Economic evaluation operating costs

Economic evaluations of algal production indicate that production costs vary from 0.15 to 4.00/kg of algal product, depending on type of bioreactor, culture technique, and operating conditions (51). For systems with controlled agitation and carbonation, including raceways and tubular reactors, production costs ate estimated to range from 2.00 to 4.00/kg. 

An appropriate procedure for executing the design of an absorber-stripper system is to set up a carefully selected series of design cases and then evaluate the investment costs, the operating costs, and the operability of each case. Some of the economic factors that need to be considered in selec ting the optimum absorber-stripper design are discussed later in the subsec tion Economic Design of Absorption Systems. ... 

Economic evaluations of waste-reduction options should involve a comparison of operating costs to illustrate where cost savings would accrue. For example, a waste-reduction measure that reduces the amount of raw material lost down the drain during the process will reduce raw-material costs. Raw-material substitution or process changes may reduce the amount of solid waste that must be transported offsite, reducing the transport costs for waste disposal. 

The choice of whether to purchase or generate electricity and decisions on generator or cable configuration and sparing are often not obvious. An economic study evaluating capital and operating costs and system reliability of several alternatives may be required. 

To simplify the evaluation, it is to the advantage of the purchaser to advise the manufacturer of the dollar cost per installed horsepower in his plant and the operating costs for power. The manufacturer can select, from a wide combination of units, the size and number that are the most economical. Otherwise, the bids should be requested as based on lowest operating cost or lowest capital cost, neither being the best in itself except for certain purposes. 

For small projects, and for simple choices between alternative processing schemes and equipment, the decisions can usually be made by comparing the capital and operating costs. More sophisticated evaluation techniques and economic criteria are needed when decisions have to be made between large, complex projects, particularly when the projects differ widely in scope, time scale and type of product. Some of the more commonly used techniques of economic evaluation and the criteria used to judge economic performance are outlined in this section. For a full discussion of the subject one of the many specialist texts that have been published should be consulted Brennan (1998), Chauvel et al. (2003) and Vale-Riestra (1983). The booklet published by the Institution of Chemical Engineers, Allen (1991), is particularly recommended to students. 

Overall, there are always considerable uncertainties associated with an economic evaluation. In addition to the errors associated with the estimation of capital and operating costs, the project life or interest rates are not known with any certainty. The important thing is that different projects, and options within projects, are compared on the basis of consistent assumptions. Thus, even though the evaluation will be uncertain in an absolute sense, it will still be meaningful in a relative sense for choosing between options. 

The initial goal of the preliminary process study is to obtain an economic evaluation of the process, with the minimum expenditure of time and money. During this stage, all information necessary to obtain a reasonably accurate cost estimate for building and operating the plant is determined. It is expected that these costs will be within 10% of the actual costs. 

There are different ways of producing chlorine from brine, for example, Dow cells, Hooker cells, and mercury cells. Which process is to be used must be known in order to make an accurate economic evaluation, since the capital costs and operating costs are different for each of these processes. The process engineer may have to investigate the different processes and economically evaluate each before deciding which process is best. 

So far we have explained how to estimate capital and operating costs. In Example 3.3, we formulated an objective function for economic evaluation and discovered that although the revenues and operating costs occur in the future, most capital costs are incurred at the beginning of a project. How can these two classes of costs be evaluated fairly The economic analysis of projects that incur income and expense over time should include the concept of the time value of money. This concept means that a unit of money (dollar, yen, euro, etc.) on hand now is worth more than the same unit of money in the future. Why Because 1000 invested today can earn additional dollars in other words, the value of 1000 received in the future will be less than the present value of 1000. 

In Chapter 3 we discussed the formulation of objective functions without going into much detail about how the terms in an objective function are obtained in practice. The purpose of this appendix is to provide some brief information that can be used to obtain the coefficients in objective functions in economic optimization problems. Various methods and sources of information are outlined that help establish values for the revenues and costs involved in practical problems in design and operations. After we describe ways of estimating capital costs, operating costs, and revenues, we look at the matter of project evaluation and discuss the many contributions that make up the net income from a project, including interest, depreciation, and taxes. Cash flow is distinguished from income. Finally, some examples illustrate the application of the basic principles. 

The preceding listed sources provide information on current and often historical capital and operating costs that can be used in your current and projected economic evaluation. 

In carrying out an economic evaluation of a proposed process or a modification of an existing one, estimation of future operating costs is just as important as estimating the capital costs involved in the analysis. 

B. l Capital Costs / B.2 Operating Costs / B. 3 Taking Account of Inflation / B.4 Predicting Revenues in an Economic-Based Objective Function / B.5 Project Evaluation / References... 

For the economic evaluation, this price is compared with the costs of cheaper hydrogen production options, like natural gas reforming. With an operating time of 6750 h and a natural gas price of 2.35 ct/kWh, hydrogen costs are at 5.3 ct/kWh. This is much lower than the surplus wind pathway, if an electricity price of 4 ct/kWh is assumed. Further calculations have been performed, to show at what natural gas price natural gas reforming would reach hydrogen costs from surplus wind electricity the hydrogen price of surplus wind electricity is only reached at a natural gas price of 5.5 ct/kWh. If a carbon tax of 20/t is introduced, the necessary natural gas price is 5 ct/kWh (compare Fig. 16.10). 

The catalytic esterification of ethanol and acetic acid to ethyl acetate and water has been taken as a representative example to emphasize the potential advantages of the application of membrane technology compared with conventional distillation [48], see Fig. 13.6. From the McCabe-Thiele diagram for the separation of ethanol-water mixtures it follows that pervaporation can reach high water selectivities at the azeotropic point in contrast to the distillation process. Considering the economic evaluation of membrane-assisted esterifications compared with the conventional distillation technique, a decrease of 75% in energy input and 50% lower investment and operation costs can be calculated. The characteristics of the membrane and the module design mainly determine the investment costs of membrane processes, whereas the operational costs are influenced by the hfetime of the membranes. 

Economic analyses may evaluate the effect of drugs or therapies over several years, and because economic analyses operate in the present, the costs and consequences that occur in the future have to be adjusted to reflect their present-day values. This process is called discounting - discoimting basically assumes that one unit of monetary (or health outcome) value is worth more today than it will be worth in the future, therefore, future emits have to be reduced to reflect this expected decrease in value. Question seven addresses the issue of differential... 

The variable operating costs include the consumption of feed + fuel, cooling water and electricity. For their evaluation, it was taken into account that in the actual economic scenario the costs of such a scheme are mainly related to those of the natural gas and of the plant thermal efficiency. The evaluation is reported in Table 9.3. 

In each of the previously mentioned methods lies the possibility for improving the greenness and efficiency of existing and developing processes. This can lead to the reduction and elimination of hazardous solvents, improved process yields, and lower operation costs. However, it is important to note that each method requires a significant amount of data in order to evaluate a pharmaceutical process and appropriate process alternatives. To date, there is not an all-inclusive method that accounts for every possible environmental, human safety, and economic factor of interest. 

The economic evaluation of treatment processes is very important in selecting an AOP from different available systems. The overall costs are represented by the sum of the capital, operating, and maintenance costs (Table... 

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