1.8 Exergoeconomics

1.
8 Exergoeconomics
Pouria Ahmadi, University of Illinois at Urbana-Champaign (UIUC), Urbana, IL, United States
Ibrahim Dincer, University of Ontario Institute of Technology, Oshawa, ON, Canada
r 2018 Elsevier Inc. All rights reserved.
1.8.1 Introduction 340

1.8.2 Principles of Exergoeconomics 342
1.8.2.1 Capital Investment Cost 343
1.8.2.2 Operating and Maintenance Costs 344
1.8.2.2.1 Exergy costing 344
1.8.2.2.1.1 Turbine 344
1.8.2.2.1.2 Compressors/pumps 345
1.8.2.2.1.3 Boiler 346
1.8.2.3 Illustrative Example 1 (Simple Cogeneration System) 346
1.8.2.3.1 Modeling 347
1.8.2.3.1.1 Case 1 347
1.8.2.3.1.2 Case 2 348
1.8.2.3.2 Aggregation level for applying exergy costing 348
1.8.3 Exergy-Based Economic Evaluation 350
1.8.3.1 Cost Balance, Fuel and Product Associated Costs, and Supplementary Equations 350
1.8.3.2 Exergoeconomic Evaluation 350
1.8.3.2.1 Cost of exergy destruction 352
1.8.3.2.2 Cost of exergy loss 352
1.8.3.2.3 Relative cost difference 352
1.8.3.2.4 Exergoeconomic factor 352
1.8.3.2.5 Illustrative example 2 (CGAM Cycle) 352
1.8.3.2.5.1 Energy analysis 352
1.8.3.2.6 Exergy analysis 354
1.8.3.2.7 Results 356
1.8.4 Case Studies 357
1.8.4.1 Solar Based Energy System 357
1.8.4.1.1 Thermodynamic analysis 357
1.8.4.1.2 Exergoeconomic analysis 359
1.8.4.2 Fuel Cell Based Combined Heat and Power System 361
1.8.4.2.1 Energy analysis 362
1.8.4.2.2 Gasifier 363
1.8.4.2.3 Fuel cell 363
1.8.4.2.4 Heat recovery steam generator 363
1.8.4.2.5 Overall system efficiencies 363
1.8.4.2.6.1 Results and discussion 364
1.8.4.3 Organic Rankine Cycle Integrated System With Geothermal Energy 365
1.8.4.3.3 Results and discussion 367
1.8.4.4 Single Effect Li/Br H2O Absorption Refrigeration System 368
1.8.4.4.1.1 Exergy analysis 369
1.8.4.4.3 Results and discussion 371
1.8.5 Future Directions 373
1.8.6 Closing Remarks 374
References 374
Further Reading 375
Relevant Websites 375
340 Comprehensive Energy Systems, Volume 1 doi:10.1016/B978-0-12-809597-3.00107-3

Exergoeconomics 341
1.8.1 Introduction
Besides the consideration of technical performance in designing a thermal system, economical performance should be taken into
account, which can lead to a better design. Therefore, there is a need to estimate the major costs involved in the project such as
total capital investment (CI) cost, fuel costs, operating and maintenance (O&M) expenses, and cost of the final products. One of
the most important factors for the selection of energy systems is the cost of the final product, which could for instance be electricity
cost for power plants, cost of hydrogen for a hydrogen plant, or cost of fresh water in a desalination plant. The total cost of an item
consists of fixed costs and variable costs. The term fixed costs is associated with those costs that do not depend strongly on the
production rate. Costs for depreciation, taxes on facilities, insurance, maintenance, and rent belong to this category. Variable costs
are those costs that vary more or less directly with the volume of output. These include the costs for materials, labor, fuel, and
electric power [1]. The product cost estimation in a multiproduct energy conversion plant has several methodological challenges.
In order to have better understanding of the economical assessment of energy systems, it is better to link it with exergy, which is a
potential tool to determine the losses in the system. Thus, exergoeconomics can assist us to achieve this goal. Exergy-based cost
analysis aims at determining the costs of products and irreversibilities (exergy destruction) generated in energy conversion
processes, by applying cost partition criteria, which are a function of the exergy content of every energy flow that takes place in the
studied process [2].
Realization of mentioned costs leads to improvement in the system performance and reduction of product cost as a result. This
combination of exergy analysis with economic concepts is called exergoeconomic analysis when monetary costs are used and
exergy analysis when exergy costs are employed. From the modeling point of view, simulation and optimization procedures of
energy systems, the thermoeconomic or the exergoeconomic analysis basically aggregates two sets of equations: the cost balances
(also known as cost rate balances) for components/equipment or processes and the exergy-based cost partition criteria. As
mentioned by Tsatsaronis [3], the steps of exergoeconomic analysis are listed as follows:
• Detailed exergy and economic analysis of the components and the overall energy system.
• Exergy costing.
• Exergoeconomic evaluation of every component, and of the overall system.
It is important to emphasize that the more detailed the cost balances are, the better the results provided by the thermo-
economic or the exergoeconomic analysis will be. The information generated by the exergoeconomic analysis is quite unlike that
provided by the traditional methods used for assessing the economic viability of energy-saving projects, such as those that
determine the net present value (NPV), the internal rate of return (IRR), and the payback period. The thermoeconomic analysis
allows the determination of production costs based on the quality of the energy conversion processes by using a rational criterion
of costs distribution along the processes that is the thermodynamic value of each product, or its exergy [2].
In recent decades, exergoeconomics and thermoeconomics have been increasingly utilized by researchers, combining ther-
modynamics with economics. Many such studies have been reported, especially for power generation and combined heat
and power (CHP). Rosen and Dincer [4] performed an exergoeconomic analysis of a coal-fired electricity generating station,
and found the ratio of thermodynamic loss rate to the capital cost to be a significant parameter in evaluating plant performance
that may allow thermodynamics and economics to be successfully traded off in plant designs. Ahmadi et al. [5] carried out
energy, exergy, and exergoeconomic analyses of a steam power plant in Iran, and considered the effect of the load variations and
ambient temperature on component exergy destructions. The results showed energy losses to be mainly associated with the
condenser, where the energy loss rate to the environment was 307 MW, while the boiler energy loss rate was only 68 MW.
However, the irreversibility rate of the boiler was significantly higher than those of the irreversibility rates of the other components.
Exergy and exergoeconomic analyses of CHP plants [6–12] have demonstrated the usefulness of these methods for thermal
systems.
Sahoo [13] carried out an exergoeconomic analysis and optimization of a cogeneration system that produced 50 MW of
electricity and 15 kg/s of saturated steam at 2.5 bar. The researcher optimized the unit using exergoeconomic principles and
evolutionary programming, and showed that the cost of electricity production was 9.9% lower for the optimum case in terms of
exergoeconomics compared to a base case. Sayyaadi [14] performed an exergoeconomic optimization of a 1000-MW light water
nuclear power generation system using a genetic algorithm considering 10 decision variables, and showed that the fuel cost of the
optimized system was greater than that for a base case. Shortcomings in the optimized system were compensated by larger
monetary savings in other economic sectors. Ahmadi et al. [15] optimized a combined cycle power plant (CCPP) using sequential
quadratic programming (SQP) and an objective function based on the total cost rate of the plant, and illustrated the effect of fuel
cost on design parameters.
Temir and Bilge [16] studied a thermoeconomic analysis of a trigeneration system that produces electrical power with a natural
gas fed reciprocating engine and that yields absorption cooling by making use of the system's exhaust gases. Ehyaei and Mozafari
[17] performed energy, economic, and environmental impact assessment of a micro gas turbine employed for on-site combined
heat and power production, and examined the optimization of the micro turbine application to meet the electrical, heating, and
cooling loads of a building. Mago and Hueffed [18] evaluated a turbine driven combined cooling, heating, and power (CCHP)
system for large office buildings under various operating strategies, and explored the use of carbon credits to show how the
possible reduction in carbon dioxide emissions via a CCHP system could translate into economic benefits.
342 Exergoeconomics
Ozgener et al. [19] developed an exergoeconomic model for a vertical ground source heat pump (GSHP) residential heating
system. They calculated the ratio of thermodynamic loss rate to capital cost values to be in the range of 0.18 to 0.43, and provided
a linear correlation between the value of this parameter and ambient temperatures. They also drew attention to the compressor as
the component where the most exergy destruction occurred. Ozgener and Hepbasli [20] conducted an exergoeconomic analysis for
a solar assisted GSHP heating system with a 50-m vertical and 32-mm nominal diameter U bend ground heat exchanger. They
determined that the total exergy loss values were between 0.010 and 0.480 kW and found the largest energy and exergy losses in
the greenhouse compressor. Moreover, they have calculated the ratio of thermodynamic loss rate to capital cost values to be in the
range of 0.035–1.125. Petrakopoulou et al. [21] studied exergoeconomic and exergoenvironmental analyses of a CCPP with
chemical looping technology. This research provided an evaluation of chemical looping combustion technology from an eco-
nomic and environmental perspective by comparing it with a reference plant, a CCPP that included no CO2 capture.
Saayaadi and Nejatolahi [22] analyzed cooling tower assisted vapor compression refrigeration machines with respect to total
exergy destruction rate and total product cost objective functions. They used energy and exergy analyses for the thermodynamic
model and incorporated total revenue requirement (TRR) for the economic model. They have optimized the system with respect to
single objective thermodynamic, single objective economic, and multiobjective criteria. For the multiobjective optimization, they
selected final solutions from the Pareto frontier curve. Finally, they compared the results obtained from the three optimizations
and calculated that the percentage deviation from ideal results for thermodynamic and economic criteria is 40.09% for ther-
modynamically optimized system, 82.46% for economically optimized system, and 22.51% for the multiobjective optimized
system and therefore determined that the multiobjective optimization satisfied the generalized engineering criteria more than the
other two single-objective optimized designs. Ahmadi et al. [4] conducted a comprehensive exergy, exergoeconomic, and envir-
onmental impact analysis and a multiobjective optimization for CCPPs with respect to the exergy efficiency, total cost rate, and
CO2 emissions of the overall plant. They determined that the largest exergy destructions occurred in the CCPP combustion
chamber and that increasing the gas turbine inlet air temperatures decreased the CCPP cost of exergy destruction. They derived the
expression for the Pareto optimal point curves for the determined exergy efficiency range and concluded that the increase in total
cost per unit exergy efficiency was considerably high after exergy efficiencies over 57% and therefore a point below this should be
chosen on the Pareto optimal curve.
Sayyaadi and Babaelahi [23] analyzed a liquefied natural gas reliquefaction plant with respect to multiobjective approach,
which simultaneously considered exergy and exergoeconomic objectives. They used MATLAB multiobjective optimization algo-
rithm of NSGA-II, which was based on the genetic algorithm, and obtained Pareto optimal frontier to find the Pareto optimal
solutions. They compared the final optimal system with the base case and found that the exergetic efficiency in the multiobjective
optimum design was 11.11% higher than that of the exergoeconomic optimized system, while the total product cost of the
multiobjective optimal design was 16.7 higher than that of the exergoeconomic optimal system. Ghaebi et al. [8] conducted the
exergoeconomic optimization of a trigeneration system for heating, cooling, and power production purpose based on TRR method
using evolutionary algorithm. The system studied consisted of an air compressor, a combustion chamber, a gas turbine, a dual
pressure heat recovery steam generator (HRSG), and an absorption chiller in order to produce cooling, heating, and power. The
economic model used in their research was the TRR and the cost of the total system product was defined as our objective function
and optimized using a genetic algorithm technique. These studies highlight the importance of exergoeconomics for different
energy systems.
In this chapter, the relations between thermodynamic losses and capital costs are considered and examined for systems and
their constituent devices. For illustration purposes, several case studies from simple to sophisticated are examined, and possible
generalizations in the relation between thermodynamic losses and capital costs are suggested. This chapter provides insights into
the relations between energy and exergy losses and capital costs for electrical generating stations in particular, and for energy
systems in general. These insights can assist in integrating thermodynamics and economics in the analysis and design of energy
systems. This chapter also highlights the merits of second-law analysis over the more conventional first-law analysis. Proponents of
second-law analysis conventionally argue that its use can help improve process performance.
1.8.2 Principles of Exergoeconomics
For the evaluation of a system or a process, some quantities are required to be considered (Fig. 1). These quantities are the flow of
mass, energy, exergy, and cost, which is essential to be examined into, out of, and at all points within a system. Of the mentioned
quantities, only mass and energy are subject to conservation laws. Cost increases or remains constant, while exergy decreases or
remains constant. Balances can be written for each of the above quantities [24].
The cost balance for a whole system expresses that the cost rate associated with the product of the system is equal to the total
rate of expenditures made to generate the product, namely the fuel cost rate and the cost rates associated with CI and operating and
maintenance [1]. In a conventional economic analysis, a cost balance is usually formulated for the overall system operating at
steady-state condition as
C_ P;tot ¼ C_ F;tot þ Z_ tot ð1Þ
where C_ denotes the cost rate, Z_ is the levelized CI cost and operating and maintenance (OM) costs, and the subscripts P,tot and F,
tot denote the total products and the total fuel (and other) inputs [24].
Exergoeconomics 343
Mass Mass
Energy
Energy
Exergy System Exergy
Cost
Cost
Fig. 1 Parameters required to get balanced through a system.
1.8.2.1 Capital Investment Cost

