the user [1]. It was also necessary for macros to be written (using VBA) in order to automate certain tasks in the model. A macro is a set of instructions that can be triggered by a keyboard shortcut, toolbar button or an icon in a spreadsheet. Macros are used to eliminate the need to repeat the steps of common tasks over and over [2]. Here are the userforms that were created for the model along with the codes that make them work. N.B.: RECALL THAT ONLY THE BIO-SWITCH FINANCIAL MODEL WAS DEVELOPED.

Figure 9: presets

The presets dialog box takes inputs from Vichag staff only, it is not meant to be seen by the customer hence why it is not in the sequence with the other dialog boxes. It can only be accessed from the Home sheet. As its name implies, it is meant to be used before consultation with the customer.

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On clicking the ‘Update’ button the macro cost_table is run. System costs depend on Manufacturer type as well, so the macro ensures that whichever manufacturer is selected the values used by the model are that manufacturer’s prices. The macro and its description are as follows:

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Figure 10: Start

This is the first dialog box that appears upon launching the tool. The user of the tool can either select the service required by the customer and continue, or click the “Edit model/Presets” button to go to the Home page of the workbook, from which the rest of the workbook can be accessed. The codes behind this userform’s operation are as follows.

On clicking the continue button after selecting a service, the tool will label the Quote sheet with the name of the service selected, and also load the next dialog box.

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Figure 11: quote_type

The user can either select Initial quote or Detailed quote, depending on what stage of consultation they are in with the customer. There is also the option of going back to the Start userform. Here are the codes that make the dialog box work:

As you can see from the above code, when the Initial quote button is clicked the macro start_clr is run. Here is the macro with its code and description:

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Figure 12: bioswitch_in

This is an important dialog box for the bio-switch model. Almost all the input data required by the tool is collected by this dialog box. It also has a “Back To Start” button that takes the user back to the Start userform when clicked. The codes that enable this dialog box to work are as follows:

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Two macros, options and generatequote, are run when the “Generate Quote” button is clicked. options is a macro which calls two other macros, namely cyclone_price and contracts. The following are the codes and descriptions of these macros:

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Figure 13: currency_form

After the Generate Quote button on the previous dialog box is clicked, the above dialog box comes up asking the customer if they want the quote being generated to contain equivalent values in the customer’s selected currency. Obviously if British Pound is selected currency the user will click No. The codes that make it work are as follows:

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If the user clicks “Yes”, the macros local_currency and publishtopdf are run respectively. If “No” is clicked the macros clear_currency and publishtopdf are run respectively. Here are the descriptions of these macros:

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Regardless of what button is clicked, the generated quote is displayed as a PDF file, due to the fact both buttons run the macro publishtopdf. local_currency ensures that if the customer selects currency other than GBP, their quote will also contain values in this selected currency if they wish. clear_currency on the other hand ensures that the quote contains values in GBP only.

Figure 14: finish

This final dialog box appears after the generated quote is displayed, and the user has the option of closing the tool, going to the Start userform and using the tool from the beginning, or going to the worksheet. The codes that make this dialog box function are as follows:

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Last but not least is the following macro which is run as soon as the worksheet containing the tool is opened. It enables the tool to run without the workbook in the background, thus giving the tool a professional application look. Without it, when the tool is being used the worksheet appears in the background, and that is not easy on the eye.

The operations within the model use exact cell references, so everything has to be in its place, thus why all relevant cells have been labeled. At the end of this document is an appendix containing the address of all relevant cells and their respective contents.

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TOOL DEMO Here is a step by step demonstration of the tool in use. The presets have been put in so the presets dialog box will not appear in this demo. To launch the tool, one simply has to open the Excel worksheet containing the tool. Note that macros must be enabled for the tool to work. Upon opening the file containing the tool, the first dialog box appears:

Bio-switch is selected and the Continue button is clicked. The next dialog box appears.

Initial quote is clicked. The next dialog box appears.

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The user of the tool puts in all the required data as shown above, and also ticks the checkbox of any required option. After all the required data is put in the user can click the Generate Quote button.

