Capital cost installation factor

To calculate installed capital costs a factor of 1.6 has been used in view of the small scale of the plant (see Section 6.1.2.3.viii). To test the... 

It should be emphasized that capital cost estimates using installation factors are at best crude and at worst highly misleading. When preparing such an estimate, the designer spends most of the time on the equipment costs, which represent typically 20 to 40 percent of the total installed cost. The bulk costs (civil engineering, labor, etc.) are factored costs which lack definition. At best, this type of estimate can be expected to be accurate to 30 percent. 

Economic Factors These inchrde capital cost (eqrripment, installation, engineering, etc.), operating cost (rrtUities, maintenance, etc.), emissions fees, and life-cycle cost over the expected eqrripment lifetime. 

The total annual cost (TAG) of a process plant comprises two factors viz. the capital costs of installed plant items and the operating cost of running them... 

Total capital cost The total capital cost of the process, services and working capital can be obtained by applying multiplying factors or installation factors to the purchase cost of individual items of equipment11,12 ... 

When equipment uses materials of construction other than carbon steel, or operating temperatures are extreme, the capital cost needs to be adjusted accordingly. Whilst the equipment cost and its associated pipework will be changed, the other installation costs will be largely unchanged, whether the equipment is manufactured from carbon steel or exotic materials of construction. Thus, the application of the factors from Tables 2.2 to 2.6 should only be applied to the equipment and pipework ... 

The shortcomings of capital cost estimates using installation factors are less serious in preliminary process design if used to compare options on a common basis. If used to compare options, the errors will tend to be less serious as the errors will tend to be consistent across the options. 

Capital costs can be estimated by applying installation factors to the purchase costs of individual items of equipment. However, there is considerable uncertainty associated with cost estimates obtained in this way, as equipment costs are typically only 20 to 40% of the total installed costs, with the remainder based on factors. Utility investment, off-site investment and working capital are also needed to complete the capital investment. The capital cost can be annualized by considering it as a loan over a fixed period at a fixed rate of interest. 

For a given wind power installed, the sizing of the electrolyzer is not trivial. In the case of "stand-alone" systems, a one-to-one approach is often proposed, with the electrolyzer power input being equal to the nominal power output of the wind turbine. In this way, the electrolyzer should be able to retrieve all the wind power in the absence of load. In grid-connected systems, the same approach leads to the choice of an electrolyzer with a power supply equal to the power output of the wind turbine minus a "base load." However, the specific capital cost of the electrolyzer being almost equal to the cost of a wind turbine, it is important to take into account the capacity factor of the electrolyzer that will always be smaller than that of the wind turbine. 

The asterisk on the receivers and accumulators indicates that if these vessels are pressure vessels, a factor of 4.0 should be used instead of 2.5. The total purchased equipment installed is 9,538,000 for non-pressure vessels and the delivered cost is 10,015,000. Therefore, the fixed capital investment installed would be 10,015,000 x 1.035 x 1.040 = 10,780,000. Using pressure vessels increases the total purchased equipment cost 667,000 therefore, the fixed capital investment for this case including inflation would be 10,780,000 x 1.05 x 1.035 X 1.04 = 11,534,000. 

All prices are as of mid-1975. Escalation to the end of 1984 requires a factor of 1.8. However, the location of the optimum will be approximately independent of the escalation if it is assumed that equipment and utility prices escalate approximately uniformly so the analysis is made in terms of the 1975 prices. Annual capital cost is 50% of the installed price/year. 

The relation between cost per unit length C of a pipeline installation and its diameter d is given by C = a + bd where a and b are independent of pipe size. Annual charges are a fraction of the capital cost. Obtain an expression for the optimum pipe diameter on a minimum cost basis for a fluid of density p and viscosity p flowing at a mass rate of G. Assume that the fluid is in turbulent flow and that the Blasius equation is applicable, that is the friction factor is proportional to the Reynolds number to the power of minus one quarter. Indicate clearly how the optimum diameter depends on flowrate and fluid properties. 

The total capital investments costs was estimated on the basis of the equipment costs plus a specific installation factor and is shown in Table 3. An additional of 20% of the total installed equipment costs was included for engineering and contingency costs. The main part of these costs are due to the extraction column, EC, (this includes the price of steel to be used to make the column and the packing expenses) and the main gas compressor, C. 

The second step is to estimate the direct installation costs by summing all the cost factors involved in the direct installation costs, which include piping, insulation, foundation and supports, and so on. The sum of these factors is designated as the DCF (direct installation cost factor). The direct installation costs are then the product of the DCF and X. The third step consists of estimating the indirect installation cost. Here all the cost factors for the indirect installation costs (engineering and supervision, startup, construction fees, and so on) are added the sum is designated by ICF (indirect installation cost factor). The indirect installation costs are then the product of ICF and X. Once the direct and indirect installation costs have been calculated, the total capital cost (TCC) may be evaluated as follows ... 

The annualized capital cost (ACC) is the product of the CRF and TCC and represents the total annualized installed equipment cost distributed over the lifetime of the project. The ACC reflects the cost associated with the initial capital outlay over the depreciable life of the system. Although investment and operating costs can be accounted for in other ways such as present-worth analysis, the capital recovery method is often preferred because of its simplicity and versatility. This is especially true when comparing somewhat similar systems having different depreciable lives. In such decisions, there are usually other considerations besides economic, but if all other factors are equal, the alternative with the lowest total annualized cost should be the most viable. 

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