Unlike operating and maintenance cost, which is repetitive, CI cost is a one-time cost. CI is defined as the summation of constant
costs and inconstant costs for a system. The constant costs are related to the capital needed for purchased-equipment cost,
purchased-equipment installation, piping, instrumentation and controls, electrical equipment and materials, land, civil, structural,
and architectural work, service facilities, engineering and supervision, construction costs including contractor’s profit and con-
tingencies. While inconstant costs are related to startup costs, working capital, costs of licensing, research, and development and
allowance for funds used during construction. Estimating the cost of purchased equipment becomes the first step in any detailed
cost estimation. The type of equipment and its size, the range of operation, and the construction materials have been determined
during the flow diagram development. One of the best sources of cost estimation is cost values from past purchase orders,
quotations from experienced professional cost estimators, or calculations using the extensive cost databases often maintained by
engineering companies or company engineering departments. In addition, some commercially available software packages can
assist with cost estimation; however, the quality of cost estimates obtained through software packages may not necessarily be
better than the quality of data received from various estimating charts as discussed next. Generally, the purchase cost of equipment
is affected by its size, design pressure, and temperature and materials of construction [25], which can be expressed by the following
equation:
M
XA
CA ¼ CB ð2Þ
XB
This equation expresses that a purchased equipment cost of item CA at a given size XA is calculated when the purchase cost of
the similar equipment item CB at another given capacity (XB) is known. The variable X is the primary design variable or
combination of variables that characterizes the size of the equipment item. For thermal process equipment, the scaling exponent M
is usually less than unity, expressing the fact that the percentage increase or decrease in equipment cost is smaller than the
percentage increase or decrease in equipment size. In the absence of other cost information, an exponent value of 0.6 may be used.
This approach is known as the six-tenths rule [1]. Further details of this are provided elsewhere [26–29].
Published data are often old, sometimes from different sources, with different approaches. Such data can be made up-to-date
and put on a common basis using cost indexes.
C1 INDEX 1
¼ ð3Þ
C2 INDEX 2
C1 and INDEX1 are equipment cost and cost index related to year 1, respectively, and C2 and INDEX2 are equipment cost and
cost index related to year 2, respectively. Commonly used indices are the Chemical Engineering Indexes (1957–1959 Index ¼100)
and Marshall and Swift (1926 Index ¼ 100), published in Chemical Engineering Magazine and the Nelson–Farrar Cost Indexes for
refinery construction (1946 Index ¼ 100) published in the Oil and Gas Journal. The Chemical Engineering (CE) Indexes are
particularly useful [25].
Therefore, we have considered the purchased-equipment cost component of the constant CI. The remaining direct cost
components may be estimated either through calculations based on detailed flow diagrams and drawings or through a factor
method. The installation cost covers the freight and insurance for the transportation from the factory; the costs for labor,
unloading, handling, foundations, supports; and all other construction expenses related directly to the erection and necessary
connections of the purchased equipment. In general, the installation costs for equipment vary from 20 to 90% of the purchased-
equipment cost. In addition, the cost for piping includes the material and labor costs of all items required to complete the erection
of all the piping used directly in the system. This cost represents 10–70% of the purchased equipment cost. The factor used to
calculate instrumentation and control costs tends to increase as the degree of automation increases, and decrease with increasing
total cost. Factors between 2 and 30% of the purchased-equipment cost have customarily been used. The cost, which includes
materials and installation labor for substations, distribution lines, switch gears, control centers, emergency power supplies, area
lighting, and so forth, is usually 10–15% of the purchased-equipment cost, the average value being about 11%.
The cost of service facilities or auxiliary facilities includes all costs for supplying the general utilities required to operate the
system such as fuel, water, steam, and electricity (assuming that these utilities are not generated in the main process), refrigeration,
inert gas, and sewage. This category also includes the costs of waste disposal, environmental control (e.g., air pollution monitoring
344 Exergoeconomics
and wastewater treatment), fire protection, and the equipment required for shops, first aid, and cafeteria. The total cost of service
facilities may range from 30 to 100% of the purchased-equipment cost.
The above sections summarized the estimation of total investment cost of a plant but time value of money related to capital
expenditures must be considered; this is why we need methods that will enable us to account for the value of money over time.
Capital costs can be expressed on an annual basis if it is assumed that the capital has been borrowed over a fixed period (usually
5–10 years) at a fixed rate of interest, in which case the capital cost can be annualized according to
i ð1 þ iÞn
Z_ CI ¼ ZCI ð4Þ
ð1 þ iÞn 1
In this equation, i is the annual interest rate and n denotes the working number of years [25]. This method also helps to bring
both capital cost and operating and maintenance cost to common basis.
1.8.2.2 Operating and Maintenance Costs

The operating and maintenance costs can be divided into fixed and variable costs. The fixed OM costs are composed of costs for
operating labor, maintenance labor, maintenance materials, overhead, administration and support, distribution and marketing,
research and development, and so forth. The variable operating costs depend on the average annual system capacity factor, which
determines the equivalent average number of hours of system operation per year at full load. The variable operating costs consist
of the costs for operating supplies other than fuel costs (e.g., raw water and limestone), catalysts, chemicals, and disposing of waste
material [1].
1.8.2.2.1 Exergy costing

For a system operating at steady-state work and heat may cross the boundaries of the system as well as mass flow, etc. These
interactions bring about exergy transfer in and out of the system and due to the irreversibilities inside the system the exergy
destruction arises.
Since exergy measures the real thermodynamic value of such effects and pays attention to the quality of the energies and the
costs should only be assigned to such values of interest, it is meaningful to use exergy as a basis for awarding costs in thermal
systems. This approach is called exergy costing, in which we prefer exergy values to energies in cost assessments.
In the evaluation of exergy costs, each stream of matter has its own cost. Therefore, for interactions like entering streams and
exiting streams and work as well as heat transfer we apply the following equations as the associated cost relations:
C_ i ¼ ci E_ i ð5Þ
C_ e ¼ ce E_ e ð6Þ
C_ w ¼ cw W ð7Þ
C_ q ¼ cq E_ q ð8Þ
In the above equations, lowercase c denotes the average costs per unit of exergy in dollars per gigajoule ($/GJ).
In the exergy-based costing method, we should write a cost balance equation for each component separately. As each com-
has
ponent entering and exiting streams along with work and heat interactions with its surroundings, bear in mind the charges due
to CI Z_ K and operating and maintenance expenses Z_ K . Denoting the sum of the last two terms by Z_ k , we might write cost
CI OM
balance as
X X
C_ e;k þ C_ w;k ¼ C_ q;k þ C_ i;k þ Z_ k ð9Þ
e i
This equation simply states that the total cost of the exiting exergy streams equals the total cost to attain them: the cost of the
entering exergy streams plus the capital and other costs. Note that when a component receives power (as in a compressor or a
pump), C_ w;k goes to the right-hand side of the equation. The term C_ q;k would appear with its positive sign on the left side if there is
a heat transfer from the component. Cost balances are generally written so that all terms are positive. In this part, we will try to
write the cost balance equation for some of the major components that we deal with in most of the energy systems:
1.8.2.2.1.1 Turbine
The schematic of a single adiabatic turbine is shown in Fig. 2. The cost balance equation for this turbine can be written as:
C_ e þ C_ w ¼ C_ i þ Z_ ð10Þ
In the above equation, Z_ is the cost of the CI and OM costs of the turbine. Decomposing the above equation with specific cost
and exergy of each stream, we will get:
ce E_ e þ cw W ¼ ci E_ i þ Z_ ð11Þ
where W, E_ i , and E_ e would be known from a prior exergy analysis, and Z_ would be known from a previous economic analysis. Also
Exergoeconomics 345
High pressure
steam
Output power
Low pressure
steam
Fig. 2 The schematic view of a turbine.
Air outlet
Power inlet
Air inlet
Fig. 3 The schematic view of a compressor.
ci could be determined from the analysis of the upstream component of the turbine, which leads us to conclude that we have two
unknowns, and thus we need one supplementary equation (Section 1.8.3.1).
Since the purpose of a turbine is to generate power, all costs associated with the purchase and operation of the turbine should
be charged with the power. Both the exergy rate spent to produce the power and the exergy rate exiting the turbine were supplied to
the working fluid in the components upstream of the turbine at the same average cost per exergy unit, ci. In agreement with
accounting practice, this value would change only if exergy were added to the working fluid during the turbine expansion.
Therefore, the cost per unit of exergy of the working fluid remains constant:
ci ¼ ce
_ are coupled to generate power. Combining the latter
With the help of this auxiliary equation, all costs related to the turbine (Z)
equations, we can obtain the unit product cost for power as
ci ðE_ i E_ e Þ þ Z
cw ¼ ð12Þ
W
1.8.2.2.1.2 Compressors/pumps
The schematic of adiabatic compressors/pumps is shown in Fig. 3. According to this figure, the cost balance equation becomes:
C_ e ¼ C_ i þ C_ w þ Z_ ð13Þ
In the above equation, Z_ is the cost of the CI and OM costs of the compressor/pump. Decomposing the above equation with
specific cost and exergy of each stream, we will obtain:
ce E_ e ¼ ci E_ i þ cw W
_ þ Z_ ð14Þ
_ E,
where W, _ and E_ e would be known from a prior exergy analysis, Z_ would be known from a previous economic analysis. Also ci
could be determined from the analysis of the upstream component of the compressor, which leads us to conclude that we have
two unknowns, and thus we need one supplementary equation (Section 1.8.3.1).
346 Exergoeconomics
Feedwater-3
Effluents-5
Air-2 HP steam-4
Fuel-1
Fig. 4 The schematic view of a boiler.
Since the purpose of a compressor is to supply high-pressure exiting stream, all costs associated with the purchase and
operation of the turbine should be charged with the supply high-pressure exiting stream. So in this component, we do not need
_ and the inlet cost
any auxiliary relations to complete the system of equations. With the help of costs related to the compressor (Z)
equations, the exiting stream unit product cost becomes:
ci E_ i þ cw W þ Z_
ce ¼ ð15Þ
E_ e
1.8.2.2.1.3 Boiler
The next but not the least important element to be discussed here is the boiler, the schematic of which is shown in Fig. 4. For this
case, rewriting the cost balance equation yields:
C_ 4 þ C_ 5 þ C_ q ¼ C_ 1 þ C_ 2 þ C_ 3 þ Z_ ð16Þ
The above equation shows that heat is transferred from boiler and the cost of heat is written on the left-hand side as well as the
effluents and high-pressure steam. Also, it is worth mentioning that costs associated with the stream 5 and heat are regarded as
losses.
Decomposing the above equation with specific cost and exergy of each stream we will obtain:
c4 E_ 4 þ c5 E_ 5 þ cq E_ q ¼ c1 E_ 1 þ c2 E_ 2 þ c3 E_ 3 þ Z_ ð17Þ
E_ i in the above equations would be known from exergy analysis. The known unit product costs (i.e., c1–c3) should be obtained
from the upstream components of the boiler, and that leaves us with the unknowns of c4, c5, and cq. In this case, two supple-
mentary equations would come in handy to complete the system of equations.
Since the purpose of a boiler is steam generation, all costs associated with the purchase and operation of the turbine should be
charged with the steam. In agreement with accounting practice and as mentioned for the turbine, if the value of effluents changes
and goes higher, the fuel rate must increase to cover for it. The same argument can be made for the heat loss from the boiler. Thus,
we should write the auxiliary equations as
c5 ¼ c1
cq ¼ c1
The latter equations express that exergy loss in the boiler is covered with more fuel usage. Also, another result we get from this
equation is that the average unit cost of providing the fuel remains constant with varying heat exergy losses. Substituting the two
latter equations in previous equations and doing some math, the cost per exergy unit of the steam exiting the boiler becomes:

c1 E_ i E_ 5 E_ q þ c2 E_ 2 þ c3 E_ 3 þ Z
c4 ¼ ð18Þ
E_ 4
Also, it is worth mentioning how much cost the exergy loss through heat brings about. It leads us to the following equation in
which Ts is the surface temperature of the boiler at which heat transfer occurs:

