Capital cost effectiveness factor

Sindlady, heating surface area needs are not direcdy proportional to the number of effects used. For some types of evaporator, heat-transfer coefficients decline with temperature difference as effects are added the surface needed in each effect increases. On the other hand, heat-transfer coefficients increase with temperature level. In a single effect, all evaporation takes place at a temperature near that of the heat sink, whereas in a double effect half the evaporation takes place at this temperature and the other half at a higher temperature, thereby improving the mean evaporating temperature. Other factors to be considered are the BPR, which is additive in a multiple-effect evaporator and therefore reduces the net AT available for heat transfer as the number of effects is increased, and the reduced demand for steam and cooling water and hence the capital costs of these auxiUaries as the number of effects is increased. 

Conversely, however, the cost of downtime can be very high and this creates a minimum risk philosophy which runs contrary to the capital cost factor. The balance between these two forces has to be clearly stated to allow the materials engineer to operate effectively. 

It should be emphasized that the factors in Table 2.2 are average and only approximate and will vary, amongst other things, according to the type of equipment. As an example, consider the effect of materials of construction on the capital cost of distillation columns. Table 2.3 gives materials of construction cost factors for distillation columns. 

In Equation (e) an average value for the heat transfer coefficient U is assumed, ignoring the effect of pressure drop. U depends on the working fluid and the operating temperature.) Let the cost per unit area of the exchanger be CA and the annualization factor for capital investment be denoted by r. Then the annualized capital cost for the boiler is... 

The capital cost of air separation machinery is linked to both the size of the beds (which dictates the cost of piping valves), of course to molecular sieve inventory and to the size of the compressor required to run the process. A low product recovery may have little impact on the bed size factor but it has an enormous effect on the amount of gas required and on the cost of compressing that gas. Thus the recovery and bed size factors have direct links to the cost of capital and operations of air separation machines. 

Many factors act together to determine the optimum scale of a process. These include the demand for the product, competitors share of the market, any technical limitations on the size of operation and also economies of scale effects. There is an approximate logarithmic relationship between the unit production costs for a product and the volume of production, whereby considerable economies of scale can be achieved. If the costs of a process of one size (C ) is known then the costs of larger or smaller factories (C ) can be approximately obtained from the relationship C = Cx (or n° ), where n is the scale-up ratio, i.e. n=l for a plant that is twice as big. Alternatively, a graph of log capital costs vs. log of plant capacity gives a straight line with a slope equal to the scale-up factor (n). The power term varies from case to case, but is invariably less than one. This scale effect is one reason why unit production costs are inversely proportional to the scale of manufacture. For example, most amino acids are expensive and can only be used in... 

In this study, the discount rate was set at 8%, the operational life of the plant was chosen at 30 years, and the load factor was taken as 80% without specific consideration for start-up or shutdown phases. The construction period was assumed to last for three years, which leads to adding an interest cost, along with other contributions such as general facilities and engineering and contractor fees, to the process unit investment cost mentioned above. The final investment cost for an Nth of a kind plant was calculated by considering a learning effect leading to a reduction of 30% of capital costs. 

Thirteen other factors were also considered in evaluating each option (1) capital costs, (2) operating and maintenance costs, (3) liability cost rating, (4) timeliness, (5) transferability, (6) revenues, (7) equivalent annual costs, (8) pollution prevention mode, (9) net release reduction, (10) recovery costs, (11) cost effectiveness, (12) resource utilization, and (13) effects of secondary emissions. Finally, data Ifom public opinion polling in the community near the refinery were considered in evaluating potential public support or opposition to different pollution prevention strategies. 

Cost factors. Resources utilization (raw materials and utilities) capital, operating, and maintenance costs effects of option implementation on potential remedial, product, and catastrophic liabilities. 

Two types of absorption chillers are commercially available single effect and multiple effect. Compared to single-effect chillers, multiple-effect absorption chillers cost more (higher capital cost) but are more energy efficient and are, thus, less expensive to operate (lower energy cost). The overall economic attractiveness of each chiller depends on many factors, including the cost of capital and the cost of energy. 

Third, based on the previous two studies, a complete cost analysis should be carried out which includes long term use of resources and health effects, rather than the typical short-sighted accounting process in which immediately apparent factors such as pumping costs, chemical usage, and capital costs are included. 

After the individual cost factors have been estimated, a rough cost effectiveness calculation is possible [Solinas 1997]. This should provide information on the return on investment (= ratio of profit to capital employed) for the planned project. Investment in the process under consideration will be profitable if the sum of the revenues exceeds the total outlay and the profit (revenue-outlay) makes it possible to amortize and pay reasonable interest on the capital invested. The return on investment provided by a process can be increased by minimizing the production costs. Exposing the main cost factors (raw material, energy, waste disposal, personnel costs, depreciation) will therefore indicate the direction the development should take in order to improve the process (Table 6.2-1). 

The algae pond system developed for the base case was applied to each of the 15 candidate PEF sites using local data. The major factors which influenced the relative value of the cash flow at the different sites were months of operation, the level of treatment, and the plant size. Higher levels of treatment result in lower net annual cash flows and increasing capital cost. The results of the site-specific performance runs indicate that, for the present, a carbon-limited, secondary treatment system will be most cost-effective. 

We will instead discuss the issues beyond the design of the mechanical and process equipment, which can have significant effects on capital and operating costs. Some important differences between a greenfield and brownfield project are presented, followed by key considerations during site selection. The major components of capital cost are discussed, with emphasis on electrical power and the design of the cellhouse building. Finally, the factors that affect the project schedule are discussed. 

As discussed below in Section 16.7, the Aspen Engineering Suite provides methods more accurate than the six-tenths factor method of Equation (16.3) for determining the effect of scale on capital cost. The Aspen methods apply engineering-based scale-up rules to each piece of process equipment and to buildings, site development, and other items of capital cost. 

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