ENERGY, ENERGY SYSTEM ANALYSIS, AND OPTIMIZATION – Application of Thermoeconomics to the Design and

Synthesis of Energy Plants - G. Tsatsaronis

APPLICATION OF THERMOECONOMICS TO THE DESIGN AND

SYNTHESIS OF ENERGY PLANTS

G. Tsatsaronis
Technische Universität Berlin, Germany

Keywords: Exergy, Thermoeconomics, Exergoeconomics, Costs of Thermodynamic

Inefficiencies, Design Improvement.

Contents

1. Introduction
2. Principles of exergoeconomics applied to design optimization

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3. Cost balances and auxiliary equations

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4. Optimization with exergoeconomics
5. Conclusion

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Glossary O
Bibliography

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Biographical Sketch
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To cite this chapter

Summary AP
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Thermoeconomics, as an exergy-aided cost-reduction method, provides important

information for the design of cost-effective energy-conversion plants. The exergy
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costing principle is used to assign monetary values to all material and energy streams
C

within a plant as well as to the exergy destruction within each plant component. The
design evaluation and optimization is based on the trade-offs between exergy
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destruction (exergetic efficiency) and investment cost for the most important plant
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components. The design of an energy-conversion plant may be improved using either an

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exergoeconomic iterative optimization technique or approaches of mathematical

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optimization. Thermoeconomics provides the designer with information about the cost
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formation process, the interactions among thermodynamics and economics and the
interactions among plant components. This information is very valuable for improving
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the design of energy-conversion plants.

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1. Introduction

Engineers involved in the design of energy-conversion plants want, after they have
developed a first workable design, and in order to improve this design, to know the
answers to the following questions:

1. Where do thermodynamic inefficiencies in the system occur, how high are they,
and what causes them?
2. What measures or alternative designs would improve the efficiency of the
overall plant?
3. How high is the required total investment and the purchased equipment costs of
the most important plant components?

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ENERGY, ENERGY SYSTEM ANALYSIS, AND OPTIMIZATION – Application of Thermoeconomics to the Design and
Synthesis of Energy Plants - G. Tsatsaronis

4. How much do the thermodynamic inefficiencies cost the plant operator?

5. What measures would improve the cost effectiveness of the overall plant?.

The answer to the first two questions is provided with the aid of an exergy analysis (see
Exergy and Thermodynamic Analysis). An economic analysis answers the third
question. The last two questions can be answered with the aid of a thermoeconomic
analysis. This analysis is called here exergoeconomics, which is a more precise
characterization of every exergy-aided cost-reduction approach.

Exergoeconomics applied to design optimization represents a unique combination of

exergy analysis and cost analysis, to provide the designer of an energy-conversion plant
with information not available through conventional energy, exergy, or cost analyses,
but crucial to the design of a cost-effective plant. Design optimization of an energy-

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conversion system means the selection of the structure and the design parameters (the

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decision variables) of the system to minimize the total cost of the system products (over
the entire lifetime of the system) under boundary conditions associated with available
materials, financial resources, environmental protection and government regulation as

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well as with the safety, reliability, operability, maintainability, and availability of the
system. In a truly optimized system, the magnitude of every significant thermodynamic

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inefficiency (exergy destruction and exergy loss) is justified by considerations related to
investment and operating costs or is imposed by at least one of the above boundary
conditions. AP
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A thermodynamic optimization, which aims at minimizing the thermodynamic

inefficiencies, represents a subcase of the general case of design optimization. An
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appropriate formulation of the optimization problem is always one of the most

important and sometimes the most difficult task in an optimization study.
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Various names have already been given or could be given to various exergoeconomic
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approaches proposed in the past. These names include the following:

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• Exergy Economics Approach (EEA)

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• First Exergoeconomic Approach (FEA)

• Thermoeconomic Functional Analysis (TFA)
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• Exergetic Cost Theory (ECT)

• Engineering Functional Analysis (EFA)
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• Last-In-First-Out Approach (LIFOA)

• Structural Analysis Approach (SAA)
• SPECO Method (SPECOM)

The main differences among the approaches refer to the definition of exergetic
efficiencies, the development of auxiliary costing equations and the productive
structure.

