Capital charges

Eig. 8. Cost of electricity (COE) comparison where represents capital charges, Hoperation and maintenance charges, and D fuel charges for the reference cycles. A, steam, light water reactor (LWR), uranium B, steam, conventional furnace, scmbber coal C, gas turbine combined cycle, semiclean hquid D, gas turbine, semiclean Hquid, and advanced cycles E, steam atmospheric fluidized bed, coal E, gas turbine (water-cooled) combined low heating value (LHV) gas G, open cycle MHD coal H, steam, pressurized fluidized bed, coal I, closed cycle helium gas turbine, atmospheric fluidized bed (AEB), coal J, metal vapor topping cycle, pressurized fluidized bed (PEB), coal K, gas turbine (water-cooled) combined, semiclean Hquid L, gas turbine... 

As can be seen from this analysis, the natural gas feedstock and capital charges amount to over 93% of the total production cost before return on investment. Therefore, energy consumption and capital investment are the key factors in determining ammonia production profitabiUty. 

In a modem operation the cost of production is made up of the factors shown in Table 3. The feedstocks account for more than 90% of the cost. Other operating costs, such as utihties, labor, and capital charges, make up the difference. 

The fixed capital estimate depends on the definition of the plant. A grass-roots plant is a complete faciUty at a new location, including all utihties, services, storage faciUties, land, and improvements. If a process plant is located at an existing processing complex, it can usually share some of these auxihary faciUties. A battery-limits plant is defined as the process faciUty itself, so that the auxiUaries, off-site, and land-related items are excluded from the fixed capital estimation. However, a battery-limits plant maybe assigned allocated capital charges for the share of common utihty and service faciUties used by the plant. 

Capital Costs A typical medium-scale RO seawater plant might produce 0.25 mVs (6 MGD). For a plant with an open sea intake, seawater salinity of 38 g/1, and conversion of 45 percent, the overall cost woiild be 26.5 miUiou (1996). A capital breakdown is given in Table 22-18. Capital charges are site specific, and are sensitive to the salinity of the feed. A plant of this size would likely contain six trains. For seawater RO, the Best estimate for the slopes of the family of lines in Fig. 22-55 is —0.6 for the equipment and 0.95 for the membranes. Capital charges, shown in TaBle 22-19, usually dominate the overall economics the numbers presented are only an example. Seawater economics are based on Shields and Moch, Am. Desalination Assn. Conf. Monterey CA (1996). 

While comparison of the absolute capital costs and costs of electricity among different power systems is difficult and uncertain, the structure of these costs is rather typical, and the costs of component units are usually within known ranges. For an oxygen-blown IGCC power system, the breakdown of the capital cost for the four component units is air separation plant (11 to 17 percent), fuel gas plant (33 to 42 percent), combined-cycle unit (32 to 39 percent), and balance of plant (2 to 21 percent). The breakdown of the cost of elec tricity is capital charge (52 to 56 percent), operating and maintenance (14 to 17 percent), and fuel (28 to 32 percent). 

The capital charge factor (/3) multiplied by the capital cost of the plant (Co) gives the cost of servicing the total capital required. Suppose the capital costs of a plant at the beginning of the first year is Co and the plant has a life of N years so an annual amount must be provided which is (Co/ + B). The first term (CoO is the simple interest payment and the second (B) matures into the capital repayment after N years (i.e. interest added to the accumulated sum at the end of each year), thus... 

Even if the power factor correction capacitance consumes no energy it will need capital investment, and therefore the consumer must balance the capital charges of this equipment against the savings which it produces in the energy bill. It is not normally economic to correct the power factor to its theoretically maximum value of unity, and a value of 0.9-0.95 is more usual. 

Although primary catalyst cost is not a major factor in the price of the product, the work of the catalyst chemist of course crucially affects a wide variety of process costs that are of far greater significance. What goes on in the reactor dictates feedstock requirements, capital charges, downtime for catalyst recharging, and strongly influences the purification problems... 

The simplest economic model for the guidance of the catalyst chemist is the standard cost sheet. This lists the variable costs (raw materials), fixed costs (capital charges) and semi-variable costs (conversion expense). Typically, these three elements may represent similar proportions of the overall cost per ton of product, but the circumstances following successful catalyst research can vary widely. 

The full cost of acrylonitrile manufacture based on methane was about 22)4/lb in 1960 (allowing 15% return). But the marginal cost—with no capital charges or overheads—was only 7 /lb. The full cost of propylene ammoxidation (with 15% return) was about 13-16ff/lb according to location. Thus, as soon as it was clear that ammoxidation was likely to... 

The total annual cost of a pipeline consists of a capital charge plus the running costs. The chief element of the running cost will be the power required to overcome the head loss which is given by equation 3,20 ... 

Cost of insulation, including installation, 70/m3. Capital charges (see Chapter 6) 15 per cent per year. Cost of fuel, allowing for the efficiency of the heating system, 6p/MJ. 

The capital cost can be included in the operating cost as an annual capital charge. There will also be an annual charge for maintenance, based on the capital cost. 

Fixed costs 5. Maintenance 6. Operating labour 7. Laboratory costs 8. Supervision 9. Plant overheads 10. Capital charges 11. Insurance 12. Local taxes 13. Royalties 5-10 per cent of fixed capital from manning estimates 20- 23 per cent of 6 20 per cent of item (6) 50 per cent of item (6) 10 per cent of the fixed capital 1 per cent of the fixed capital 2 per cent of the fixed capital 1 per cent of the fixed capital... 

Capital charges, 6% of fixed capital (bank rate 4%)... 

An interest rate of 8% will be chosen. The fixed capital charges are assumed to have occurred a year before plant startup. The working capital costs occur during... 

The capital cost of the installation = I600/V and the annual capital charges = (1600iV x 45)/100 = 702/V/year. 

The labour cost is independent of the number of effects and hence the total annual cost C is made up of the capital charges plus the cost of steam, or ... 

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