_ 1 T0
C_ q ¼ c1 E_ q ¼ c1 Q ð19Þ
Ts
1.8.2.3 Illustrative Example 1 (Simple Cogeneration System)

The schematic diagram of a cogeneration plant to produce steam and power is shown in Fig. 5. As an example in this section, we
want to calculate the unit product cost of the power. For illustration purposes, two different cases with two different inputs are
Exergoeconomics 347
3-Effluents
1-Boiler
2-HP steam
4-LP-Steam
Fig. 5 Schematic view of a cogeneration system.
Table 1 Assumed input values in modeling the turbine and boiler in Case 1
Line Value Unit Line Value Unit
E_ 1 100 MW E_ 2 35 MW
C1 4 $/GJ m_ 2 26.15 kg/s
z_ b 0.3 $/s z_ t 0.02 $/s
E_ 3 5 MW P2 50 bar
C3 0 $/GJ T2 466.1 1C
introduced, and the results for both cases are investigated. For the modeling of this CHP system, the Engineering Equation Solver
(EES) software is used, and some general reasonable assumptions are made as follows:
• The feed water and combustion air are assumed to enter the boiler with negligible exergy and cost;
• The effluents exit the boiler with negligible cost;
• Heat transfer can be ignored;
• The turbine polytropic efficiency is constant at 80% regardless of the turbine exit pressure.
1.8.2.3.1 Modeling
As mentioned earlier, the cost rate balance equation for the turbine and the boiler are as follows, respectively:
c2 E_ 2 þ c3 E_ 3 ¼ c1 E_ 1 þ Z_ b ð20Þ
_ ¼ c2 E_ 2 þ Z_ t
c4 E_ 4 þ cw W ð21Þ
Putting C3 ¼0 and simplifying the latter equations, we will obtain
c1 E_ 1 þ Z_ b
c2 ¼ ð22Þ
E_ 2
Applying the data in Case 1, we get C2 ¼ 20 dollars per gigajoule. Also, we may introduce another useful term called c
2 , which is
defined as
c
2 ¼ c2 e2 ð23Þ
This equation can also be reproduced to calculate c
4 and other terms.
1.8.2.3.1.1 Case 1
Table 1 provides the input data and the relations used in the modeling of the cogeneration systems and the Table 2 shows
thermodynamic and cost data obtained for Case 1 for different back pressures of the turbine.
Fig. 6 shows the exergy costing curve of the cogeneration system. This figure is plotted for different turbine exhaust
pressures, and the y-axis indicates the LP steam unit product cost. This figure illustrates that high-pressure (and high-tem-
perature) steam is valued more per unit of mass than low-pressure (low-temperature) steam. Another important aspect of this
figure is the illustration of exergy costing versus energy costing. In the exergy costing curve, the unit product cost approaches to
zero while the back pressure reduces (which makes great sense), while, in the energy costing curve it does not show such
behavior. For example, at a pressure of 1 bar, the unit cost on an energy basis for steam is close to 2 $/kg even though such
steam has very limited usefulness. This example illustrates once again the significant error that can occur when energy is used as
the basis for costing.
348 Exergoeconomics
Table 2 Thermodynamic and cost data for turbine of the simple cogeneration system in Case 1
P4 (bar) T4 (K) E_ 4 (MW) W_ (kW) Edest;T (kW) z_ t ($/s) Cw ($/GJ/1E þ 06) C 4 (cent/kg/100)
2 401.8 16.18 16,463 2353 0.0329 2.49E 05 0.02174

10 544.9 24.36 9,525 1113 0.0190 2.43E 05 0.02386
20 621.3 28.59 5,789 615.2 0.0115 2.41E 05 0.025
40 708.4 33.34 1,506 145.4 0.0030 2.39E 05 0.02631
50 739.0 34.98 0 0 0.00003 2.38E 05 0.2676
0.03
Energy costing
Unit cost of LP steam ($/kg)
0.025
Exergy costing
0.02
0.015
0.01
0 10 20 30 40 50
Turbine exhaust pressure (bar)
Fig. 6 Indication of suitability of exergy costing over energy costing in Case 1.
Table 3 Assumed input values in modeling the turbine and boiler in Case 2
Line Value Unit Line Value Unit
E_ 1 200 MW E_ 2 110 MW
C1 4 $/GJ m_ 2 30 (kg/s)
z_ b 0.3 $ z_ t 0.02 (W_ /100 MW)
E_ 3 20 MW P2 50 bar
C3 0 $/GJ T2 466.1 1C
Table 4 Thermodynamic and cost data for turbine of the simple cogeneration system in Case 2
P4 (bar) T4 (K) E_ 4 (kW) W_ (kW) Edest;T (kW) z_ t ($/s) Cw ($/GJ/1E þ 06) C 4 (cent/kg/100)
2 401.8 88,415 18,886 2699 0.03777 1.34E 05 0.02947

10 544.9 97,796 10,927 1277 0.02185 1.32E 05 0.0326
20 621.3 102,653 6,641 705.8 0.01328 1.31E 05 0.03422
40 708.4 108,105 1,728 166.8 0.003456 1.3E 05 0.03603
50 739 109,998 0 0 3.17E-06 1.29E 05 0.03667
1.8.2.3.1.2 Case 2
Table 3 provides the input data and the relations used in the modeling of the cogeneration systems and Table 4 shows thermo-
dynamic and cost data obtained for Case 1 for different back pressures of the turbine.
Fig. 7 shows the exergy costing curve of the cogeneration system in Case 2. The same conclusion could be made as for Case 1,
which makes exergy costing a suitable method for conducting economic evaluation.
1.8.2.3.2 Aggregation level for applying exergy costing

The level at which the cost balances are formulated affects the results of a thermoeconomic analysis. It is necessary to avoid using
this approach as much as we can. Sometimes in facing thermal systems, we may not have enough data to formulate each
component. Even in such cases, we should make proper guesses to avoid the aggregation of the systems because it gives a lot of
Exergoeconomics 349
0.05
Energy costing
Exergy costing
0.04
Unit cost of LP steam

0.03
0.02
0.01
0
0 10 20 30 40 50
Turbine exhaust pressure
Fig. 7 Indication of suitability of exergy costing over energy costing in Case 2.
Effluents
E3 = 5 MW
c3 = 0
CC
Water, air and

gas
E1 = 100 MW
c1 = 4 $/GJ
1-Boiler 2-HP steam
Boiler and turbine

G
Zb + Zt = 0.32 $/s
4-LP-Steam
LP-steam, P4 = 9 bar
W =10 MW
E4 = 23.8 MW
Fig. 8 Schematic view of cogeneration plant considering aggregation level.
misleading information. For the sake of illustration, once again we perform economic analysis for the cogeneration system, which
is mentioned in the previous section.
The assumptions and input data are given in Fig. 8. For the formulation of cost balance, we can write
C_ 1 þ ðZ_ t þ Z_ b Þ ¼ C_ 4 þ C_ w ð24Þ
If we decompose the equation using the exergy method, then we can have
c1 E_ 1 þ ðZ_ t þ Z_ b Þ ¼ c4 E_ 4 þ cw W ð25Þ
From the upstream analysis, we know that this equation has two unknowns, which are costs of interest (c4 the unit product cost
of LP-steam and cw the unit product cost of power). Therefore, one supplementary equation is required to complete the system of
equations. In the aggregated system, finding the auxiliary equation is not as crystal clear as for the single components. Therefore,
we should assume that the fuel costs are separated to produce both power and steam, and we may also assume that the unit
product cost of steam is equal to that of the power. Consequently, we can write cw ¼ c4.
350 Exergoeconomics
Combining the two latter equations leads us to:

c1 E_ 1 þ ðZ_ t þ Z_ b Þ
c4 ¼ cw ¼ ð26Þ
E_ 4 þ W
With the aid of input data, we get c4 ¼ cw ¼ 21.3$/GJ, which contradicts with the values obtained before when separate
components are considered. In the previous section, we got c4 ¼ 20 $/GJ and cw ¼ 24.4 $/GJ.
It is noteworthy that when an aggregated system is considered, the unit cost of steam becomes higher because it carries the cost of
the gas turbine associated with OM and fuel costs. Also, the unit product cost of the generated power is smaller because some part of
the cost of the OM and fuel cost in turbine is burdened by the LP steam. From this discussion, it is apparent that the quality of the
results and recommendations from a thermoeconomic analysis depends on the aggregation level at which exergy costing is applied.
1.8.3 Exergy-Based Economic Evaluation
For a system operating at steady-state condition, there may be a number of entering and exiting material streams as well as heat
and work interactions with the surroundings. Since exergy measures the true thermodynamic value of such effects and cost should
only be assigned to commodities of value, it is meaningful to use exergy as a basis for assigning costs in energy systems. Such
“exergy costing” provides a rational basis for assigning costs to the interactions that a thermal system experiences with its
surroundings and to the sources of inefficiencies within it.
In exergy costing, a cost is associated with each exergy stream. Thus, for entering and exiting streams of matter with associated
_ in and Ex
rates of exergy transfer Ex _ out , power W
_ and the exergy transfer rate associated with heat transfer Ex
_ q , respectively, we can
write the following:
C_ in ¼ cin Ex
_ in ð27Þ
C_ out ¼ cout Ex
_ out ð28Þ
C_ w ¼ cw W
_ ð29Þ
C_ q ¼ cq Ex
_ q ð30Þ
1.8.3.1 Cost Balance, Fuel and Product Associated Costs, and Supplementary Equations
Having in mind the definition of fuel exergy and product exergy, we should remember that the purpose of the component plays a
key role in defining the product and fuel exergies. Writing the definitions of fuel and product exergy and balancing it for a
component while replacing E (exergy) with C (cost) we can obtain from Table 5, which demonstrates the cost rates associated with
fuel and product as well as auxiliary thermoeconomic relations for selected components at steady-state operation.
The method in writing the supplementary equations will be achieved by analyzing Table 5 in detail. Focusing on components
involving only one exit stream such as compressor, pump, fan, mixing unit, gasifier, and combustion chamber as noted in the
table, for these components the cost rate balance may be solved for the cost per exergy unit of the exiting stream without the need
for supplementary relations. As a major rule, n-1 supplementary relations are required for components with n exiting exergy
streams. This includes the above cases having one exit stream for which no auxiliary relation is required. Continuing the discussion
of Table 5, consider the case of a turbine with one extraction: therefore, two supplementary relations are required to complete the
cost rate balance as shown in Table 5.
1.8.3.2 Exergoeconomic Evaluation

In order to obtain the cost of all unit exergy streams, the linear system of equations is solved assuming that the cost of unit exergies
associated with the input fuel is an input. The exergoeconomic evaluation of the systems is carried out using the thermoeconomic
variables, namely, the unit cost of the fuel (cF,k), the unit cost of the product (cP,k), the cost rate of exergy destruction (C_ D; k), the
cost rate of exergy loss (C_ L; k), as well as the thermoeconomic factor (fk) and the relative cost difference (rk). These parameters are
calculated using the following relations [1,2]:
C_ F;k
cF;k ¼ ð31Þ
Ex_ F;k
C_ P;k
cP;k ¼ ð32Þ
Ex_ P;k
C_ D;k ¼ cF;k E_ D;k ðE_ P;k is considered to be constantÞ ð33Þ
C_ L;k ¼ cF;k E_ L;k ðE_ P;k is considered to be constantÞ ð34Þ