2. Principles of Exergoeconomics Applied to Design Optimization

Exergoeconomics applied to the design and synthesis of energy-conversion plants is

based on two important principles that represent the fundamental connections between

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ENERGY, ENERGY SYSTEM ANALYSIS, AND OPTIMIZATION – Application of Thermoeconomics to the Design and
Synthesis of Energy Plants - G. Tsatsaronis

thermodynamics and economics. The first principle is common to all exergoeconomic

approaches and applications, whereas the second principle refers only to applications in
which new investment expenditures are needed. These principles are briefly discussed
in the following.

2.1. Exergy Costing

This principle states that exergy is the only rational basis for assigning monetary values
to the interactions an energy system experiences with its surroundings and to the
thermodynamic inefficiencies within the system. Mass, energy or entropy should not be
used for assigning the above mentioned monetary values because their exclusive use
results in misleading conclusions.

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According to the exergy-costing principle, the cost stream ( C j ) associated with an

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exergy stream ( E ) is given by
j

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C j = c j E j
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where c j represents the average cost associated with providing each exergy unit of the
stream E j in the plant being considered. Equation (1) is applied to the exergy
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associated with streams of matter entering or exiting a system as well as to the exergy
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transfers associated with the transfer of work and heat. For the cost ( Ck ) associated with
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the exergy ( Ek ) contained within the k-th component of a system we write
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Ck = ck Ek (2)
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Here ck is the average cost per unit of exergy supplied to the k-th component.
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Exergy costing does not necessarily imply that costs associated with streams of matter
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are related only to the exergy rate of each respective stream. Nonexergy related costs
can also affect the total cost rate associated with material streams. Examples include the
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cost of (a) treated water leaving a water treatment unit, (b) oxygen and nitrogen
produced in an air separation unit, (c) limestone supplied to a fluidized-bed reactor, (d)
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iron used in a metallurgical process, and (e) an inorganic chemical fed into chemical
reactors. Therefore, when significant nonexergy-related costs occur in a system, the
total cost rate associated with the material stream j (denoted by C TOT
j ) is given by

C TOT
j = C j + C NE
j (3)

Here C j is the cost rate directly related to the exergy of stream j (see Eq. (1)) and C NE
j

is the cost rate due to nonexergetic effects. The term C represents a convenient way
NE
j

for charging nonexergy-related costs from one component to other system components
that should bear such costs.

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ENERGY, ENERGY SYSTEM ANALYSIS, AND OPTIMIZATION – Application of Thermoeconomics to the Design and
Synthesis of Energy Plants - G. Tsatsaronis

2.2. Exergy Destruction Reduces Investment Cost

The exergy destruction represents in thermodynamics a major inefficiency and a

quantity to be minimized when the overall plant efficiency should be maximized. In the
design of a new energy-conversion plant, however, exergy destruction within a
component represents not only a thermodynamic inefficiency but also an opportunity to
reduce the investment cost associated with the component being considered and, thus,
with the overall plant.

Figure 1 refers to a component (subscript k) of the overall plant and shows that the cost
rate Z CI associated with capital investment (superscript CI) decreases with increasing
k

exergy destruction rate ( E D,k ) within the same component. Instead of a single curve, a

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shaded area is presented to denote that the investment cost could vary within a given
range for each given value of the exergy destruction. The effect of component size is

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taken into consideration in Figure 1 by relating both Z kCI and ( E D,k ) to the exergy rate
of the product generated in this component ( E ).

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O P,k

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C
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Figure 1: Expected relationship between investment cost and exergy destruction (or
exergetic efficiency) for the k-th component of an energy conversion system.

The vast majority of components in energy-conversion plants exhibits qualitatively the

behavior between Z kCI and E D,k shown in Figure 1. Should the investment cost increase
or remain constant with increasing exergy destruction, then the component being

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ENERGY, ENERGY SYSTEM ANALYSIS, AND OPTIMIZATION – Application of Thermoeconomics to the Design and
Synthesis of Energy Plants - G. Tsatsaronis

considered can be excluded from optimization considerations because in these cases we

would always select for this component the design point that has the lowest investment
cost and, at the same time, the lowest thermodynamic inefficiencies (i.e. the highest
exergetic efficiency).

The curves and the shaded area shown in Figure 1 are usually not known. However,
even then we can estimate the two asymptotic lines that determine the specific
⎛ E D, k ⎞
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unavoidable exergy destruction ⎜

⎜ E ⎟⎟
and the specific unavoidable investment cost
⎝ P, k ⎠
⎛ Z ⎞
UN
CI

⎜  ⎟ .
⎝ EP ⎠ k

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All design improvement efforts should focus only on the avoidable parts of exergy
destruction and investment costs. These parts are calculated by subtracting the
unavoidable value from the total value of the respective variable.

