Economical performance

In most processes, the largest individual cost is raw materials. Raw materials costs and product prices tend to have the largest influence on the economic performance of the process. The value of raw materials and products depends on whether the materials in question are being bought and sold under a contractual arrangement (either within or outside the company) or on the open market (the spot price). Open-market prices can fluctuate considerably with time. Products are normally sold at below open-market price when under a contractual arrangement. 

Chemical processes will in the future need to be designed as part of a sustainable industrial development which retains the capacity of ecosystems to support industrial activity and life. This book therefore places a high emphasis on waste minimization and energy efficiency in the context of good economic performance and good health and safety practices. 

The project cashflow forms the basis of the economic evaluation methods which will be described. From the cashflow a number of economic indicators can be derived and used to judge the attractiveness of the project. Some of the techniques to be introduced allow the economic performance of proposed projects to be tested against investment criteria and also to be compared with alternative investments. 

Project screening means checking that the predicted economic performance of a project passes a prescribed threshold or hurdle . Investors commonly apply a screening value to the project, which is a chosen IRR at a chosen oil price (for example, 20% IRR at 20/bbl). Provided the project IRR exceeds the hurdle rate the project is considered further, otherwise it is rejected in current form. 

In order to test the economic performance of the project to variations in the base case estimates for the input data, sensitivity analysis is performed. This shows how robust the project is to variations in one or more parameters, and also highlights which of the inputs the project economics is more sensitive to. These inputs can then be addressed more specifically. For example if the project economics is highly sensitive to a delay in first production, then the scheduling should be more critically reviewed. 

The economics of most processes are determined by the steady-state operating conditions. Excursions from these steady-state conditions generally average out and have an insignificant effec t on the economics of the process, except when the excursions lead to off-specification produc ts. In order to enhance the economic performance of a process, the steady-state operating conditions must be altered in a manner that leads to more efficient process operation. 

At the fan-tip speeds required for economical performance, a large amount of noise is produced. The predominant source of noise is vortex shedding at the traihug edge of the fan blade. Noise control of aircooled exchangers is required oy the Occupational Safety and Health... 

The use of process flow diagrams and material balances are worthwhile methods to quantify losses or emissions and provide essential data to estimate the size and cost of additional equipment, other data to evaluate economic performance, and a basefine for tracking the progress of minimization efforts (Ref. 3). Material balances should be apphed to individual waste streams or processes and then utilized to construct an overall balance for the facility. Details on these calculations are available in the literature (Ref. 8). In addition, an introduction to this subject is provided in the next section. 

Hillary, Ruth, ed. ISO 14001 Case Studies and Practical Experiences. Sheffield, U.K. The Network for Environmental Management, Greenleaf Publishing, 2000. - Contains case studies that provide experiences of companies and what certifiers look for when they visit firms. Highlights ISO 14001 s strengths and weaknesses. Analyzes environmental and economic performance improvements under ISO 14001. 

The EPA argues that the cost of compliance to environmental regulations is small in comparison to baseline industry expenditures. However, there are many hidden costs that oftentimes are not considered when contemplating a control technology investment, and which can escalate and adversely impact on bottom-line economic performance. These so-called other costs include, but are not limited to ... 

In many cases, it is possible to replace environmentally hazardous chemicals with more benign species without compromising the technical and economic performance of the process. Examples include alternative solvents, polymers, and refrigerants. Group contribution methods have been conunonly used in predicting physical and chemical properties of synthesized materials. Two main frameworks have... 

Economics No quality system makes sense unless it is contributing to improvement in economic performance. However, until the bulk of the quality system is in place it cannot be effective. 

Calculations of life-cycle costs, net benefits, or other measures of economic performance are commonly performed on electronic calculators, commercial spreadsheet software, or by hand. The calculation approach for life-cycle costs is to first compute the net cost amount in each period for each alternative, C(t,x). The life-cycle cost (LCC) of each alternative is then calculated as the sum of the discounted values of C(t,x) over the entire planning horizon ... 

Efficient and economical performance of distillation equipment is vital to many processes. Although the art and science of distillation has been practiced for many years, studies still continue to determine the best design procedures for multicomponent, azeotropic, batch, raul-tidraw, multifeed and other types. Some shortcut procedures are adequate for many systems, yet have limitations in others in fact the same might be said even for more detailed procedures. 

Units are usually operated with 50-200 psig steam, although pressures down to 2 psig are possible, and 30 psig units are giving economical performance for their specific situation. 

Similar findings on dairy farms in Canada were reported by Stonehouse, et al. (2001). The superior economic performance on organic dairy farms was attributed to lower costs of production for almost all material inputs, including dairy herd replacements and livestock feeds. The organic dairy farmers used more land for feed crop production for the dairy cows in order to be as self-sufficient as possible. The conventional dairy farmers imported crop seeds, synthetic chemical fertilisers and pesticides, feedstuffs and herd replacements, with more of their land being devoted to cash crops. 

As the purpose of investing money in chemical plant is to earn money, some means of comparing the economic performance of projects is needed. 

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. 

As well as economic performance, many other factors have to be considered when evaluating projects such as those listed below ... 

Once the flowsheet structure has been defined, a simulation of the process can be carried out. A simulation is a mathematical model of the process that attempts to predict how the process would behave if it were constructed (Figure 1.2b). Having created a model of the process, the flowrates, compositions, temperatures and pressures of the feeds can be assumed. The simulation model then predicts the flowrates, compositions, temperatures, and pressures of the products. It also allows the individual items of equipment in the process to be sized and predicts, for example, how much raw material is being used or how much energy is being consumed. The performance of the design can then be evaluated. There are many facets to the evaluation of performance. Good economic performance is an obvious first criterion, but it is certainly not the only one. 

For instance, Costanza et al. [24] estimated the value of 17 ecosystem services in 16 biomes to an average US 33 trillion (12 zeroes) globally. This value is almost twice the size of the compared global GDP (or Global Gross National Product to be precise). The ecological economists estimate these values so that ecosystems and biodiversity can be included in new calculations of economic efficiency and economic performance. 

North, D. (1990), Institutions, Institutional Change and Economic Performance, Cambridge University Press. 

In chemical analysis, chromatography may permit the separation of more than a hundred components from a mixture in a single run. Explain why chromatography can provide such a large separating power. In production chromatography, the complete separation of a mixture containing more than a few components is likely to involve two or three columns for optimum economic performance. Why is this ... 

Demonstration of environmental and economic performance for disposition of hazardous wastes... 

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