Table 5 Auxiliary equations and cost rates for some typical components
Component Compressor, pump, or Turbine or expander Heat exchanger Mixing unit Gasifier or combustion Boiler
fan chamber
Diagram 1 Hot stream

1, cold
3,W 3
2, hot 3
W, 3 Mix
2
Cold 1 2
stream
2 4
1
Cost rate of C_ 2 C_ 1 CW C_ 2 C_ 1 C3 C3 ðC_ 6 C_ 5 Þ þ ðC_ 8 C_ 7 Þ
product (C_ P )
Cost rate of fuel CW C_ 1 C_ 2 C_ 3 C_ 3 C_ 4 C_ 2 þ C_ 1 C_ 2 þ C_ 9 ðC_ 1 þ C_ 2 Þ ðC_ 3 þ C_ 4 Þ
ðCF Þ
ðC_ 6 C_ 5 Þ ðC_ 8 C_ 7 Þ
Auxiliary None c2 ¼ c3 ¼ c1 c4 ¼ c3 None None ðE_ 6 E_ 5 Þ
¼ ðE_ 8 E_ 7 Þ
thermoeconomic
relations
Variable calculated c2 c3 c2 c3 c3 c6 or c8
from cost
balance
Note: These definitions assume that the purpose of the heat exchanger is to heat the cold stream T1 T0 . If the purpose of the heat exchanger is to provide coolingT3 r T0 , then exergy is removed from the cold stream, and the following relations should
be used: Cp ¼C4 C3; Cf ¼ C1 C2 and C2 ¼ C1. The variable C4 is calculated from the cost balance.
Diagrams for gasifier and boiler:
Oxidant,1
Fuel, 2 Product, 3
Air, 2 1, coal
3, ash
Exergoeconomics
4 Exhaust
Hot reheat, 8 6 main steam
Cold reheat, 7
351
5 feed water
352 Exergoeconomics
Z_ k;PY
fk ¼ ð35Þ
Z_ k;PY þC_ D;k þ C_ L;k
cp;k cf ;k
rk ¼ ð36Þ
cf ;k
Here, we now try to define these parameters.
1.8.3.2.1 Cost of exergy destruction

Although the cost of exergy destruction is a very important cost that can only be revealed through a thermoeconomic analysis, it is
a hidden one. By considering Ep as constant the cost associated with the exergy destruction is given in Eqs. (7)–(11). By looking
again at Eqs. (7)–(11), we may conclude that because the exergy of the product is fixed, the cost of the exergy destruction in
components must be supplied by the fuel cost. On the other hand, if we assume that Ef is fixed the exergy destruction in the
component causes additional destruction in the product, which yields the additional cost inefficiencies.
1.8.3.2.2 Cost of exergy loss

The same conclusion for exergy destruction can be written for the exergy loss. We should bear in mind that Ep is considered to be
fixed for one component in Eqs. (7)–(34).
1.8.3.2.3 Relative cost difference

The relative cost difference for one component is defined by Eqs. (7)–(14). This variable expresses the relative increase in the
average cost per exergy unit between fuel and product of the component. This is a very useful parameter in optimization purposes
in an iterative loop. For example, if one wishes to optimize a turbine and the cost changes in one iteration, the objective should be
to minimize the relative cost difference.
1.8.3.2.4 Exergoeconomic factor

As mentioned earlier, the cost sources in a component may be grouped in two parts. The first consists of non-exergy-related costs
(CI and operating and maintenance expenses), while the second part consists of exergy destruction and exergy loss. In evaluating
the performance of a component, we want to know the relative significance of each category. This is provided by the exergoe-
conomic factor defined for component k by Eqs. (7)–(35). Looking at this equation, we may conclude that the total cost rate
causing the increase in the unit cost from fuel to product is given by the denominator in Eqs. (7)–(35). Accordingly, the
exergoeconomic factor expresses as a ratio of the contribution of the non-exergy-related cost to the total cost increase.
If this factor for one component is low, it means that cost savings in the entire system might be achieved by improving the
component efficiency (reducing the exergy destruction) even if the CI for this component will increase. If this factor is high, it is
then better to decrease the investment costs of this component at the expense of its exergetic efficiency. Different components have
different types of this factor based on their operation. Typical values of the exergoeconomic factor depend on the component.
1.8.3.2.5 Illustrative example 2 (CGAM Cycle)

The schematic view of CGAM cycle is shown below as a cogeneration plant (Fig. 9). Air enters the compressor at environmental
conditions. After being heated in the preheater, air enters the combustion chamber after passing through the turbine to generate
power. The exhaust gases (stream 5) are used in the air preheater to heat up stream 3. Stream 6, which is the exiting gases of the air
preheater, enters a HRSG to produce hot water for some kind of use such as domestic water.
Following the procedure in the previous sections, we aim to discuss a complete energy and exergy balance for the components
of the system as well as an economic analysis. Furthermore, the results are presented and discussed in detail.
The input parameters used for the modeling of this CHP system are listed below (Table 6).
1.8.3.2.5.1 Energy analysis

Energy balance equations for components of the CGAM cycle are given below:
• Air compressor:
i
1 h gag1
T 2 ¼ T1 1 þ rc a 1 ð37Þ
ZAC
_ AC ¼ m
W _ a :Cp;a ðT2 T1 Þ ð38Þ
Here, Cpa is considered a temperature variable function as follows [10]:

3:8371T 9:4537T 2 5:49031T 3 7:9298T 4
CPa ðTÞ ¼ 1:04841 4 þ 7 10 þ 14 ð39Þ
10 10 10 10
• Air preheater:
_ a ðh3 h2 Þ ¼ m
m _ g ðh5 h6 ÞZAP ð40Þ
Exergoeconomics 353
P9 = 20 bar
7, Exhaust HRSG
8, Cold water Air preheater
inlet
5
6
3
Combustion
chamber
4
2
A.C G.T
G
P = 1.013 bar
T = 298.15K
Fig. 9 Schematic view of the CGAM CHP plant.
Table 6 Input data for the system
Parameter Value
PRac 12
Zis;GT ð%Þ 0.85
Zis;AC ð%Þ 0.85
T4 (K) 1520
T3 (K) 900
Heated water (kg/s) 12
P3
¼ ð1 DPaph Þ ð41Þ
P2
• Combustion chamber:
_ a h3 þ m
m _ f LHV ¼ m
_ g h4 þ ð1 Zcc Þ m
_ f LHV ð42Þ
P4
¼ ð1 DPcc Þ ð43Þ
P3
With the following combustion equation:

lCx1 Hy1 þ ðxO2 O2 þ xN2 N2 þ xH2 O H2 O þ xCO2 CO2 þ xAr ArÞ
-yCO2 CO2 þ yN2 N2 þ yO2 O2 þ yH2 O H2 O þ yNO NO þ yCO CO þ yAr Ar
yCO2 ¼ ðl x1 þ xCO2 yCO Þ
yN2 ¼ xN2 yNO
l y1
yH2 O ¼ xH2 O þ ð44Þ
2
l y1 yCO yNO
y O2 ¼ x O2 l x 1
4 2 2
yAr ¼ xAr
nfuel
l¼
nair
354 Exergoeconomics
• Gas turbine:
8 2 39
< 1g
gg
g
=
p
T5 ¼ T4 1 ZGT 41 5
4
ð45Þ
: p5 ;
_ GT ¼ m
W _ g :Cp;g ðT4 T5 Þ ð46Þ
W _ GT W
_ Net ¼ W _ AC ð47Þ
m _f þm
_g ¼m _a ð48Þ
Here, Cpg is considered temperature-dependent as given below [28]:

6:99703T 2:7129T 2 1:22442T 3
CPg ðTÞ ¼ 0:991615 þ þ ð49Þ
105 107 1010
• Heat recovery steam generator (HRSG):

_ s ðh9 h8 Þ ¼ m
m _ g ðh6 h7 Þ ð50Þ
P0
_ s ðh9 h8p Þ ¼ m
m _ g ðh6 h7p Þ ¼ ð1 DPhrsg Þ ð51Þ
P6
1.8.3.2.6 Exergy analysis

Exergy can be divided into four distinct components. The two important ones are physical exergy and chemical exergy. In this
study, the two other components, which are kinetic exergy and potential exergy, are considered negligible as the elevation and
speed have negligible changes [21]. The physical exergy is defined as the maximum theoretical useful work obtained as a system
interacts with an equilibrium state [21]. The chemical exergy is associated with the departure of the chemical composition of a
system from its chemical equilibrium. The chemical exergy is an important part of exergy in the combustion process. Therefore, the
following exergy balance equation is written:
X X
_ Qþ
Ex m_ i ei ¼ m _ W þ Ex
_ e ee þ Ex _ D ð52Þ
i e
where subscripts e and i are the specific exergy of control volume inlet and outlet flow and ExD is the exergy destruction. Other
terms in this equation are

_ Q ¼ 1 T3 Q
Ex _i ð53Þ
Ti
Ex _
_ W ¼W ð54Þ
ex ph ¼ ðh h3 Þ T 3 ðS S3 Þ ð55Þ
_ Q and Ex
where Ex _ W are the corresponding exergy of heat transfer and work that cross the boundaries of the control volume, T is the
absolute temperature (K), and (1) refers to the ambient conditions, respectively. In Eq. (52), the term Ex is defined as follows:
_ ¼ Ex
Ex _ ch
_ ph þ Ex ð56Þ
where E_ ¼ m
_ e.
The chemical exergy of the mixture is defined as follows [21]:
" #
X
n X
n
exmix ¼
ch
Xi ex þ RT0
chi
Xi LnXi þ GE
ð57Þ
i¼1 i¼1
where GE is the excess free Gibbs energy and is negligible at low pressure in a gas mixture.
For the evaluation of the fuel exergy, the above equation cannot be used. Thus, the corresponding ratio of simplified exergy is
defined as follows:
ξ ¼ ex f =LHV f ð58Þ
Due to the fact that for the most of usual gaseous fuels, the ratio of chemical exergy to the lower heating value is usually close to
1, one may take the values as commonly accepted [21]:
ξCH4 ¼ 1:06
ð59Þ
ξH2 ¼ 0:985
For gaseous fuel with CxHy, the following experimental equation is used to calculate ξ [21]:
y 0:0698
ξ ¼ 1:033 þ 0:0169 ð60Þ
x x
Exergoeconomics 355
25,000
23,308
20,000
Exergy destruction rate (kW)