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3. Cost Balances and Auxiliary Equations

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In exergoeconomics a cost balance is formulated separately for each plant component.
Such a balance shows that the sum of cost rates associated with all exiting exergy
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streams equals the sum of cost rates of all entering exergy streams plus the appropriate
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charges (cost rate) due to capital investment as well as to operating and maintenance
expenses. The sum of the last two terms is denoted by Z k and is calculated with the aid
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of a detailed economic analysis. Accordingly, for the k-th component receiving a heat
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transfer and generating power, for example, we write

∑ ( c E ) + cw , kWk = cq,k E q, k + ∑ ( ci E i ) + Z k
E

(4)
E

e e k k
e i
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In general, if there are N e exergy streams exiting the component being considered, we
need to formulate N e − 1 auxiliary equations. Depending on the exergoeconomic
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method used, the auxiliary equations are formulated explicitly or implicitly (for
example with the aid of the so-called productive structure). For the explicit formulation
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of the auxiliary equations, the so-called F and P principles (principles referring to the
fuel and product, respectively that are used in the definition of exergetic efficiency)
provide general guidance: The F principle refers to the removal of exergy from an
exergy stream within the component being considered and states that the average
specific cost (cost per exergy unit) associated with this removal of exergy (which is part
of the exergy of fuel) must be equal to the average specific cost at which the removed
exergy has been supplied to the same stream in upstream components. The P principle
refers to the supply of exergy to a stream or to the generation of an exergy stream within
the component being considered and states that each exergy unit is supplied to any
stream associated with the exergetic product of the component at the same average cost
( cP ). Examples of auxiliary equations are found in every publication dealing with

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ENERGY, ENERGY SYSTEM ANALYSIS, AND OPTIMIZATION – Application of Thermoeconomics to the Design and
Synthesis of Energy Plants - G. Tsatsaronis

exergoeconomics. It should be noted that the formulation of the auxiliary equations

should be meaningful from both the exergetic and the economic viewpoints.

With the aid of the cost balances and the auxiliary equations, the cost rates and the costs
per unit of exergy are calculated for each exergy stream (i.e. for each material and
energy stream) in the overall plant. In this way we associate with each stream not only
mass, energy, entropy and exergy but also cost. This is the first step in understanding
the cost formation process and the real cost sources and, thus, in making a well
informed decision for improving the cost effectiveness of the design of a new system.

In the so-called productive structure, the exergetic fuel and product of each component
are illustrated graphically. A productive structure, which is not necessarily needed for
every exergoeconomic method, may assist in visualizing and better understanding the

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definitions of fuel and product as well as the auxiliary costing equations obtained from

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the F and P principles. An appropriate development of the productive structure may
graphically illustrate the exergy balance written in terms of fuel and product as well as
in terms of input and output exergy streams.

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4. Optimization with Exergoeconomics

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Principles of exergoeconomics may be effectively used to optimize or improve the cost
effectiveness of energy-conversion plants. The approaches used in that respect may be
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divided into two groups. In the first one, the designer uses exergoeconomic variables to
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improve his/her understanding of the interactions (a) between thermodynamics and

economics, and (b) among the most important plant components and to apply these
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findings in an interactive procedure in which the costs of the plant products are reduced.
To the second group belong all approaches that use mathematical optimization
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techniques to minimize the product costs or to maximize the profit. These two options
are briefly discussed in the following.
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4.1. Exergoeconomic Variables and Iterative Improvement

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The exergoeconomic evaluation is conducted at the component level with the aid of a
series of exergoeconomic variables. These include but are not limited to the variables
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presented in the following Eqs. (5) to (10), (12) and (13).

