Estimation of operating costs

In this section the components of the fixed and variable costs are discussed and methods given for their estimation. 

These are the major (essential) materials required to manufacture the product. The quantities can be obtained from the flow-sheet and multiplied by the operating hours per year to get the annual requirements. 

The price of each material is best obtained by getting quotations from potential suppliers, but in the preliminary stages of a project prices can be taken from the literature. 

The American journal Chemical Marketing Reporter, CMR (2004), publishes a weekly review of prices for most chemicals. The prices for a limited number of chemicals in Europe can be found in European Chemical News, ECN (2004). U.S. prices, converted to the local currency at the current rate of exchange, can be used as a guide to the probable price in other countries. An indication of the prices of a selected range of chemicals is given in Table 6.4 (see p. 263). 

Under this heading are included all the miscellaneous materials required to operate the plant that are not covered under the headings raw materials or maintenance materials. Miscellaneous materials will include  

---

The operating costs are defined here as all costs that are not capital or feedstock costs. The hteratirre contains a large variation in the estimation of operating costs. Where there is a range of costs reported in different somces, a mid-point has been used. 

Estimations of operating costs, income, and taxes indicate that the annual cash flow to the project (i.e., net profit plus depreciation per year) will be 310,000 flowing uniformly throughout the estimated life. This is an after-tax figure. 

OECD sources, basis 01/01/1999 15.5.2 Estimation of operating costs... 

Table 15.11 presents data for the estimation of operating costs based on the above decomposition. The basis is the material and heat balance from flowsheeting, as well as the operating labour. This checklist can be used to compute the operating costs for profit and cash flow calculation. Note that the depreciation charge should be excluded, if it is accounted separately. 

As a company budgets for its operations, both the indirect and direct costs of injuries (unidentified for indirect costs and sometimes identified for direct costs) are included in estimates of operating costs, and the unit prices for products or services are set to recover those costs and the profit margin expected. 

The estimation of operating costs associated with a typical cooling water system is illustrated in Exanple... 

In the previous chapters, a process flow diagram (Chapter 1), an estimate of the capital cost (Chapter 7), and an estimate of operating costs (Chapter 8) were provided for the production of benzene. From this material, an economic evaluation can be carried out to determine... 

All salaried employees working directly with the plant operation should be included in the estimate of supervision costs. The plant manager s secretary and other supervision support personnel are sometimes included as supervision even though they are not salaried nor in a direct supervisory position. The main thing is to make sure all employee costs are included in some category, but not duplicated in some other category. 

An estimate of the cost for each corrective measure alternative should be developed, including capital, operating and maintenance costs. Capital costs consist of direct (construction) and indirect (nonconstruction and overhead) costs. 

These models, however, can be useful if estimates are to be made of operating costs. By assigning fixed and variable costs to each activity, average and marginal unit costs at each stage of the process can be easily calculated, which will assist in decisions regarding pricing policies or whether to buy in components and materials or make them on site. ATPLAN is an example of a network-based model of this type. 

Operating costs can be estimated based on statistical analysis of operating costs in existing plants. Costs of waste disposal can be evaluated in the same way as costs for any chemical process since procedures for disposal include, in fact, unit chemical processes and operations. Costs of utilities and maintenance are best assessed based on the company data banks. Typical utility figures per m capacity of reactors in MPPs are 800-1100 kg steam/h, 60-80 kW power, and 7,000-8,000 kJ/h refrigeration capacity. 

The various components of the operating costs are summarised in Table 6.6. The typical values given in this table can be used to make an approximate estimate of production costs. 

The estimation of operating and capital costs is an important facet of process design and optimization. In the absence of firm bids or valid historical records, you can locate charts, tables, and equations that provide cost estimates from a wide variety of sources based on given values of the design variables. 

To provide some perspective on the viability of SOFCs in APU applications from a cost perspective, NETL sponsored an estimate of the cost structure of small-scale (5 kW), simple-cycle SOFC anode-supported system, operated on gasoline. The estimated manufacturing cost for such systems (see Figure 1-16) could well be close to that estimated for comparable PEM systems, while providing somewhat higher system efficiency. 

To develop the engineering data to enable estimates of operating and capital costs of a process capable of producing approximately 30,000 lb (13,600 kg) of copper per day... 

A cost estimate performed by the Westinghouse Hanford Company (WHC) showed that the development of this technology, including safety, environmental documentation, and construction of the prototype system, should cost 32 million. The estimated annual operating cost of this technology is estimated to be 9.5 million/year of operation. 

Delphi Research, Inc. (Delphi), estimates the capital cost of a 50-gaI (190-Iiter) reactor capable of processing 10 to 50 lb (4.5 to 23 kg) of waste per hour at 100,000 to 200,000. The capital cost of a permanent facility with a 5000-gal (19,000-liter) reactor capable of processing 100 to 500 lb (45 to 230 kg) of waste per hour would be 2 to 4 million. Based on a scale-up of bench-scale results, Delphi estimated that operating costs for DETOX technology would range between 150 and 1500/ton ( 165 to 1650/metric ton) of organic wastes processed (D123728,... 

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). 

The PCO system can operate basically unattended, resulting in extremely low operation and maintenance costs (D12104Q, p. 25). Over a 10-year life cycle, the Los Alamos National Laboratory estimates that operating costs will make up only 17% of total costs. Capital costs account for 43%, utilities for 14%, and maintenance for 26% of the total costs (D12104Q, p. 26). 

The developers estimate the operating costs for a full-scale version of the PST process will typically be less than the value of the recovered oil. Estimates are that the operating costs will be about 25 per ton. Installed capital costs are estimated to be about 2 million, or 10 to 15 per wet ton feed sludge capacity (D15507H, p. 1 D13883U, p. 41). However, the actual costs of the technology may vary from this because at this point in time these estimates are based only on laboratory-scale experiments. 

There are many variables associated with estimating the cost of perchlorate contamination. For many commercially available systems, cost data is estimated based on pilot- or bench-scale tests. These estimates may not include secondary contaminant disposal costs or other costs of operation. Costs are also likely to vary considerably based on site-specific conditions such as contaminant concentrations, additional contamination, treatment volumes, and treatment rates. 

Unit cost data from various vendors of the solvent extraction technology is shown in Table 1. Estimates of unit costs of the systems ranged from 95 to 700/ton. This estimate includes the cost of disposal and destruction or treatment of all residue, analyses associated with system operations, and mobilization and demobilization. According to vendors, costs can vary substantially depending on the contaminant type and concentration, the media, and the quantity of material to be treated (D11243W, p. 5.3). 

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 preliminary economics for the process have been obtained by first developing a capital cost for the process equipment and then estimating the operating cost to define the needed sales price of the metal hydride for the required after tax return on the investment. 

---