Realistic capital costs

The results of Example 5.2 apply to a reactor with a fixed reaction time, i or thatch- Equation (5.5) shows that the optimal temperature in a CSTR decreases as the mean residence time increases. This is also true for a PFR or a batch reactor. There is no interior optimum with respect to reaction time for a single, reversible reaction. When Ef < Ef, the best yield is obtained in a large reactor operating at low temperature. Obviously, the kinetic model ceases to apply when the reactants freeze. More realistically, capital and operating costs impose constraints on the design. 

CSTRs, shell-and-tube reactors, and single-tube reactors, particularly a single adiabatic tube. Realistically, these different reactors may all scale similarly e.g., as but the dollar premultipliers will be different, with CSTRs being more expensive than sheU-and-tube reactors, which are more expensive than adiabatic single tubes. However, in what follows, the same capital cost will be used for all reactor types in order to emphasize inherent kinetic differences. This will bias the results toward CSTRs and toward shell-and-tube reactors over most single-tube designs. 

Economics is the dominant factor in process selection by industrial users. In weighing these economics, capital investments for alternative processes must be obtained on a consistent basis, and operating costs must be calculated using realistic unit costs for such items as electricity and process steam. Perhaps most importantly, the potential markets for the ultimate products from the plant must be accurately assessed. 

The specification of a control scheme and the associated instrumentation for a chemical plant should satisfy several main objectives. First, the plant should operate at all times in a safe manner. Dangerous situations should be detected as early as possible and appropriate action initiated, also the process variables should be maintained within safe operating limits. Second, the plant should operate at the lowest cost of production. Finally, the production rate and the product quality must be maintained within specified operating limits. These objectives may be conflicting, and the final control scheme to be adopted is based upon a realistic and acceptable compromise between the various factors. The main conflict is between the need to design and operate as safe a plant as possible and the desire to produce the chemical at the lowest cost. Safe plant operation can be expensive, both in terms of the capital cost of instrumentation and the annual operating costs, e.g. maintenance. 

The calculations shown in Figure 11.18 assume that a hard vacuum is maintained on the permeate side of the membrane. The operating and capital costs of vacuum and compression equipment prohibit these conditions in practical systems. More realistically, a carrier facilitated process would be operated either with a compressed gas feed and atmospheric pressure on the permeate side of the membrane, or with an ambient-pressure feed gas and a vacuum of about 0.1 atm on the permeate side. By substitution of specific values for the feed and permeate pressures into Equation (11.19), the optimum values of the equilibrium constant can be calculated. A plot illustrating this calculation for compression and vacuum operation is shown in Figure 11.19. 

Figure 6 shows the sensitivity of hydrogen price to feedstock price, all plotted on the same scale. It should be noted that the "feedstock for electrolysis is electric power, not primary fuel, so that capital costs and inefficiencies associated with power generation are included in the raw material cost. The circles on this figure represent the base case for our calculations and reflect approximately realistic values for raw material costs for large-scale plants in 1979. 

Another question relates to the availability of large enough quantities of iodine in the world. First estimates of the Iodine hold-up in a 600 MW VHTR coupled hydrogen production plant, designed using a detailed flow-sheet of the cycle, are on the order of 3 0001 (corresponding to a 45M capital cost, and consequently 0.045 per kg H2). This amount seems realistic when compared to the world yearly production of 20,000 t and the estimated world reserves of 15.10 t [2]. 

On the basis of energy efficiency alone, CCRO appears to be preferable to distillation. However, the merit of the process can only be determined when improved membranes similar to that used as the hypothetical case in our analysis become available, which in turn will enable a realistic estimate of the capital costs to be included in the overall cost of ethanol enrichment. 

Since ammonia production is highly capital intensive, it is especially important that the estimated or assumed capital costs be as accurate and realistic as possible. When the process, feedstock, and location have been selected, an accurate estimate of the capital requirements can be made. The World Bank has considered the following four different scenarios for investment costs. 

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. 

Let s make the example more realistic. Let s assume you first need to purchase the desalinator, which costs 440,(X)0. Expenses for equipment are capital costs, not operating costs. As such, the expense of purchasing the desalinator is not included in Eq. (3.88) and thus does not affect the profit. But when we bought the desalinator. 

Cc = capital cost (including depreciation and interest a 10-year write-off period is realistic in the present application)... 

For capital cost estimations using CAPCOST, a more realistic range i -20 to +30% ... 

As the organization implements occupational safety measures, it must establish timelines for completing the associated tasks. This portion of the occupational safety implementation process should consider the abilities of staff members and the time that is realistically necessary to complete projects. The amount of preparation required to implement occupational safety measures may limit their immediate achievability. If the occupational safety measure bears no capital cost, such as policy and procedural changes, or can be incorporated into a new project, the countermeasure can often be implemented immediately. When countermeasures require advance budgeting or coordination with outside vendors, implementation may be delayed. 

Table I shows a detailed breakdown of the operating cost for this plant. The cost of steam represents about half of the water cost for the optimum plant. The capital charges for the evaporator plant, which includes amortization, interest on working capital, and real estate, represent about 30%. The remaining 15 to 20% is equally divided between the cost of chemicals for scale control and all the other costs. The converted water is estimated to cost approximately 42 cents per thousand gallons. This water cost represents a realistic figure for a large-capacity multistage flash evaporator that could be built today when the energy in the form of steam costs between 35 and 40 cents per million B.t.u.

Consideration of depreciation as a cost permits realistic evaluation of profits earned by a company and, therefore, provides a basis for determination of Federal income taxes. Simultaneously, the consideration of depreciation as a cost provides a means whereby funds are set aside regularly to provide recovery of the invested capital. When accountants deal with depreciation, they must follow certain rules which are established by the U.S. Bureau of Internal Revenue for determination of income taxes. These rules deal with allowable life for the depreciable equipment and acceptable mathematical procedures for allocating the depreciation cost over the life of the asset. 

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