15,000
10,000
5258
5000 3622
2452
1754
0
Combustion HRSG Gas turbine Air compressor Air preheater
chamber
Fig. 10 Exergy destruction rate in system components for CGAM cycle.
Here, for the exergy analysis of the plant, the exergy of each line is calculated at all states and the changes in the exergy are
determined for each major component. The source of exergy destruction (or irreversibility) in the combustion chamber is mainly
combustion (chemical reaction) and thermal losses in the flow path, respectively. However, the exergy destruction in the heat
exchanger of the system, i.e., HRSG, is due to the large temperature difference between the hot and cold fluids. The exergy destruction
rate and the exergy destruction rate for each component for the whole system in the CHP plant (Fig. 9) are shown in Fig. 10.
In a world with finite natural resources and increasing energy demand, it becomes increasingly important to recognize the
mechanisms that degrade energy and resources and to develop systematic approaches for improving the design of energy systems and
reducing the impact on the environment. The second law of thermodynamics combined with economics represents a very powerful
tool for the systematic study and optimization of energy systems. This combination forms the basis of the relatively new field of
thermoeconomics (exergoeconomics). Moreover, the economic model takes into account the cost of the components including the
amortization and maintenance and the cost of fuel combustion. In order to define a cost function, which depends on optimization
parameters of interest, component cost should be expressed as function of thermodynamic design parameters [21]. On the other
hand, exergy costing involved in cost balance is usually formulated for each component separately. A cost balance applied to the kth
system components shows that the sum of cost rates associated with all existing exergy stream equals the sum of cost rates of all
entering exergy streams plus the appropriate charges due to CI and operating and maintenance expenses. The sum of the last two
terms is denoted by Z_ k . Accordingly, for a component that receives heat transfer and generates power, one can write [21]:
For each flow line in the system, a parameter called flow cost rate C ($ s1) was defined and the cost balance equation of each
component in the following form is used:
X X
C_ e;k þ C_ w;k ¼ C_ q;k þ C_ i;k þ Z_ k ð61Þ
e i
The cost balances are generally written in such ways that all terms are positive. Using Eq. (61), one can write [21]:
X X
ce E_ e k þ cw;k W
_ k ¼ cq;k E_ q;k þ ci E_ i k þ Z_ k ð62Þ
C_ j ¼ cj Ej ð63Þ
The cost balance equations for all components of the system construct a set of nonlinear algebraic equations, which was solved
for Cj and cj. In this analysis, it is worth mentioning that the fuel and product exergy should be defined. The exergy product is
defined according to the components under consideration. The fuel represents the source that is consumed in generating the
product. Both the product and fuel are expressed in terms of exergy. The cost rates associated with the fuel (C_ F ) and product (C_ P )
of a components are obtained by replacing the exergy rates ðEÞ._ For example, in a turbine, fuel is the difference between input and
output exergy and product is the generated power of the turbine.
In the cost balance formulation (Eqs. (7)–(61)), there is no cost term directly associated with exergy destruction of each
component. Accordingly, the cost associated with the exergy destruction in a component or process is a hidden cost. Thus, if one
combines the exergy balance and exergoeconomics balance together, one can obtain the following equations:
E_ F;K ¼ E_ P;K þ E_ D;K ð64Þ
Accordingly, the expression for the cost of exergy destruction becomes
C_ D;K ¼ cF;k E_ D;K ð65Þ
356 Exergoeconomics
More details of the exergoeconomic analysis, cost balance equations, and exergoeconomic factors are extensively discussed in
Ref. [21].
C_ D;K ¼ cF;k E_ D;K ð66Þ

Further details on exergoeconomic analysis, cost balance equations and exergoeconomic factors are completely discussed in
Ref. [21]. In addition, several methods suggest the purchase cost of equipment in terms of design parameters in Eq. (61) [21].
However, we have used the cost functions as suggested by Ahmadi et al. [21]. Nevertheless, some modifications have been made to
tailor these results to the regional conditions, taking into account the inflation rate. For converting the CI into cost per time unit,
one may write:
f
Z_ k ¼ Zk :CRF: ð67Þ
ðN 3600Þ
where Zk is the purchase cost of kth component in dollars. The expression for each component of the gas turbine plant and
economic model is presented in Table 9. The capital recovery factor (CRF) depends on the interest rate as well as estimated
equipment lifetime. CRF is determined using the following relation [21] (Table 7):
ið1 þ iÞn
CRF ¼ ð68Þ
ð1 þ iÞn 1
Here, i is the interest rate and n is the total operating period of the system in years. N is the annual number of the operation hours
of the unit, and j (1.06) [1,39] is the maintenance factor. Finally, in order to determine the cost of exergy destruction of each
component, the value of exergy destruction, ExD,k, is computed using the exergy balance equation in the previous section.
1.8.3.2.7 Results
Solving the linear system of equations presented in previous section, thermodynamic properties will come in handy as presented
in Table 8. Note that the highest exergy unit cost is achieved at stream 2 exiting the air compressor where all exergy available at the
exit is supplied by mechanical power, which is the most expensive fuel in the system. Also note that the cost per exergy unit is
considerably higher for steam (stream 9) than for the net power produced by GT presented in Table 9.
Table 9 shows the exergoeconomic analysis results for the CGAM CHP system. The last column of this table is the exergoe-
conomic factor; a low value of this factor calculated for a major component suggests that cost saving in the entire system might be
achieved by improving the component efficiency (reducing exergy destruction) even if the CI for the component will increase.
However, the exergoeconomic factor is not sufficient to explain if a component has to be modified or not. For instance, even if a
Table 7 Cost functions in terms of thermodynamic parameters for the system components [1,21]
System component Capital or investment cost functions

m_ a
AC ΖAC ¼ c12c11Z p2 p2
p1 ln p1
AC

_
CC ΖCC ¼ c12 mpa4 ½1 þ EXPðC23 T4 C24 Þ
c22 p

3
c m _
T ΖT ¼ c3231Zg in pp45 ½1 þ EXPðc33 T4 c34 Þ
T
0:6
m_ g ðh5 h6 Þ
APH ΖAPH ¼ c41 ðU ÞðDTLM ÞEV

0:8 0:8 0:8
Q_ PH Q_ EV Q_ SH
þ a42 m_ s þ a43 m_ g
1:2
HRSG ΖHRSG ¼ a41 ðDTLM ÞPH þ ðDTLM ÞEV þ ðDTLM ÞSH
Table 8 Thermodynamic properties and economic parameters of CGAM CHP cycle
Stream no T (K) P (bar) mi (kg/s) E_ i (kW) C : i ($h1) ci ($GJ1)
1 298.2 1.013 93.13 0 0 0

2 648 12.16 93.13 31,655 3223 28.28
3 900 11.55 93.13 47,202 4482 26.38
4 1520 10.97 94.7 104,785 5949 15.77
5 981.7 1.099 94.7 37,056 2104 15.77
6 747.9 1.066 94.7 19,754 1122 15.77
7 440.7 1.013 94.7 3,562 202.2 15.77
8 298.2 20 12 52.81 0 0
9 485.6 20 12 10,987 1168 27.9
10 298.2 12 1.563 80,891 1398 4.801
Exergoeconomics 357
Table 9 Exergoeconomic results for CGAM CHP cycle
Components E_ f (kW) cF,k ($ GJ1) cP,k ($ GJ1) C_ D;k ($ h1) Z_ k ($ h1) C_ D;k þ Z_ k ($ h1) r fk (%)
Air compressor 34,107 19.76 28.28 174.5 796.3 970.8 43.11 82.03
Air preheater 17,301 15.77 22.5 99.57 277 376.57 42.65 73.56
Combustion chamber 128,093 12.75 15.77 1070 69.46 1139.46 23.69 6.096
Gas turbine 67,730 15.77 19.76 205.7 715.1 920.8 25.3 77.66
HRSG 16,192 15.77 29.67 298.5 248.4 546.9 88.1 45.42
component has too low value of exergoeconomic factor (suggesting therefore its substitution with a component of higher
performance and higher cost), if the same component elaborates a quantity of fuel that is negligible (and so has a low value of the
so-called exergetic factor), it is not worth at all to substitute this component with a better one, as its “exergy role” on the system is
only negligible. The most critical components to discuss are the components elaborating a large amount of inlet fuel (which have a
high value of exergetic factor); only in this case, it is interesting to analyze the values of their exergoeconomic factor. Referring to
the first column of Table 9, it can be noted that for the CGAM system, among the components having higher inlet exergy
(combustion chamber and gas turbine, respectively), the air compressor and the combustion chamber have the highest (82.03%)
and lowest (6.096%) exergoeconomic factors, respectively. Therefore, while engineers should focus on reducing the investment
and operation costs of the air compressor, they are to reduce the costs associated with exergy destruction for the combustion
chamber.
The second law analysis evaluates the irreversibilities within the cycle’s components and assesses the contribution of each
component on the total exergy destruction. The exergy destruction rate for CGAM cycle under the conditions of Table 6 is
illustrated in Fig. 10. Referring to this figure, the highest exergy destruction occurs in the combustion chamber due to the three
sources of irreversibility, i.e., chemical reaction, mixing, and temperature difference exist, while in heat exchangers the irreversi-
bility due to the temperature difference is high enough to put HRSG in the second rank.
1.8.4 Case Studies
In order to better understand the application of exergoeconomics, two case studies are considered and both exergy and exer-
goeconomic analyses have been conducted.
1.8.4.1 Solar Based Energy System

One potential renewable energy source is electromagnetic radiation coming from the sun. In this section, we model a solar based
integrated system for electricity generation, heating in winter, and cooling in summer. Fig. 11 shows a schematic view of a solar-
based CCHP system, which is investigated in summer and winter modes. For stable operation of the CCHP system, a thermal
storage tank is installed to balance the mismatch between the supply of the solar energy and the thermal demand of the system. An
auxiliary boiler is also applied when the desired temperature drops at night. In summer, superheated vapor produced by the solar
thermal collectors and auxiliary boiler generates electrical power through expansion process in the turbine connected to the electric
generator. The extracted vapor stream of the turbine enters an ejector supersonic nozzle and is mixed with the outlet stream of
evaporator 1 after causing a cooling effect. The turbine and mixer 1 outlet streams discharge to the condenser, which rejects heat to
cooling water. The saturated liquid is then pumped into the economizer, evaporator 2, and superheater, sequentially, to complete
the cycle. In winter, the extracted flow of the turbine enters the heater to supply the heat. The heater and condenser outlet streams
are mixed in mixer 2 and then pumped into the economizer to absorb the heat from solar collector. The auxiliary boiler utilizes
natural gas and the working fluid of the organic Rankine cycle is R123.
For thermodynamic modeling of the system, the input data used are listed in Table 10 for summer and winter modes.
1.8.4.1.1 Thermodynamic analysis

In the thermodynamic analysis, each component in the system can be treated as a control volume. Energy rate balances and related
expressions for each component of the system follow:
Turbine:
_ Turb ¼ m
W _ 1 h1 ðm
_ 2 h2 þ m
_ 3 h3 Þ ð69Þ
W _ Turb
Zis;Turb ¼ ð70Þ
_
W is;Turb
Evaporator 1:
_ CL ¼ m
Q _ 8 ðh9 h8 Þ ð71Þ
358 Exergoeconomics
Auxiliary
boiler
25 19 1 Electrical
generator
Electricity
Turbine
23 Super
heater 2
Solar 20 14
3
collector
9
Storage Evaporator 2 29
Ejector
Heater Evaporator 1
21 13 28 4
18 27
Mixer 1
24 Economizer Mixer 2 26
5
11 16
15 Condenser
8
17 6 7
22 12 10
Valve 2 Valve 3
Pump 2 Pump 1
Fig. 11 A schematic diagram of a solar-based combined cooling, heating, and power (CCHP).
Table 10 Input data for the system
Parameter Summer Winter
Turbine inlet pressure (kPa) 1000 1000

Turbine inlet temperature (1C) 130 130
Turbine back pressure (kPa) 300 300
Cooling load (kW) 4.5 –
Heating load (kW) – 11
Electrical power generated (kW) 2.7 2.7
Turbine isentropic efficiency 0.85 0.85
Evaporator temperature (1C) 5 –
Pump isentropic efficiency 0.7 0.7
Cooling water inlet pressure (kPa) 300 300
Heater temperature difference (1C) – 20
Heater outlet temperature (1C) – 80
Monthly average insolation, H (MJ/m2 day) 28.5 (July) 7.99 (December)
Tilt angle of the solar collector (1) 37.4 37.4
Evaporator 2:
m _ 20 ðh20 h21 Þ
_ 13 ðh14 h13 Þ ¼ m ð72Þ
Pump 1:
_ p1 ¼ m
W _ 10 n10 ðP17 P10 Þ=Zis;p1 ð73Þ
Pump 2:
_ p2 ¼ m
W _ 11 n11 ðP12 P11 Þ=Zis;p2 ð74Þ
Heater:
_ HL ¼ m
Q _ 2 ðh2 h18 Þ ð75Þ
Economizer:
m _ 21 ðh21 h22 Þ
_ 12 ðh13 h12 Þ ¼ m ð76Þ
Superheater:
_ 14 ðh1 h14 Þ ¼ m
m _ 19 ðh19 h20 Þ ð77Þ
Condenser:
_ 5 ðh5 h6 Þ ¼ m
m _ 15 ðh16 h15 Þ ð78Þ
Exergoeconomics 359
Storage Tank:
_ 25 cp ðT25 T24 Þ ¼ m
m _ L;ST
_ 22 cp ðT23 T22 Þ þ Q ð79Þ
Auxiliary Boiler:
_ f LHV f ZAB ¼ m
m _ 23 cp ðT19 T23 Þ ð80Þ
The entrainment ratio m can be expressed as
_9
m
m¼ ð81Þ
_2
m
_ u is calculated from the heat balance in the solar collector [30]:
The useful heat gained by solar collector Q
_ u ¼ ZColl AColl Gt
Q ð82Þ
where ZColl is defined as the ratio of the useful heat gain to the incident solar radiation and Gt is the instantaneous radiation.
Details of the instantaneous radiation calculations can be found in Ref. [30].
Overall system:
_ elec þ Q
W _ CL
ZCCHP;sum ¼ ð83Þ
_uþQ
Q _ AB
_ elec þ Q
W _ HL
ZCCHP;win ¼ ð84Þ
_ _
Qu þ QAB
The exergy destruction rates for each component of the system are obtained by defining fuel and product of the component
through the second law of thermodynamics and are shown in Table 11.
1.8.4.1.2 Exergoeconomic analysis