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The rate of exergy destruction is calculated with the aid of an exergy balance, which,
after introduction of fuel and product, may be written as

E D,k = E F,k − E P,k (5)

The exergetic efficiency is the ratio between the exergy of fuel and the exergy of
product:

E E
ε k =  P,k = 1 − D,k (6)
EF,k EF,k

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ENERGY, ENERGY SYSTEM ANALYSIS, AND OPTIMIZATION – Application of Thermoeconomics to the Design and
Synthesis of Energy Plants - G. Tsatsaronis

The exergy destruction ratio relates the exergy destruction in the k-th component not to
the fuel for the same component, as in the exergetic efficiency, but to the fuel of the
overall plant:

E D,k
yD,k = (7)
EF,tot

The cost rates C F,k and C P,k associated with the fuel and product, respectively, are
formed in the same way as the exergy rates E F,k and E P,k associated with fuel and
product. Then the average costs per unit of fuel exergy ( cF,k ) and product exergy ( cP,k )
are calculated from

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C F,k

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cF,k = (8)
EF, k

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C P,k
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cP,k = (9)
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P, k

The cost rate associated with exergy destruction is estimated as follows:

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C D,k = cF,k E D,k
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(10)
The cost balance can now be written
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cP,k E P,k = cF,k E F,k + Z k (11)

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Here we should note that the cost of exergy destruction is hidden in the cost balance and
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does not appear explicitly. The cost increase between cF,k and cP,k is caused by the cost
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of exergy destruction and the investment related cost ( Z ) as the relative cost difference
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( rk ) shows:
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cP,k − cF,k cF,k E D,k + Z k 1 − ε k Z k

rk = = = + (12)
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cF,k cF,k E P,k εk cF,k E P,k

Finally the exergoeconomic factor f k compares the two cost sources contributing to the
cost increase between cF,k and cP,k and shows the contribution of the investment-related
cost to the sum of cost of exergy destruction and investment-related cost:

Z k
fk = (13)
cF,k E D,k + Z k

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ENERGY, ENERGY SYSTEM ANALYSIS, AND OPTIMIZATION – Application of Thermoeconomics to the Design and
Synthesis of Energy Plants - G. Tsatsaronis

The sum shown in the denominator of the above equation is a measure of the
importance of the k-th component from the cost viewpoint within the overall system
being considered.

The iterative exergoeconomic optimization technique consists of the following steps:

1. A workable design (i.e. a design that fulfils mass and energy balances) is
developed in the first step. Several guidelines presented in the literature may
assist in developing a workable design that is relatively close to the optimal one.

2. A detailed exergoeconomic analysis and an evaluation are conducted for the

design developed in the previous step. The results from the exergoeconomic
analysis are used to determine design changes (changes in the structure and in

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the process variables) that are expected to improve the design currently being

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considered. In this step we consider only changes that affect both the exergetic
efficiency and the investment cost: For the most important plant components we
ask the question whether it is cost effective to reduce the capital investment at

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the expense of component efficiency or whether the component efficiency (and
the investment cost) should be increased. Any sub-processes that contribute to

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the exergy destruction or exergy loss from the overall plant should be eliminated
if they do not contribute to the reduction of either capital investment or fuel
costs for other components.
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3. Based on the results from the previous step, a new design is developed and the
value of the objective function is calculated for the new design. If in comparison
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with the previous design this value has been improved, we may decide to
proceed with another iteration that involves step 2. If, however, the value of the
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objective function is not better in the new design than in the previous one, we
may either revise some design changes and repeat step 2 or proceed with step 4.
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4. In this final step we optimize the decision variables that affect the cost but not
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the exergetic efficiency. After obtaining the cost optimal design, it is always
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advisable to conduct a parametric study to investigate the effect on the

optimization results of some parameters used and/or assumptions made in the
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optimization procedure.
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When applying this methodology, the designer should recognize that the values of all
exergoeconomic variables depend on the component type: heat exchanger, compressor,
turbine, pump, chemical reactor, etc. Accordingly, whether a particular value is judged
to be high or low can be determined only with reference to a particular class of
components. In that respect, combining knowledge-based and fuzzy approaches with an
iterative exergoeconomic optimization technique may be useful for the plant designer.

4.2. Approaches of Mathematical Optimization

The objective of these approaches is, as in the iterative exergoeconomic approaches, the
minimization of the total cost of owning and operating the plant over its entire life time.
However, the approaches of mathematical optimization use, in addition to the iterative

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ENERGY, ENERGY SYSTEM ANALYSIS, AND OPTIMIZATION – Application of Thermoeconomics to the Design and
Synthesis of Energy Plants - G. Tsatsaronis

approaches, cost functions that express the variation of investment cost as a function of
the decision variables used in the optimization problem. This enables the designer to
formulate a complete cost minimization problem, in which the constraints include the
plant performance equations and the cost functions for each plant component. One of
the methods used for the solution of the optimization problem is the method of
Lagrange multipliers. This method can lead to the special cases of decomposition and
thermoeconomic isolation, which may also be applied in conjunction with the
thermoeconomic functional analysis (TFA) and the engineering functional analysis
(EFA) approaches that belong to the group of mathematical optimization. Each
Lagrange multiplier can be considered as the marginal cost associated with the
corresponding function.

