Evaluation of Plant Capital Costs

Evaluation of Plant Capital Costs

The Total Capital Investment of a system (TCI) is only

marginally composed of the Purchase Equipment Cost (PEC),

which typically is between 15 and 40% of the Total Capital

Investment (TCI).

In general:

TCI = FCI + AC = DC + IC + AC

Where:

FCI = Fixed Capital Investment (land purchase, buildings,

purchase and installation of equipment,…)

AC = Additional Costs

DC = Direct Costs (equipment, buildings and all associated

permanent structures)

IC = Indirect Costs (services and non-permanent structures)



The first step is certainly the evaluation of the Purchase Equipment

Cost (PEC). For a company it is often possible to get accurate

estimates from previous projects, or to ask for a quotation.

Engineering Companies are usually able to evaluate PEC but are often

reluctant to provide this info. Some softwares provide cost estimates

for certain categories of equipment (e.g. Aspen Plus or Hysis for heat

exchangers).

Textbooks in Chemical Engineering provide PEC evaluation charts.

The estimates are often not accurate. In any case it is generally

necessary to correct the chart cost data taking into account several

variables, such as: design conditions (pressure, temperature,...),

materials, and first of all size of the equipment.

Evaluation of Plant Capital Costs: Spreadsheets and Web Sites

Textbooks containing useful cost evaluation charts:

Garrett (Springer), Peters-Timmerhaus (McGraw-Hill), Turton

(Prentice-Hall).

Turton book offers a popular spreadsheet (CapCost.xls).

Peters-Timmerhaus textbook offers a PEC calculation tool on the Web

site: http://www.mhhe.com/engcs/chemical/peters/data/).

The estimates of spreadsheets or web sites are often not accurate.

Cost data from the web are useful for a check at power plant level

but no disaggregation is present:

http://nyethermodynamics.com/trader/kwprice.htm

https://www.eia.gov/todayinenergy/detail.php?id=26532

Direct Cost 1 (Basis): Purchase Equipment Cost (PEC)

PEC Steam Boilers (chart)

PEC Chart

Heat

Exchangers

Cost referred to

surface

PEC - HE

PEC of Major Equipment. Pauschert, ESMAP 2009

Purchase Equipment Cost (PEC): Effect of Size

Size Effect; GTs. Pauschert, ESMAP 2009

Size Effect; CCGTs. Pauschert, ESMAP 2009

Size Effect; CCGT 140MWe. Cost Breakdown. Pauschert, ESMAP 2009

Size Effect; CCGT 580MWe. Cost Breakdown. Pauschert, ESMAP 2009

Purchase Equipment Cost (PEC): scaling exponent

Purchase Equipment Cost (PEC): Year Indexing

P. Roosen, S. Unhlenbruck

and L. Klaus, International

Journal of Thermal Sciences,

vol. 42, pp. 553-560, 2003

Cooling Tower

Roosen Cost Functions (CCGTs; 2002)

Roosen Cost Functions (CCGTs; 2002)

Cost Functions: Microturbines (PoliTO)

Similar to Roosen

(but different constants!)

Credits: Politecnico di Torino,

Corso Prof. V. Verda (2013)

Frangopoulos Cost Functions (Steam Power Plant; 1987)

The firsts

published

Attala Cost Functions (CCGTs; 2001)

Carcasci Cost Functions (CCGTs; 2016)

Carcasci, C., Facchini, B.,

Esercitazioni di Sistemi

Energetici, Esculapio,

2016

Carcasci Cost Functions (CCGTs; 2016)

(Same as Roosen, 2003…?)

Soltani et al. Cost Functions (CCGTs; 2013)

Soltani et al.

Cost Functions

(CCGTs; 2013)

Khanmohammadi et al. Cost Functions (2015) - GTs

Khanmohammadi et al. Cost Functions (2015)

Biomass Gassifier

Organic Rankine

Cycle

Components

Liszka and Ziebik Cost Functions (CCGTs, 2009)

Compressor

Combustion Chamber

Gas Turbine

HRSG

Steam Turbine

Condenser

Cost Functions for 50 MWe Thermo-Electric Energy Storage (TEES)

Roundtrip

Efficiency

57%

Estimated

Cost:

1200 €/kW

Special Equipment! TransCrit CO2 power cycle….

Direct Cost : Rough Estimates from PEC



Indirect Costs : Rough Estimates from PEC, DC and FCI

FCI = DC + IC ( Recursive)

TCI = FCI + AC = DC + IC + AC (Recursive)

TCI Costs: Synthesis



Direct Cost 1 (Basis): Purchase Equipment Cost (PEC)

Credits: G. Tsatsaronis, TUB,

Inspire Summer Course, 2007, Nova Gorica

Cost Indexing

D. Pauschert,

ESMAP Technical

Paper 122/09

Study of Equipment

Prices in the Power

Sector

Cost Escalation; Basic Equipment. Pauschert, ESMAP 2009

Cost Escalation;

Projections,

Basic Equipment.

Pauschert, ESMAP 2009

Pricing Estimates for

Cost of Power Plant

Technology, 2008

Cost Escalation; Plant Equipment. Pauschert, ESMAP 2009

Evaluation of Investment in Time

Credits: G. Tsatsaronis, TUB,

Inspire Summer Course, 2007, Nova Gorica





Reduction of Annualities to Present Value

Component cost

per unit time

Reduction of Annualities to Future Value

20182017

F

All expenses, taking place at beginning, intermediate or annual conditions, must be

reduced to a common basis for evaluation of the investment (P, F or A). The same

holds for yearly incomes when the plant starts production.

The preceding formulas allow to do that.

Expenses vs. Revenues Balance

Methods using discounted cash flows consider the time value

of money and all cash flow streams during the life of a Project:

• Net Present Value Method (NPV)

• Internal Rate of Return Method (IRR)

which the

projects

Discounted Cash Flows: NPV and IRR

Bibliography for Component Cost Correlations

L. Attala, B. Facchini, G. Ferrara, Thermoeconomic optimization method as design tool in gas-

steam combined plant realization, Energy Conversion and Management, 42, 2001, 2163-2172

Ch. Frangopoulos, Thermoeconomic Functional Analysis and Optimization, Energy, 12, 7, 563-

571, 1987

Garrett, D.E., Chemical Engineering Economics, Springer, 1989

S. Khanmohammadi, K. Atashkari, R. Kouhikamali, Exergoeconomic multi-objective optimization

of an externally fired gas turbine integrated with a biomass gasifier, Applied Thermal Engineering

91, 2015, 848-859

M. Liszka, A. Ziebik, Economic optimization of the combined cycle integrated with multi-product

gasification system, Energy Conversion and Management 50 (2009) 309–318

D. Pauschert, Study of Equipment Prices in the Power Sector, ESMAP Technical Paper 122/09

M.S. Peters, K. Timmerhaus, R.E. West, Plant Design and Economics for Chemical Engineers,

McGraw-Hill

R. Turton,R.C. Bailie,W.B. Whiting,J.A. Shaeiwitz, Analysis, Synthesis and Design of Chemical

Processes, Prentice-Hall

P. Roosen, S. Uhlenbruck, K. Lucas, Pareto optimization of a combined cycle power system as a

decision support tool for trading off investment vs. operating costs, International Journal of

Thermal Sciences, 42, 2003, 553–560

S. Soltani, S.M.S. Mahmoudi, M. Yari, T. Morosuk , M.A. Rosen , V. Zare, A comparative

exergoeconomic analysis of two biomass and co-firing combined power plants, Energy Conversion

and Management ,76 , 2013, 83–91

Evaluation of Plant Capital Costs

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