Exergoeconomics is an exergy-aided cost analysis method. In this method, a cost rate balance is applied in which the sum of cost
rates associated with all exiting exergy streams is equal to the sum of cost rates of all entering exergy streams plus the CI (ZCI ) and
operating and maintenance expenses (Z_ ). Cost rate balances for each component of the system are listed in Table 11 along with
OM
auxiliary equations, and expressions for the capital cost (Z CI ) of components are provided in Tables 12 and 13.
Table 11 Fuel and product for exergy analysis of the system
Component Fuel Product
Turbine Ex _ 2 Ex
_ 1 Ex _ 3 W_ turb
Ejector _ 2 þ Ex
Ex _ 9 _ 4
Ex
Evaporator 1 _ 8 Ex
Ex _ 9 _ 27 Ex
Ex _ 26
Pump 1 W_ pump1 Ex _ 10
_ 17 Ex
Economizer _ 21 Ex
Ex _ 22 _ 12
_Ex13 Ex
Heater _ 2 Ex
Ex _ 18 _ 29 Ex
Ex _ 28
Superheater _ 19 Ex
Ex _ 20 _ 1 Ex
Ex _ 14
Condenser _ 5 Ex
Ex _ 6 _ 16 Ex
Ex _ 15
Auxiliary boiler _ NG
Ex Ex _ 23
_ 19 Ex
Storage tank _ 25 Ex
Ex _ 24 _ 23 Ex
Ex _ 22
Solar collector _
Ex _ 25 Ex
Ex _ 24
S
Table 12 Cost rate balances and auxiliary equations for components
Component Cost rate balance Auxiliary equation
Turbine C_ 1 þ Z_ turb ¼ C_ 2 þ C_ 3 þ C_ w ;turb c1 ¼ c2 ¼ c3

Ejector C_ 2 þ C_ 9 þ Z_ ejc ¼ C_ 4 _
Evaporator 1 C_ 7 þ C_ 26 þ Z_ eva1 ¼ C_ 9 þ C_ 27 c8 ¼ c9
Pump 1 C_ 10 þ C_ w ;pump1 þ Z_ pump1 ¼ C_ 17 _
Heater C_ 2 þ C_ 28 þ Z_ H ¼ C_ 18 þ C_ 29 c2 ¼ c18
Economizer C_ 12 þ C_ 21 þ Z_ eco ¼ C_ 13 þ C_ 22 c21 ¼ c22
Superheater C_ 14 þ C_ 19 þ Z_ SH ¼ C_ 1 þ C_ 20 c19 ¼ c20
Condenser C_ 5 þ C_ 15 þ Z_ cond ¼ C_ 6 þ C_ 16 c5 ¼ c6
Auxiliary boiler C_ 23 þ C_ NG þ Z_ AB ¼ C_ 19 –
Storage tank C_ 22 þ C_ 25 þ Z_ ST ¼ C_ 23 þ C_ 24 þ C_ L;ST c23 ¼ c24
Solar collector C_ þ C_ s þ Z_ ¼ C_
24 coll 25 cs ¼ 0
360 Exergoeconomics
Table 13 Capital cost expressions for system components [31,33–35]
Component Capital cost

h i2
Turbine log10 ðZTurb
CI
Þ ¼ 2:6259 þ 1:4398log10 ðW_ Turb Þ 0:1776 log10 W_ Turb
Z CI ¼ 60W_
Electric generator 0:95
Elec Elec
¼ 3540W_ pump
CI 0:71
Pump Zpump
0:78
AHE
Heat exchanger CI
ZHE ¼ 130 0:093
Condenser CI
ZCond _5
¼ 1773m
Storage tank CI
ZST ¼ 4042VST
0:506
14
13.09
12
9.87
10
1.834
2
0.97
0.47
0
Solar collector Auxiliary boiler Economizer Ejector Other
components
Fig. 12 Exergy destruction rates of components of the solar-based combined cooling, heating, and power (CCHP) in summer.
The investment cost rate for the components are calculated as [31,32]
Z_ k ¼ ZkCI CRF f=t ð85Þ
where t is the number of hours per year, f is the maintenance factor, i is the interest rate, and N is the component lifetime. Values
for these are assumed to be 7446 h, 1.06, 10%, and 20 years, respectively. Also,
ið1 þ iÞN
CRF ¼ ð86Þ
ð1 þ iÞN 1
In this section, the results of energy and exergy assessments of the solar based CCHP system are presented. The energy and
exergy efficiencies of the system are respectively 24.4 and 9.8% in summer and 48.9 and 11.7% in winter. Component exergy
destruction rates are shown in Figs. 12 and 13, on seasonal bases:
• Summer: Fig. 12 illustrates that in summer the solar collector and auxiliary boiler are the major sources of exergy destruction,
with the solar collector accounting for 13.09 kW of the exergy destruction rate (44.1% of total exergy input rate), and the
auxiliary boiler accounting for 9.87 kW of the exergy destruction rate (33.3% of total exergy input rate). The exergy destruction
rates of all remaining components are significantly lower.
• Winter: Fig. 13 illustrates that in winter the auxiliary boiler and solar collector are again the main sources of exergy destruction.
The auxiliary boiler is responsible for 15.04 kW of the exergy destruction rate (49.7% of total exergy input rate) and the solar
collector for 8.25 kW of the exergy destruction rate (27.2% of total exergy input rate). Again, all other components exhibit
much lower exergy destruction rates.
In the solar collector, the irreversibility is due to the large temperature difference between solar heat and the fluid in the
tubes. In the auxiliary boiler, the irreversibility is caused by the combustion process within, which is typically a major
Exergoeconomics 361
16
15.04
14
12

10
8.247
8
2 1.48
1.14
0.7185
0
Auxiliary Solar Economizer Heater Other
boiler collector components
Fig. 13 Exergy destruction rates of components of the solar-based combined cooling, heating, and power (CCHP) in winter.
Table 14 Exergoeconomic parameters of solar based CCHP system in summer
Component C_ D ($/year) C_ L ($/year) Z_ ($/year) Z_ þ C_ D þ C_ L ($/year)
Auxiliary boiler 1676.69 0 42.11 1718.80

Solar collector 0 0 1110.56 1110.56
Condenser 478.48 0 50.74 529.22
Economizer 585.97 0 87.84 673.81
Ejector 402.35 0 0 402.35
Evaporator 1 148.93 0 272.88 421.81
Evaporator 2 458.91 0 214.50 673.41
Pump 1 28.12 0 139.93 168.05
Superheater 59.37 0 55.68 115.05
Electric generator 151.61 0 19.19 170.80
Storage tank 158.42 0.20 528.34 686.96
Turbine 372.06 0 226.61 598.67
source of irreversibility in a process [36]. Since high destruction rates are observed in both summer and winter for the
solar collector and auxiliary boiler, careful design and selection of these components is important in designing a solar CCHP
system.
The exergoeconomic analysis of the solar CCHP cycle is conducted based on the first and second the laws of thermo-
dynamics using the SPECO method [37]. With the equations in Tables 14 and 15, exergoeconomic parameters of the CCHP
system are calculated for summer and winter. The results demonstrate that the CCHP product cost rate is 5114.5 $/year in
summer and 5688.1 $/year in winter. According to exergoeconomic evaluation guidelines, in designing a new system, more
attention must be paid to the components for which the sum Ż þ ĊD þ ĊL is highest. In summer, Table 14 shows that the
auxiliary boiler, solar collector, and storage tank have the highest values of Ż þ ĊD ĊL and are, therefore, the most
important components from an exergoeconomic point of view. In winter, Table 15 demonstrates that the auxiliary boiler, solar
collector, and evaporator 2 have the highest values of Ż þ ĊD þ ĊL and are, therefore, the most important components
exergoeconomically.
1.8.4.2 Fuel Cell Based Combined Heat and Power System

Schematic view of the proposed CHP system based on the biomass gasifier and the SOFC coupled with a HRSG is proposed
and demonstrated in Fig. 14. The system uses syngas from biomass gasification to fuel the SOFC after which the combustion
gases provide the required energy to produce heating (by the HRSG). The environmental air along with the biomass is brought
to the gasifier where the gasification process occurs and the syngas is produced. The syngas as the fuel (stream 3) is compressed
362 Exergoeconomics
Table 15 Exergoeconomic parameters of solar based CCHP system in winter
Component C_ D ($/year) C_ L ($/year) Z_ ($/year) Z_ þ C_ D þ C_ L ($/year)
Auxiliary boiler 2244.70 0 55.78 2300.48

Solar collector 0 0 1110.56 1110.56
Condenser 345.52 0 19.72 365.24
Heater 335.07 0 89.34 424.41
Pump 1 3.75 0 30.05 33.80
Pump 2 14.21 0 121.99 136.20
Economizer 648.96 0 84.20 733.16
Evaporator 2 556.22 0 214.18 770.40
Electric generator 176.46 0 19.19 195.65
Superheater 71.92 0 55.59 127.51
Storage tank 107.97 0.32 528.34 636.31
Turbine 431.03 0 226.05 657.08
31 32
Air 14 15
2 1 Biomass
HRSG
Gasifier
20
4 5 19
Anode 18
3 14
After burner
Syngas
Power inlet Electrolyte DC/AC

inverter
Fuel compressor AHEX Biomass

10 11
7 8 9 Cathode Combustion products
12 Air and ideal gas mixtures
Power inlet 13
13
12
Air compressor
13
6
Fig. 14 Schematic diagram of the CHP plant consisting of gasifier-SOFC and HRSG.
by the fuel compressor and after mixing with anode recycled gas enters the anode side of the SOFC (stream 5). From the other
side, the environmental air is compressed in the air compressor (stream 7) and then is heated by passing through the AHEX
and enters the cathode side of the SOFC, after being mixed with cathode recycled gas. The anode side gas stream experiences
the internal reforming process, which generates hydrogen-rich products participating in the electrochemical reaction inside the
fuel cell stack. After the electrochemical reaction is accomplished in the SOFC stack, the excess air exiting the cathode side
(stream 11) and the nonreacted fuel exiting from the anode side (stream 19) combust completely in the afterburner to
produce high-temperature combustion gas (stream 13). The exhaust gas from the afterburner is used to preheat the air
entering the mixer. The exhaust stream from the AHEX (state 14) is still hot enough to be put into use in the HRSG (to produce
hot steam).
Some assumptions are made in modeling the system, which are gathered and summarized in Table 16.
1.8.4.2.1 Energy analysis

In this part, the energy balance equations for the major components of the system (the gasifier, SOFC stack, and HRSG) are
proposed. Energy balance for other system components can be found via the below equation:
X X
_i¼
m _ e ðmass balanceÞ
m ð87Þ
X X
_ i hi
m _ W
_ e he þ Q
m _ ¼ 0 ðenergy balanceÞ ð88Þ
Exergoeconomics 363
Table 16 The input data used for modeling the system [18]
SOFC system
Temperature difference between stack inlet and outlet 100K
Fuel utilization factor 0.85
Active surface area 0.01 m2
Baseline current density 6000 A/m2
DC-AC inverter efficiency 97%
Base inlet temperature to SOFC 1000K
Exchange current density of anode 6500 A/m2
Exchange current density of cathode 2500 A/m2
Effective gaseous diffusivity through anode 0.2 104 m2/s
Effective gaseous diffusivity through cathode 0.05 104 m2/s
Thickness of anode 0.05 102 m
Thickness of cathode 0.005 102 m
Thickness of electrolyte 0.001 102 m
Thickness of interconnect 0.3 102 m
Fuel compressor isentropic efficiency 85%
Air compressor isentropic efficiency 85%
Pump isentropic efficiency 85%
Number of cells 11,000
Afterburner combustion efficiency 99%
Stack pressure drop 2%
Heat exchangers pressure drop 3%
Afterburner pressure drop 5%
Gasifier
Gasification temperature 875K
Heat loss from gasifier 0%
Air inlet temperature 298K
Biomass inlet temperature 298K
HRSG
Steam pressure 20 bar
1.8.4.2.2 Gasifier
Assuming an adiabatic gasification at a given temperature, the energy balance equation, as indicated below, is solved to find the
air/fuel ratio [38]:
0 0
0 0 0
hf biomas þ w hf H2 0 ¼ n1 hf H2 þ DhH2 þ n2 hf CO þ DhCO þ n3 hf CO2 þ DhCO2
0 0 0
þn4 hf H2 O þ DhH2 O þ n5 hf Ch4 þ DhCh4 þ n6 hf N2 þ DhN2 ð89Þ
1.8.4.2.3 Fuel cell