The customer has the choice for their quote to contain values in GBP and their local currency, or GBP alone. For this demo we click Yes to continue.

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The user now chooses the location where they wish to save the generated sales quote.

Voila! We have generated a quote for the customer. Using the Adobe reader’s facilities the user can perform whatever task the customer requires such as printing the quote. Once the page is closed or minimized, the final dialog box will be there waiting for the next instruction.

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The user can now decide what to do from the available buttons in the picture above. And that’s it; a business case document has been generated for the customer. Notice that no Excel worksheet appears in the background.

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CONCLUSION

ANALYSIS OF TOOL Before the development of this tool, Vichag had nothing similar that could generate a business case document for customer proposals. With this tool, Vichag will save both time and labor involved in customer interactions, in the process also positively enhancing customer experience. This should improve their business. Flexibility in the development of this tool using Microsoft Excel means its uses can be extended further than what was required by Vichag for this project. As mentioned a few times already in this document, Vichag placed emphasis on the tool having an adaptable structure (that is they want it to have good maintainability). The maintainability of the tool was ensured throughout the tool’s development. The source code in the programming aspect of the tool is of good readability due to its neat and consistent indentation style, explanatory comments and overall organization. The macros contained in the tool have all been put in specific modules so that they could be easily located. Each macro is located in a module named after the Userform which calls that macro. All items and objects created using VBA have been named . On the workbook, each sheet has been labeled, all the tables contained within the sheets have clear headers, and all relevant cells have comments associated with them detailing their content. Due to the timescale of the project, only the initial business case of the Bio-switch model could be developed for the tool. The models of the other services offered by Vichag are slightly similar to the Bio-switch, especially in terms of the required output; therefore the Bio-switch model could serve to an extent as a template for the production of models for the other Vichag services.

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RECOMMENDATIONS FOR FUTURE DEVELOPMENT Here are some recommendations for the next stages of development of the tool:

- Although the tool’s main purpose is to generate a business case for customer proposals, it could be even more useful for Vichag if it could provide information for their capital budgeting. With the inclusion of certain parameters in the tool, information such as Net present Value and Internal Rate of Return could be provided to Vichag.

- For the initial business case, the values returned by the tool are estimates. As they are estimates then obviously their accuracy could vary. It is therefore recommended that an error estimating function should be added to the tool. Knowing the accuracy of a quote could help Vichag in a variety of ways.

- As Vichag specialize in energy efficiency, it would be a good incentive if

the customer knew how much they were reducing their carbon footprint by as well. It is therefore recommended they include a function in the tool which calculates carbon footprint reductions.

- It is recommended that Vichag write new codes using VBA that restrict

the type of data the user is allowed to enter when using the tool, and also ensure data entered in do not exceeded for inputs which are limited (for example for ‘Annual boiler usage’ the user cannot enter a value larger than 52)

REFERENCES LISTED REFERENCE CITATION IN TEXT http://www.thecodenet.com/articles.php?id=7 [1] http://spreadsheets.about.com/od/m/g/macro_def.htm [2] http://www.x-rates.com/d/GBP/table.html [3]

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APPENDIX – 1

TABLES As mentioned earlier in this document, all numerical values contained within the tables in the Bio-switch model are made-up. This was so the tool could be tested and for demonstration purposes as well. Here are all the tables within the model but without any values.

CELL REFERENCES As mentioned earlier in this document (refer to…) the tool works using exact cell references. Here is a list of all the relevant cells in the tool: SHEET CELL REFERENCE CONTENT Bio-switch Initial A1 Manufacturer type Bio-switch Initial B1 System Cost Markup Bio-switch Initial D1 Customer’s Country Bio-switch Initial E1 Customer's annual boiler

fuel cost in their selected currency.

