Estimation of capital cost

Sensitivity Analysis An economic study should pinpoint the areas most susceptible to change. It is easier to predict expenses than either sales or profits. Fairly accurate estimates of capital costs and processing costs can be made. However, for the most part, errors in these estimates have a correspondingly smaller effecl than changes in sales price, sales volume, and the costs of raw materials and distribution. 

Cost of Gasification-Based Power Systems In the U.S. power industry the capital cost is usually reported in dollars per kilowatt ( /kW) and the cost of electricity (COE) in mills per Idlowatt-hour (a mill is one thousandth of a dollar). Estimation of capital cost and COE... 

Chiesa and Consonni [1 gave another detailed analysis for this plant in comparison with Cycle A1. They found that the efficiency dropped by 5% from that of the basic CCGT plant this is. somewhat surprising as the ab.sorption plant is smaller than that for Cycle A1 and it might have been expected that the penalty on efficiency of intrcxlucing the absorption plant would have been much less than that of Cycle Al. With this calculated efficiency and a detailed estimate of capital cost, the price of electricity was virtually the same as that of Cycle Al, i.e. 40% greater than that of the basic CCGT plant. 

Equation 6.6 can be used to make a quick estimate of capital cost in the early stages of project design, when the preliminary flow-sheets have been drawn up and the main items of equipment roughly sized. 

Typical factors for the components of the capital cost are given in Table 6.1. These can be used to make an approximate estimate of capital cost using equipment cost data published in the literature. 

Estimates of capital costs of GTL plants display a wide range while the EIA (2006) indicates capital costs at US 25 000 45 000 per barrel of daily capacity, depending on production scale and site selection, the IEA (2006) reports capital costs of GTL plants currently completed or under construction with US 84 000 per barrel. By comparison, the costs of a conventional refinery are around 15 000 per barrel per day. Gas-to-liquid is assumed profitable when crude oil prices exceed 25 per barrel and natural gas prices are in the range of 0.5-1.0/GJ (EIA, 2006). The economics of GTL are extremely sensitive to the cost of natural gas. 

For ROPE applications to tar sand mining, economic projections were published for capital costs and operating costs. Total capital costs were estimated at 53,336,000 and annual operating costs were estimated at 9,683,000. For the estimation of capital costs, direct field cost was estimated at 35,558,000. Other capital costs were based on percentages of that estimate. These cost estimates were based on mid-1989 dollars (D13089C, pp. 242-243). 

T.J. Ward, Predesign Estimating of Capital Costs , Chemical Engineering, 17 September, pp.1 21-1 24 (1984). 

The scope of the economic evaluation includes estimation of capital cost figures for a nitric add plant producing 280 tonnes/day of a 60% product. Following this capital cost estimation the total annual operating costs are estimated, both variable and fixed components being considered. Also considered is the cost of providing finance for the initial capital outlay at 25% interest per annum. 

The factorial method therefore yields a capital cost estimate of Capital Cost = Fixed Costs + Working Capital = AS1 1 million + As2.45 million = AS1 3.5 million... 

Be prepared to use the Aspen Icarus Process Evaluator (IPE) system provided by Aspen Technology, Inc. to prepare a more definitive estimate of capital cost. 

Another key factor for successful cost targeting is capital cost estimation. Capital costs for heat recovery systems include costs for heat exchangers, heaters, and coolers. Improper estimates of capital cost can lead to suboptimal trade-offs between capital and utility costs. One important aspect is good estimates of heat transfer coefficients for individual process streams since heat transfer coefficients determine the size and surface area of heat exchangers. A second consideration for accurate capital costs is realistic cost calculation for process furnaces and cooling towers in the targeting phase of work— these are much more expensive than heat exchangers. 

To give conservative estimates of capital costs, the retrofit design was simulated based on the controlling operating scenario, which is the maximal feed rate under... 

First, you need to develop technical and economic merits to build a business case. Therefore, it is imperative that you determine the benefit of your ideas, that is, what does it worth, in the very early stages. Next, you should identify, with the help of process specialists, what it takes to implement the idea. You need to do the necessary evaluation to come up with rough estimates of capital cost required to deliver the benefit for your ideas. 

In this chapter, we concentrate on the estimation of capital costs. Capital cost pertains to the costs associated with construction of a new plant or modifications to an existing chemical manufacturing plant. 

In this chapter, it is assumed that all processes considered are technically sound and attention is focused on the economic estimation of capital costs. The technical aspects of processes will be considered in later chapters. 

Talbe 7.7 Lang Factors for the Estimation of Capital Cost for Chemical Plant (from References [ ... 

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