The energy balance equation for the SOFC stack can be written as [18]
X X X X
W_ FC;stack ¼ n_ k;5 hk;5 þ n_ L;9 hL;9 n_ m;18 hm;18 n_ n;10 hn;10 ð90Þ
k L m n
where k, L, m, and n are the corresponding gas compositions in each state (e.g., gas composition at state 14 (L) is CO2, CO, H2O,
CH4, N2, and H2).
1.8.4.2.4 Heat recovery steam generator
X 0 X 0
nj hfj þ Dh þ nwater;in hwater; in ¼ nj hfj þ Dh þ nwater; out hwater;out ð91Þ
exhaust gas;in exhaust gas; out
j j
1.8.4.2.5 Overall system efficiencies

For the power generation system consisting of the gasifier and SOFC units (without including HRSG) as well as the CHP system,
the electrical efficiency and the second law efficiency, as a criterion based on the first/second law perspective, can be defined as [3]:
W _ FC W
_ FC;stack;ac W _ AC
ZI;P ¼ ð92Þ
m_ biomass LHVbiomass
364 Exergoeconomics
W _ FC W
_ FC;stack;ac W _ AC W _ Heating
_ pump þ Q
ZI;CHP ¼ ð93Þ
_ biomass LHV biomass
m
W _ FC W
_ FC;stack;ac W _ AC W
_ pump
ZII;P ¼ ð94Þ
_Ein
W _ FC W
_ FC;stack;ac W _ AC W
_ pump þ ðE_ 24 E_ 23 Þ
ZII;CHP ¼ ð95Þ
_Ein

Using the principles mentioned earlier, the cost evaluation may be performed for the CHP system. Only the missing parts and
supplementary equations are gathered here for the sake of brevity. Table 17 summarizes the supplementary equations and cost
equations used in the modeling.
1.8.4.2.6.1 Results and discussion

Table 18 shows the exergoeconomic analysis results for the CHP system. The last column of this table is the exergoeconomic factor;
a low value of this factor calculated for a major component suggests that cost saving in the entire system might be achieved by
improving the component efficiency (reducing exergy destruction) even if the CI for the component will increase. However, the
exergoeconomic factor is not sufficient to explain if a component has to be modified or not. For instance, even if a component has
too low a value of exergoeconomic factor (suggesting therefore its substitution with a component of higher performance and
higher cost), if the same component elaborates a quantity of fuel that is negligible (and so it has a low value of the so-called
exergetic factor), it is not worth at all to substitute this component with a better one, as its “exergy role” on the system is only
Table 17 Input dataa and cost and auxiliary equations for each component [19,20]
Auxiliary equations Cost equations Component

067
c biomass ¼ 2 Zgasifier ¼ 1600 m_ drybiomass ðkg=hÞ Gasifier

C_ 18 =E_ 18 ¼ C_ 33 =E_ 33 ZSOFC ¼ Aa NFC 2 96 TFC;e 1907 SOFC stack
C_ =E_ ¼ C_ =E_
10 10 33 33
4608m_ 11
Afterburner
– ZAB ¼ 1 þ e 0018T13 264
ð0955ðP13 =P11 ÞÞ
067
Air compressor
c6 ¼ 0 ZAC ¼ 91; 562 W_ AC =455
067
Fuel compressor
c3 ¼ cF ZFC ¼ 91; 562 W_ FC =455
071 Pump
c38 ¼ 0 ZP1 ¼ 3 422 W_ P =1 1 41 fn
fn ¼ 1 þ ð0 2=ð1 ZP ÞÞ
C_ 13 =E_ 13 ¼ C_ 14 =E_ 14 ZAHX ¼ 3 130 ðAAHX =0 093Þ078 08 AHX
C_ =E_ ¼ C_ =E_ HRSG
08
38 38 39 39 ZHRSG ¼ 6570 Q_ eco =DTeco þ Q_ eva =DTeva
12
þ21; 276 m_ steam þ 1184 4 m_ gas
07
Inverter
– Zinv ¼ 100; 000 W_ SOFC;DC =500
a
ir ¼ 0.12, n ¼20 years, cF ¼ 2$/GJ (biomass).
Table 18 Exergoeconomic results for CHP system
Components E_ f (kW) cF,k ($GJ1) cP,k ($GJ1) C_ D;k ($h1) C_ L;k ($h1) Z_ k ($h1) C_ D;k þ C_ L;k þ Z_ k ($h1) fk (%)
SOFC stack 2031 11.49 12.99 1.321 0 9.43 10.75 87.72

Air heat exch. 665.2 14.09 21.67 11.34 0 0.6489 12.24 5.82
Air blower 28.74 15.76 25.65 0.309 0 0.5201 0.8291 62.73
Fuel blower 72.34 15.76 60.45 2.098 0 0.9652 3.063 31.51
Afterburner 990.8 12.99 14.09 2.825 0 0.8893 3.714 23.94
Gasifier 1081 2 3.264 1.7 0 2.177 3.887 56.14
HRSG 186 14.09 22.02 2.594 4.019 1.254 7.867 15.94
Pump 0.380 15.76 42.1 0.005399 0 0.02163 0.02703 80.03
J ¼ 5000 (A/m2), Uf ¼ 0.85, DTstack ¼ 100.

Exergoeconomics 365
250
215.10
189.00
200
Exergy destruction rate (kW) 150
100
60.07
47.59
45.10
38.71
50
14.91
13.44
5.29
0.92
0
AHEX Gasifier AB Exerry HRSG SOFC FC A-mix AC C-mix
loss stack
Fig. 15 Exergy destruction rate for system components.
negligible. The most critical components to discuss are the components elaborating a large amount of inlet fuel (and thus have a
high value of exergetic factor): only in this case, it is interesting to analyze the values of their exergoeconomic factor. Referring to
the first column of table, it can be noted that for the CHP system, among the components having higher inlet exergy (SOFC stack,
gasifier, afterburner, and AHX, respectively) the SOFC stack and AHX have the highest (87.72%) and lowest (5.82%) exergoe-
conomic factors, respectively. Therefore, while engineers should focus on reducing the investment and operation costs of SOFC
stack, on the other hand, they are to reduce the costs associated with exergy destruction for the AHX.
The second law analysis evaluates the irreversibilities within the cycle’s components and assesses the contribution of each
component on the total exergy destruction. The exergy destruction for each component and the total exergy loss for the proposed
CHP system are shown in Fig. 15. Referring to this figure, the highest and the second highest exergy destruction occur in the air
heat exchanger and the gasifier, respectively. In the gasifier, three sources of irreversibility (i.e., chemical reaction, mixing, and
temperature difference) exist, while in AHEX the irreversibility due to the temperature difference is high enough to put it in the first
rank. Fig. 15 also indicates that the total exergy loss is comparable to the exergy destruction in the afterburner.
1.8.4.3 Organic Rankine Cycle Integrated System With Geothermal Energy

As another useful example, the schematic diagram of a thermodynamic system consisting of ORC and polymer electrolyte
membrane electrolysis utilizing geothermal energy is illustrated in Fig. 16. Geothermal brine is used to heat up the ORC fluid
isobutene. The superheated fluid enters the ORC turbine to generate power, part of which is used in the hydrogen production unit.
ORC fluid passes through the condenser and pump to complete the ORC cycle. Water from the environment is passed through a
heat exchanger and is mixed with stream 12 to get hot enough for the input of PEME. The produced hydrogen is stored in the tanks
and the remaining oxygen is released to the environment.
The assumptions made in the modeling of the system are provided in Table 19.

Thermodynamic assessment of PEM electrolyzer and ORC components are performed to evaluate the thermodynamic perfor-
mance. The section below summarizes the necessary equation used in the modeling of the system. The total energy needed by the
electrolyzer can be calculated as:
DH ¼ DG þ TDS ð96Þ
where DG is the Gibbs free energy and TDS is the required thermal energy. The values of G, S, and H for hydrogen, oxygen, and
water can be obtained from thermodynamic tables. The total energy need is the theoretical energy required for H2O electrolysis
without any losses. The outlet flow rate of hydrogen is calculated by:
_ H2 ;out ¼ J ¼ N
N _ H O;reacted ð97Þ
2
2F
366 Exergoeconomics
Heat source (geothermal brine)

3
1
Turbine G
Evaperator
4 7
Heat
Condenser
2 5
Pump 9 8
H.EX
6
Reinjection well
10 PEM 11
Geothermal fluid electrolyzer
ORC fluid
H2 production cycle
O2 seperation 12
Thermal and unit
electrical energy
O2 to the enviroment
H2 tank
Fig. 16 Schematic diagram of combined cycle producing power and hydrogen.
Table 19 Input data used in the modeling of the system provided in Fig. 16
ORC
Heat source temperature (1C) 170
Heat source mass flow rate (kg/s) 10
Pinch point temperature difference in evaporator 5
Degrees of superheat (1C) 10
Turbine inlet pressure (bar) 20
PEME
PO2 (atm) 1.0
PH2 (atm) 1.0
TPEM ð1CÞ 80
Eact;a ðkJ=molÞ 76
Eact;c ðkJ=molÞ 18
la 14
lc 10
D ðmmÞ 100
Jaref A=m2 1.7 105
In Eq. (97), J is the current density, F is the Faraday constant, and N_ H2 O;reacted is the rate of water reacted in the process. The
required electrical energy for the PEM electrolyzer can be determined by:
Eelectric ¼ JV ð98Þ
where Eelectric is the electric energy input. Also, PEM electrolyzer voltage is given as
V ¼ Vo þ Zact;a þ Zact;c þ Zohm ð99Þ
where Vo is the reversible potential, which can be determined by Nernst equation as follows:
Vo ¼ 1:229 8:5 104 ðTPEM 298Þ ð100Þ

Also Zact;a , Zact;c , and Zohm are activation overpotential of the anode, activation overpotential of the cathode, and the ohmic
overpotential of the electrolyte respectively. Ohmic overpotential in the proton exchange membrane is due to the resistance of the
membrane to the hydrogen ions transporting through it. The ionic resistance of the membrane depends on the degree of
Exergoeconomics 367
humidification, thickness, and temperature of membrane. The local ionic conductivity s(x) of the membrane can be calculated as:

1 1
s½lðxÞ ¼ ½0:5139lðxÞ 0:326exp 1268 ð101Þ
303 T
where x is the depth in the membrane measured from the cathode–membrane interface and l(x) is the water content at a location
x in the membrane. The value of l(x) can be calculated in terms of water content at the membrane electrode edges:
la lc
lðxÞ ¼ x þ lc ð102Þ
L
where L is the membrane thickness, and la and lc are the water contents at the anode–membrane and the cathode–membrane
interface, respectively. The overall ohmic resistance can thus be expressed as
Z L
dx
RPEM ¼ ð103Þ
0 s½lðxÞ
Using Ohm’s law, the ohmic overpotential can be determined as

Zohm ¼ JRPEM ð104Þ
The activation overpotential is a measure of the activity of the electrodes. It represents the overpotential required for elec-
trochemical reaction. The activation overpotential of an electrode can be explicitly expressed as
2 sffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi 3
2
RT J RT J J
Zact;i ¼ sinh1 ¼ ln4 þ þ 15 ð105Þ
F 2J0;i F 2J0;i 2J0;i
where J0,i is the exchange current density and subscripts a and c represent anode and cathode, respectively. Exchange current
density is an important parameter in calculating the activation overpotential. It expresses the electrode’s capabilities in the
electrochemical reaction. The exchange current density for PEM electrolysis can be expressed as

Eact;i
J0;i ¼ Jiref exp ð106Þ
RT
where Jiref is the preexponential factor and Eact;i is the activation energy for the anode and cathode.
Also, other energy balance equations needed to model the system are presented in Table 20.