Bio-switch Initial F1 Required boiler capacity Bio-switch Initial G1 Weekday boiler usage Bio-switch Initial H1 Weekend boiler usage Bio-switch Initial J1 Annual boiler usage Bio-switch Initial K1 Cyclone scrubber

checkbox Bio-switch Initial L1 Maintenance contract

checkbox Bio-switch Initial M1 Fuel supply contract

checkbox Bio-switch Initial B2 Vichag service cost

markup Bio-switch Initial A5:A14 Required steam output

values Bio-switch Initial B5:B14 Cost of system values Bio-switch Initial C5:C14 Installation time values

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Bio-switch Initial

D5:D14

Required energy for output values

Bio-switch Initial E5:E14 Cyclone scrubber cost values

Bio-switch Initial F5:F14 Vichag service cost values

Bio-switch Initial J5:J9 List of countries Bio-switch Initial K5:K9 List of biomass available Bio-switch Initial L5:L9 Biomass cost/ton values Bio-switch Initial M5:M9 Calorific values of

biomass available Bio-switch Initial C18 Maintenance contract

cost Bio-switch Initial C20 Maintenance contract

cost (for calculation) Bio-switch Initial C21 Fuel supply contract cost

(for calculation) Bio-switch Initial C22 Cyclone scrubber cost

(for calculation) Bio-switch Initial E18 Vichag’s project cost Bio-switch Initial E19 Customer’s project cost Bio-switch Initial E20 Installation time Bio-switch Initial E21 Biomass available in

customer’s location Bio-switch Initial E22 Required energy for

steam output Bio-switch Initial E23 Calorific value of biomass

available at customer’s location

Bio-switch Initial E24 Amount of biomass needed per hour

Bio-switch Initial E25 Amount of biomass needed annually

Bio-switch Initial E26 Annual biomass cost for customer

Bio-switch Initial E27 Fuel supply contract cost Bio-switch Initial E28 Customer’s potential

annual savings Bio-switch Initial E29 Payback period for

customer Bio-switch Initial E31 Customer’s annual boiler

fuel cost in GBP Bio-switch Initial E32 Customer’s cost of

project in their selected currency

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Bio-switch Initial E33 Customer’s potential savings in their potential currency

Bio-switch Initial S5:S14 Type A system costs Bio-switch Initial T5:T14 Type B system costs Bio-switch Initial U5:U14 Type C system costs Bio-switch Initial S17:S26 Type A cyclone scrubber

costs Bio-switch Initial T17:T26 Type B cyclone scrubber

costs Bio-switch Initial U17:U26 Type C cyclone scrubber

costs Quote B3 Customer’s project cost Quote B5 Customer’s potential

annual savings Quote B7 Payback period for

customer Quote B9 Installation time Quote D3 Customer’s project cost

in their selected currency Quote D5 Customer’s potential

annual savings in their selected currency

Quote E3 Customer’s selected currency

Quote E5 Customer’s selected currency

EXCHANGE RATES Exchange rates are downloaded from x-rates.com and can either be pasted into the Exchange Rates sheet when downloaded, or downloaded directly onto the sheet. The currency conversion operations in the model require exact cell references as well, therefore the downloaded exchange rates must be placed appropriately in the Exchange rates sheet.

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As can be seen from the screenshot, the exchange rates to convert from GBP to other currencies are in range B4:B44, while the exchange rates to convert from other countries to GBP are in range C4:C44. Also notice that British pound is in row 8 (i.e. range A8:C8). This was inserted into the table of exchange rates after the rates were downloaded. This is done so that when the customer selects British pound as the currency they want to provide data in, the model can operate in exactly the same manner as when other currencies are chosen. THEREFORE ANYTIME EXCHANGE RATES ARE DOWNLOADED, THEY MUST BE PASTED WITH EXACTLY THE SAME CELL REFERERENCES MENTIONED ABOVE, AND A NEW ROW OF CELLS MUST BE INSERTED FOR BRITISH POUND IN THE SAME POSITION MENTIONED ABOVE.

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MACROS Here is a list of all the macros in the tool and the modules where are they are located: Macro Location options bioswitch_in_macros generatequote bioswitch_in_macros contracts bioswitch_in_macros cyclone_price bioswitch_in_macros local_currency currency_form_macros clear_currency currency_form_macros publishtopdf currency_form_macros start_form homebuttons_macros presets_form homebuttons_macros cost_table preset_macros start_clr quote_type_macros gotomodel start_macros The macro Workbook_Open is located in the Microsoft Excel Object ThisWorkbook

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