Economic Issues of Biofuels as Fuel for SOFC

Bio-ethanol was chosen because it can be used in fuel cells and in ICE (albeit requiring some modification of the engine and/or mixing with additional substances). 

Usually, the following two economic indicators are used to assess the effectiveness of an investment Net present value (NPV) and internal rate of return (IRR). In practice, it is difficult to compare different investments on the basis of only one indicator because NPV depends on the value of investments (not comparable for two investments with different initial values) whereas IRR value is determined at the end of the project. Additionally, NPV is sensitive to the assumed discount rate in contrast IRR is independent of the value of the initial investment and independent of the discount rate. A financial profile can be prepared for NPV which shows a very good return on the investment process over the period. Since cash flows were calculated according to the free cash flow for the firm (FCFF) formula, no financial costs were included. 

The analysis is based on the assumptions that the economic life of the investment is 15 years and the residual value at term is 0. 

A comparison of selected fuels in terms of their cost versus chemical energy is presented in Table 5.19. It should be noted that in the case of bio-ethanol for piston engines, the fuel must contain additives (e.g. 15% gasoline). 

The electricity market is fairly well defined, so the electricity sales price can be determined with a high rehabUity, but depending on the country and the particular circumstances there may be substantial differences (Table 5.21). 

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