2011 International Conference on Alternative Energy in Developing Countries and Emerging Economies
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D. Interpretation
The last step is a comparison with other processes
offering a similar utility, thus allowing a critical view of
the previous steps. Comparison of environmental impacts
also requires the selection of impact categories.
Sometimes an independent critical review is necessary,
especially when comparisons are made that are used in
the public domain. In this study the interest is only in 3
cases, goal and scope, life cycle inventory, and life cycle
impact assessment.
E. Economic Analysis
(1) Life Cycle Costing (LCC)
The LCC analysis costs are grouped into six main
categories and converted into present value [8], as shown
in Eq (4).
LCC =
Cpw + Opw + Mpw + Fpw + Rpw
–
Spw
(4)
Where
C
is the capital cost, O
is an operation cost, M
is the maintenance cost, F
is the fuel cost, R
is the
replacement cost, S
is the salvage value, and pw is the
present worth.
The capital cost includes the cost of every component
of the production system, including production
machinery, buildings, equipment, and other assets related
to the overall biomass gasification power plant
throughout life cycle. The operation cost covers the cost
of land rent, rice husk, glycerine, water,
technician, and
labor. Maintenance cost is another recurring cost. This
category includes equipment maintenance, site
maintenance, system supervision, etc.
Fuel cost is the total energy consumption cost for the
system, equipment and transportation, mainly from
electricity and diesel consumption. Salvage value is a
system income that occurs at the end of the “useful life”
of a machine or other equipment in the system, and is
deducted from the final total cost.
Finally, while adding up costs over time is better than
simply comparing initial capital costs, a mathematical
method called “net present value”
is applied.
(2) Net Present Value (NPV)
It is the difference between the present value of cash
inflows and the present value of cash outflows. NPV is
used in capital budgeting to analyze the profitability of an
investment or project feasibility. Its analysis is sensitive
to the reliability of future cash inflows that an investment
or project will yield.
t
n
t
t
t
n
t
t
t
t
r
CB
r
CB
NPV
¦
¦
) 1()
(
) 1(
1
1
(5)
Where B
t
is the benefit at time t, C
t
is the cost at time t,
r is the discount rate, t is the time of the cash flow, n is
the life time of project
(1, 2, ... ,
n).
(3) Benefit-Cost Ratio
(BCR)
It is an indicator, used in the formal discipline of cost-
benefit analysis, that attempts to summarize the overall
value for money of a project. A BCR is the ratio of the
benefits of a project or proposal, expressed in monetary
terms, relative to its costs, also expressed in monetary
terms. All benefits and costs should be expressed in
discounted present values.
¦
¦
n
t
t
t
n
t
t
t
r
C
r B
1
1
) 1(
) 1(
= BCR
(6)
(4) Internal Rate
of Return
(IRR)
The internal rate of return on an investment or project
is the "annualized effective compounded return rate" or
discount rate that makes the net present value (NPV) of
all cash flows (both positive and negative) from a
particular investment equal to zero. In more specific
terms, the IRR of an investment is the interest rate at
which the net present value of costs (negative cash flows)
of the investment equals the net present value of the
benefits (positive cash flows) of the investment. The IRR
calculation is given by Eq (7).
0
) 1(
)
(
1
¦
n
t
t
t
t
r
CB
(7)
Where r is the IRR.
F. Cost Estimations
The financial model covers all the costs of the biomass
gasified power plant in 1 year as shown in Table 5.
TABLE V
C
OST OF THE BIOMASS GASIFICATION POWER PLANT IN A YEAR
Fixed Cost
(US$)
Building
5,738
Briquetting Machine
5,246
Gasification System
23,016
Wiring and Accessories
5,902
Total
39,902
Operation Cost
(US$)
Land Rent
656
Rice Husk
30,075
Glycerine
16,708
Water
31
Technician
6,295
Labor
4,328
Total
58,093
Maintenance Cost
(US$)
Building
287
Briquetting Machine
262
Gasification System
1,151
Total
1,700
Energy Cost
(US$)
Diesel
993
Elecrticity
27,941
Total
28,933
N
OTE
: 1 US$ = 30.50 THB
(
WWW
.
BANGKOKBANK
.
COM
)
23 March 2011