The analysis and optimization of an energy-conversion plant consists of the following

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steps.

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1. The functions of the overall system and of each component are identified and a
so-called functional diagram (corresponding to the productive structure) is

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developed. Where required, the negentropy streams are determined.

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2. The optimization problem including objective function, decision variables, cost
functions and constraint functions is formulated.
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3. The system of optimization equations is solved and a parametric study is
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conducted.
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For the mathematical optimization to demonstrate its merits, there is a need to express
the various costs (capital, natural resources, personnel, etc.) as functions of design and
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operation characteristics of the components or of the overall system. These cost

functions are not always available, usually not accurate, and seldom in the required
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form (a function of the decision variables). Therefore, the approaches of mathematical

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optimization cannot yet be applied to very complex energy-conversion plants. For the
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iterative exergoeconomic approach, however, there are no such limitations related to the
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complexity of the overall plant. These notwithstanding, a systematic effort to develop

appropriate functions is justified by the very interesting results obtained when
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mathematical optimization methods are successfully applied.

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5. Conclusion

The design and synthesis of energy-conversion plants requires among others appropriate
trade-offs between fuel cost and investment expenditures or between cost of
thermodynamic inefficiencies and investment costs. An exergy analysis complements
and enhances an energy analysis and identifies the location, magnitude, and causes of
thermodynamic inefficiencies in each plant component. A detailed cost analysis
provides the investment cost and the operating and maintenance expenses associated
with each plant component. The appropriate trade-offs between fuel cost and investment
expenditures can be realized with the aid of an exergoeconomic approach that calculates
the costs of thermodynamic inefficiencies and compares them with the required

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ENERGY, ENERGY SYSTEM ANALYSIS, AND OPTIMIZATION – Application of Thermoeconomics to the Design and
Synthesis of Energy Plants - G. Tsatsaronis

investment cost at the plant component level. Thus, exergoeconomics identifies and
properly evaluates the real cost sources.

The exergoeconomic approaches apply the principle of exergy costing to enable the
objective costing of energy carriers and to provide effective assistance in the decision-
making process and the optimization or improvement of energy-intensive plants. In
addition, exergoeconomics demonstrates that the exergy destruction plays a positive
role in the design of energy-conversion plants by helping engineers to keep the
investment costs associated with the plant components at an acceptable level.

From the thermodynamic viewpoint, the value of each unit of exergy destruction is the
same. Exergoeconomics demonstrates that the average cost per unit of exergy
destruction is different for each component and depends on the relative position of the

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component within the plant: Components closer to the supply of exergy to the overall

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plant have, in general, a lower cost per unit of exergy destruction than components
closer to the point of supply of the product streams from the overall plant.

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By revealing the true connections between thermodynamics and economics in the
design of an energy-conversion plant, exergoeconomics enhances the knowledge,

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experience, intuition and creativity of design engineers and provides students with the
appropriate tools to understand the cost interactions involved in design optimization.

Glossary
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Exergy: Maximum theoretical useful work (shaft work or electric work)

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obtainable from an energy system as this is brought into

thermodynamic equilibrium with the environment while the
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system interacts only with this environment.

Exergy destruction: Exergy destroyed due to irreversibilities within a system.
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Exergy loss: Exergy transfer to the system surroundings. This exergy transfer
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is not further used in the installation being considered or in any

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other installation.
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Exergy of product: The desired result (expressed in exergy terms) achieved by the
system being considered.
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Exergy of fuel: The exergetic resources expended to generate the exergy of

product.
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Exergetic The ratio between exergy of product and exergy of fuel.

efficiency:
Exergy destruction The ratio between the exergy destruction in a component and the
ratio: fuel exergy supplied to the overall system.
Exergoeconomics: A unique combination of exergy analysis and cost analysis in
which combination the exergy costing principle is applied.
Exergy costing Exergy is the only rational basis for assigning monetary values
principle: to the interactions an energy system experiences with its
surroundings and to the thermodynamic inefficiencies occurring
within the system.
Unavoidable exergy Exergy destruction rate that cannot be reduced due to
destruction: technological limitations (e.g., availability and costs of materials

