Economics Evaluation of Thermodynamic Cycle – AxCYCLE Economics

Introduction

AxCYCLE Economics allows users to quickly and easily estimate and compare the cost of one or many projects and configurations to determine the viability of a thermodynamic system throughout their life cycle. Coupling with the AxCYCLE thermodynamic solver not only allows searching for cheaper projects, but also techno-economically optimizing the project as trade-offs between thermal performance (power, efficiency, heat rate, etc.) and system complexity/cost are examined closely without requiring detailed information about the different components (no mechanical or geometric data required).

The absence of detailed design data permits accurate calculations as to whether a project is at the conceptual/feasibility stage or already existing.

AxCYCLE-economics

Some tasks users can solve using AxCYCLE Economics for new facilities include:

  • Capital cost estimation
  • Selection of power generation technology and process scheme
  • Fuel type selection
  • Comparison of different scenarios/projects
  • Economic analysis throughout lifecycle

For existing facilities the scope of work in AxCYCLE Economics includes:

  • Capital cost estimation
  • Economic assessment of enlargement or renovation
  • Comparison of different scenarios/projects
  • Economic analysis throughout lifecycle
Scope

AxCYCLE Economics allows performing classes I-III economic analyses of power and heat generating units throughout its life cycle. These analyses are sufficiently reliable to get budget approval and can be used to perform scenario and configuration quantitative and qualitative studies.

Calculations of purchased equipment cost, TCI (Total Capital Investment), NPV (Net Present Value), payback period, LCOE (Levelized Cost Of Electricity), etc. can be performed. Results are presented in tabular and graphic formats (including drawing of financial charts) with export to spreadsheets as CSV files.

Similarly, annual economic indices can be outputted such as plant performance evolution, prices, revenues vs expenses, payments, cash flows, etc. for any number of projects.

AxCYCLE-economics-scope

Simulation Process

Thermodynamic systems calculated in AxCYCLE for performance can be exported to an AxCYCLE Economics file that will automatically read the main components present - HRSG (heat recovery steam generators), feedwater heaters, condensers, pumps, turbines, chillers, fans, etc. - as well as their boundary conditions and characteristics. This information allows calculating the individual cost of each component as well as their auxiliary equipment using embedded (internal library of models for main equipment is provided) or customized cost estimation models or even by directly inputting the exact cost if known.

The total purchased equipment cost (PEC), total delivery equipment cost (DEC), total capital cost investment (TCI) and specific capital cost (SCC) are also calculated at this step for any fuel, combination of models and inputted cost values and inclusion of spare parts.

Results  
Cost of Auxiliary Equipment: 98,968,166.2 USD
Total Purchase Equipment Cost (PEC): 346,388,581.8 USD
Total Delivered Equipment Cost (DEC): 381,027,440.0 USD
Total Capital Investment (TCI): 1,149,178,759.0 USD
Specific Capital Cost (SCC): 2,967.2 USD/kW

Once component costs have been determined using embedded or customized cost estimation models, cash flows can be computed after inputting data regarding the evolution of system performance, operations & maintenance costs, financial & economic assumptions (debt vs equity), escalation rates and so on. At this stage, renovations can also be included in the model to account for an improvement of performance associated with a given cost and downtime to study the advantage of overhauls on performance and finance while optimizing the number and position in time of each operation.

Cash flows are then calculated and provided as tabular and graphic formats with the option to export the results to a third-party program.

Additionally, a summary provides essential information about the project while a much more thorough report features detailed data throughout the lifetime of the system to provide to clients, investors, and so on, or, simply for additional post-processing.

Economics Project Comparison

Total Capital Investment (TCI) is the total cost needed to initially build the facility and bring it to a commercially operable status, which will be depreciated over time. It includes:

  • Civil/structural costs
  • Mechanical equipment supply and installation
  • Electrical, instrumentation and controls supply and installation
  • Project indirect costs, fees and contingencies.
  • Owner’s costs

Through this index and many others (such as payback period or specific capital cost), AxCYCLE Economics allows the operator to easily compare several alternative projects with different sets of equipment, power generation technologies and/or fuels.