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ENERGY, ENERGY SYSTEM ANALYSIS, AND OPTIMIZATION – Application of Thermoeconomics to the Design and
Synthesis of Energy Plants - G. Tsatsaronis

and manufacturing methods) regardless of the amount of

investment.
Unavoidable A minimum cost that will always incur when a component of the
investment cost: type being considered is used. This cost is independent of the
component efficiency.
Cost per unit of The average cost at which the exergy associated with the fuel is
fuel exergy: supplied to the plant component being considered.
Cost per unit of The average cost at which the exergy associated with the
product exergy: product is supplied by the plant component being considered.
Exergoeconomic The contribution of the investment-related cost to the sum of
factor: costs associated with a plant component. The latter consists of
the sum of cost of exergy destruction and the investment-related
cost.

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Productive A graphical illustration of the fuel, product and auxiliary

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structure: equations for a plant component and the overall plant.
Negentropy: The negative value of entropy transferred from a condenser to
the productive plant components in which entropy is generated.

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O This generated entropy is rejected to the environment through
the condenser. A negentropy stream flows in the opposite

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direction of an exergy stream.
Objective function: A mathematical function to be maximized or minimized when
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Decision variable: An independent variable whose value is amenable to change
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when solving an optimization problem.

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Nomenclature
C

c cost per unit of exergy

C cost associated with exergy
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E exergy
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f Exergoeconomic factor
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r relative cost difference

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W power
y exergy-destruction or exergy-loss ratio
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Z cost rate associated with investment

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Greek Letters

ε exergetic efficiency

Subscripts

D exergy destruction
F fuel exergy
k k-th system component
L exergy loss
P product exergy
q exergy or cost associated with heat transfer
tot overall system
w exergy or cost associated with transfer of work

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Synthesis of Energy Plants - G. Tsatsaronis

Superscripts

CI capital investment
UN unavoidable exergy destruction or cost

Overmarks

• per unit time

Bibliography

Bejan, A., Tsatsaronis, G., and Moran, M. (1996). Thermal Design and Optimization. New York: John
Wiley & Sons. 542 p. [Contains an introduction to the exergy concept and the economic analysis,
applications, and exergy-aided cost minimization of energy conversion systems.]

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Cziesla, F., Tsatsaronis, G. (2002). Iterative exergoeconomic evaluation and improvement of thermal
power plants using fuzzy inference systems, Energy Conversion and Management 43: 1537-1548.

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[Presents a combination of an iterative exergy-aided cost minimization technique with fuzzy systems. An
application of this approach to the optimization of a simple cogeneration plant is discussed.]

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Erlach, B., Tsatsaronis, G., and Cziesla, F. (2001). A new approach for assigning costs and fuels to
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cogeneration products. International Journal of Applied Thermodynamics; 4: 145-156. [Presents a novel

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exergy costing approach.]
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Frangopoulos, C.A. (1983), Thermoeconomic functional analysis: a method for optimal design or
improvement of complex thermal systems. PhD Thesis. Georgia Institute of Technology. [Introduces the
TFA]
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Frangopoulos C.A. (1987). Thermoeconomic functional analysis and optimization. Energy, 12(7), 563-
571. [Describes the TFA.]
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Gaggioli, R.A., Wepfer, W.J. (1980). Exergy economics. Energy – The International Journal; 5, 823-38.
[Presents the EEA.].
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Lazzaretto, A., and Tsatsaronis, G. (2006). SPECO: A systematic and general methodology for
calculating efficiencies and costs in thermal systems. Energy – The International Journal, 31:1257-1289.
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[Discusses the definition and calculation of exergetic efficiencies using various exergy components,
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presents the SPECOM and compares the various approaches.]

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Tsatsaronis, G., Lin, L. (1990). On exergy costing in exergoeconomics. In: Tsatsaronis, G., Bajura, R.A.,
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Kenney, W.F., Reistad, G.M., editors. Computer-aided energy systems analysis, vol. 21. New York:
ASME; p. 1-11. [Introduces the LIFOA.]
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Tsatsaronis, G., Penner, S.S. (Editors) (1994). “Invited Papers on Exergoeconomics”, Energy – The
International Journal, special issue, 3: 279-381. [Presents the application of four exergoeconomic
approaches to the same problem.]
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Tsatsaronis G, Winhold M. (1985). Exergoeconomic analyses and evaluation of energy conversation

plants. Energy – The International Journal; 10: 69-94. [Introduces the FEA.]
Valero, A., Lozano, M.A., Muñoz, M. (1986). A general theory of exergy savings, Part I: On the
exergetic cost, Part II: On the thermoeconomic cost, Part III: Energy savings and thermoeconomics. In:
Gaggioli, R., editor. Computer-Aided Engineering of Energy Systems, vol. 2-3. New York: ASME; p. 1-
21. [Introduces the ECT.]
Valero, A., Torres, C., Serra, L. (1992). A general theory of thermoeconomics: Part I: structural analysis.
In: Valero, A., Tsatsaronis, G., editors. International Symposium on Efficiency, Costs, Optimization and
Simulation of Energy Systems, ECOS’92. Zaragoza, Spain, June 15-18; p. 137-145. [Introduces the
SAA.]

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ENERGY, ENERGY SYSTEM ANALYSIS, AND OPTIMIZATION – Application of Thermoeconomics to the Design and
Synthesis of Energy Plants - G. Tsatsaronis

Von Spakowsky, M.R. (1986). A Practical generalized analysis approach to the optimal thermoeconomic
design and improvement of real-world thermal systems. PhD Thesis, Georgia Institute of Technology.
.[Introduces the EFA.]
Von Spakovsky M. R. and Evans R. B. (1993). Engineering functional analysis – Parts I, II. ASME J. of
Energy Resources Technology, 115, 86-99. [Describes the EFA.].

Biographical Sketch

Professor George Tsatsaronis is the Bewag Professor of Energy Engineering and Protection of the
Environment and the past Director of the Institute for Energy Engineering at the Technical University of
Berlin, Germany. He studied mechanical engineering at the National Technical University of Athens,
Greece, receiving the Diploma in 1972. He continued at the Technical University of Aachen, Germany,
where he received a Masters Degree in business administration in 1976, a Ph.D. in combustion from the
Department of Mechanical Engineering in 1977, and a Dr. Habilitatus Degree in Thermoeconomics in
1985.

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In the last thirty years he has been responsible for numerous research projects and programs related to
combustion, thermoeconomics (exergoeconomics), development, simulation and analysis of various

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energy-conversion processes (coal gasification, electricity generation, hydrogen production, cogeneration,
solar energy-conversion, oil production in refineries and also from oil shales, carbon black production,

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refrigeration processes, etc) as well as optimization of the design and operation of energy systems with
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emphasis on power plants and cogeneration systems.
He is a Fellow of the American Society of Mechanical Engineers (ASME) and a member of the Greek

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Society of Engineers. He is a Past Chairman of the Executive Committee of the International Centre for
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Applied Thermodynamics.
In 1977 he received for his Ph.D. Thesis the Borchers Award from the Technical University of Aachen,
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Germany and in 1994 and 1999 the E.F. Obert Best Paper Award from ASME. In 1997 he became a
Honorary Professor at the North China Electric Power University and in 1998 he received from ASME
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the James Harry Potter Gold Medal for his work in exergoeconomics. In 2002 he became a guest
professor at the Zhejiang University of Technology, China, and in 2004 he received a Doctoris Honoris
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Causa from the Polytechnic University of Bucharest, Rumania.

He currently serves as an associate editor of Energy - The International Journal (since 1986), Energy
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Conversion and Management (since 1995), and International Journal of Energy, Technology and Policy
(since 2002). He is a honorary editor of the International Journal of Thermodynamics (since 2003). He
co-authored with A. Bejan and M. Moran the book Thermal Design and Optimization and published
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about 200 papers and scientific reports. He is the co-editor of 21 conference proceedings publications.
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To cite this chapter

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G. Tsatsaronis,(2007),APPLICATION OF THERMOECONOMICS TO THE DESIGN AND

SYNTHESIS OF ENERGY PLANTS , in Exergy,Energy System Analysis, and Optimization, [Ed.
M

Christos A. Frangopoulos], in Encyclopedia of Life Support Systems (EOLSS), Developed under the
Auspices of the UNESCO, Eolss Publishers, Oxford ,UK, [http://www.eolss.net]
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©Encyclopedia of Life Support Systems (EOLSS)