Using the principles mentioned earlier, the cost evaluation may be assessed for the system producing H2 and power. Only the
missing parts and supplementary equations are gathered here for the sake of brevity. Table 21 summarizes the supplementary
equations and cost equations used in the modeling.
1.8.4.3.3 Results and discussion

The summary of exergoeconomic results are presented in Table 22 for the thermodynamic system of Fig. 16. The last column of this
table is the exergoeconomic factor; as mentioned earlier, a low value of this factor calculated for a major component suggests that
Table 20 Relations of energy modeling used in the Fig. 16
Component Energy equations
Zis;T ¼ W _ _
Turbine Wa ; W T ¼ m 3 ðh3 h4 Þ
is
Evaporator m_ 1 ðh1 h2 Þ ¼ m_ 3 ðh3 h6 Þ

Condenser m_ 3 ðh4 h5 Þ ¼ m_ 6 ðh7 h6 Þ
Pump Zis;P ¼ WWa
is
; W_ P ¼ m_ 6 ðh6 h5 Þ
PEM W_ PEM ¼ H_ 8 H_ 11
Table 21 Input data and cost and auxiliary equations for each component

c8 ¼ 0 ZPEM ¼ 1000 W_ PEM PEME
075
ORC Turbine
c3 ¼ c4 ZORC;T ¼ 4750 W_ ORC;T
065
Pump
– ZORC;P ¼ 200 W_ ORC;P
06
c4 ¼ c5 ZORC;Cond ¼ 516:62 AORC;Cond Condenser
085
c1 ¼ c2 ZORC;Evap ¼ 309:14 AORC;Evap Evaporator
368 Exergoeconomics
Table 22 Exergoeconomic results evaluated for the system components of Fig. 16
Components E_ f (kW) cF,k ($GJ1) cP,k ($GJ1) C_ D;k ($h1) Z_ k ($h1) C_ D;k þ Z_ k ($h1) fk (%)
PEME 4,624 42.23 54.48 156.7 85.53 242.23 43.91

Turbine 7,841 17.08 23.27 159.9 87.43 247.33 44.53
Evaporator 12,296 11.93 15.18 109.2 3.192 112.392 4.115
Pump 381.3 23.27 27.58 3.106 1.523 4.629 41.87
3,000
2,549 2,542
2,500
2,000
1,510
1,500
1,052
1,000
500
37.08
0
PEME Evaporator Condenser Turbine Pump
Fig. 17 Exergy destruction rate for the system components.
cost savings in the entire system might be achieved by improving the component efficiency (reducing exergy destruction) even if
the CI for the component will increase. However, the exergoeconomic factor is not sufficient to explain if a component has to be
modified or not. For instance, even if a component has too low value of exergoeconomic factor (suggesting therefore its substitution
with a component of higher performance and higher cost), if the same component elaborates a quantity of fuel that is negligible
(and so has a low value of the so-called exergetic factor), it is not worth at all to substitute this component with a better one, as its
“exergy role” on the system is only negligible. The most critical components to discuss are the components elaborating a large
amount of inlet fuel (so, which have a high value of exergetic factor): only in this case it is interesting to analyze the values of their
exergoeconomic factor. Referring to the first column of Table 22, it can be noted that for this system, among the components having
higher inlet exergy (evaporator, turbine, and PEME, respectively), turbine and evaporator have the highest (44.53%) and lowest
(4.115%) exergoeconomic factors, respectively. Therefore, on one hand, while engineers should focus on reducing the investment
and operation costs of turbine, on the other hand, they are to reduce the costs associated with exergy destruction of the evaporator.
Exergy destruction rate for the system components for which power and hydrogen are produced via ORC and PEME,
respectively, are demonstrated below. The irreversibilities within the cycle components and contribution of each component on
the total exergy destruction is assessed.
Referring to Fig. 17, the highest and the second highest exergy destruction occur in the PEME and evaporator, respectively. In
the PEME, sources of irreversibility (i.e., chemical reaction, mixing and temperature difference) exist, while in the evaporator the
irreversibility due to the temperature difference is high enough to place it in the second rank. Also, we may conclude that exergy
destruction in the pump is negligible compared to other components because the change in the inlet and outlet enthalpies are
considerably small.
1.8.4.4 Single Effect Li/Br H2O Absorption Refrigeration System

An absorption chiller is a heat driven refrigeration machine, which has several similarities to vapor compression refrigeration
systems, but also has some important differences. The main difference is the substitution of the compressor with the combination
of an absorber, a solution pump and a generator. When waste heat is available and cooling is required, absorption chiller can be
an advantageous alternative to a vapor compression refrigerator.
Two fluids are used in an absorption chiller: the absorbent and the refrigerant. The refrigerant is chemically and physically
absorbed by the absorber for the purpose of heat transfer. Three main flows are circulated inside the chiller, namely a strong
solution, a weak solution, and the refrigerant.
Exergoeconomics 369
Condensor Generator
1
7 8
2
HEX
6 9
3 5 10
4
Evaporator Absorber
Fig. 18 Schematic diagram of single effect Li/Br absorption refrigeration chiller.
Fig. 18 shows a typical water lithium bromide (H2O–LiBr) single effect absorption chiller, which consists of a generator, a
condenser, an evaporator, an absorber, a solution heat exchanger, a solution pump, and two valves. Water is the refrigerant and
lithium bromide the absorber. The strong solution of H2O–LiBr separates from the absorber after being heated by the heat released
by the weak solution of H2O–LiBr in the solution heat exchanger. This facilitates the separation process in the generator, after
which the separated water is conveyed to the condenser and the H2O–LiBr to the absorber. In the condenser, water in a saturated
vapor state is converted to a saturated liquid or subcooled by releasing heat to the environment.
Fig. 18 illustrates a single effect Li/Br absorption refrigeration system. Water/lithium bromide and ammonia/water are the two
common combinations of working fluids in absorption refrigeration systems. The analyses on the vapor absorption refrigeration
systems show that the coefficient of performance (COP) of water/lithium bromide systems is higher than those of ammonia/water
ones. These cycles have gained interest because they can recover heat from low grade heat sources and create cooling accordingly.
The heat from heat sources is brought to the generator of the Li–Br/H2O cycle. The generator is used to run the single effect
Li–Br water refrigeration cycle. Water vapor leaving the generator passes through the condenser and creates cooling in the
evaporator after reducing its pressure in the expansion valve (EV). The strong solution, which comes back from the generator, gets
mixed with the exiting stream from the evaporator, and the weak solution is pumped back to the generator after getting heated in
the solution heat exchanger (HEX). The assumptions used in the modeling are provided below:
• The system operates at steady-state

• The refrigerant is assumed as saturated at the exits of the condenser, evaporator, and generator
• Generator temperature: 358K
• Evaporator temperature: 279K
• Condenser temperature: 308K
• Absorber temperature: 308K
• Temperature difference in heat exchangers cooling water: 10K
• Heat source mass flow rate: 12.5 kg/s
• Heat source temperature: 393K

Using mass and energy balance equations, we can model the absorption chiller. The mass and energy balances are given in
Table 23. Also, the equations for exergy balance are presented in Table 24 for the sake of brevity.
1.8.4.4.1.1 Exergy analysis

With the second law of thermodynamics and exergy principles, the following general exergy rate balance can be written:
X X
_ Qþ
Ex _ ex ¼
m _ W þ Ex
_ ex þ Ex
m _ D ð107Þ
i i i e e e
_ D is the exergy destruction rate, and other terms

where subscripts i and e denote the control volume inlet and outlet, respectively, Ex
are given as follows:

_ Q ¼ 1 T0 Q
Ex _i ð108Þ
Ti
370 Exergoeconomics
Table 23 Equations of mass and energy balance for absorption chiller
Component Mass balance Energy balance
Generator _ 1 x1 þ m_ 8 x8 ¼ m_ 7 x7
m Q_ Gen ¼ m_ 1 h1 þ m_ 8 h8 m_ 7 h7
Evaporator _ 3 ¼m
m _4 Q_ evap ¼ m_ 3 h3 m_ 4 h4
Condenser _ 1 ¼m
m _2 Q_ cond ¼ m_ 2 h2 m_ 1 h1
Absorber _ 4 x4 þ m_ 10 x10 ¼ m_ 5 x5
m Q_ abs ¼ m_ 4 h4 þ m_ 10 h10 m_ 5 h5
W_
Pump _ 5 ¼m
m _6 h6 ¼ h5 þ m_ 5p ; W_ p ¼ m_ 5 ðPGen Pabs Þ=Zp r5
HEX m_ 6 ¼m _ 7 ==m_ 8 ¼ m_ 9 m_ 6 ðh7 h6 Þ ¼ m_ 8 ðh8 h9 Þ
EV _e
m_ i ¼ m hi ¼ he
Table 24 Standard chemical values for selected substances at T0 ¼298.15K and P0 ¼1 atm [24,41]
Element ex 0ch ðkJ=molÞ Element ex 0ch ðkJ=molÞ
Ag (s) 70.2 Kr (g) 34.36

Al (s) 888.4 Li (s) 393.0
Ar (s) 11.69 Mg (s) 633.8
As (s) 494.6 Mn (sa Þ 482.3
Au (s) 15.4 Mo (s) 730.3
B (s) 628.8 N2 (g) 0.72
Ba (s) 747.4 Na (s) 336.6
Bi (s) 274.5 Ne (g) 27.19
Br2 (l) 101.2 Ni (s) 232.7
C (s, graphite) 410.26 O2 (g) 3.97
Ca (s) 712.4 P (s, red) 863.6
Cd (sa Þ 293.2 Pb (s) 232.8
Cl2 (g) 123.6 Rb (s) 388.6
Co (sa Þ 265.0 S (s, rhombic) 609.6
Cr (s) 544.3 Sb (s) 435.8
Cs (s) 404.4 Se (s, black) 346.5
Cu (s) 134.2 Si (s) 854.6
D2 (g) 263.8 Sn (s, white) 544.8
F2 (g) 466.3 Sn (s) 730.2
Fe (sa Þ 376.4 Ti (s) 906.9
H2 (g) 236.1 U (s) 1190.7
He (g) 30.37 V (s) 721.1
Hg (l) 115.9 W (s) 827.5
I2 (s) 174.7 Xe (g) 40.33
K (s) 366.6 Zn (s) 339.2
Ex _
_ w¼W ð109Þ
ex ¼ ex ph þ ex ch ð110Þ
_ Q is the exergy rate of heat transfer crossing the boundary of the control volume at absolute temperature T, the subscript 0
Here, Ex
used below refers to the reference environment conditions, and Ex _ W is the exergy rate associated with shaft work. Also, exph is
defined as follows:
exph ¼ ðh h0 Þ T0 ðs s0 Þ ð111Þ
The specific chemical exergy for a general gas mixture can be written as follows [39]:
" #
X
n X
n
exmix ¼
ch
xi exi þ RT0
ch
xi ln xi ð112Þ
i¼1 i¼1
For the absorption cooling system, since water and the LiBr solution are not ideal fluids, the following expression is used for the
molar chemical exergy calculation [40]:
" #
X n X
n
ex ch ¼ 1=Msol yi ex ch þ RT0
k
yi ln ðai Þ ð113Þ
i¼1 i¼1
Exergoeconomics 371
Applying this equation to the LiBr/water solution, we obtain:

" #
yH2 O ex 0H2 O þ yLiBr ex 0LiBr
ex ch ¼ 1=Msol ð114Þ
þRT0 ðyH2 O lnðaH2 O Þ þ yLiBr lnðaLiBr Þ
Here, aH2 O is the water activity, defined as the vapor pressure of water in the mixture divided by the vapor pressure of pure water, and
aLiBr is the LiBr activity, defined as the vapor pressure of LiBr in the mixture divided by the vapor pressure of LiBr. This equation
consists of two parts: the standard chemical exergy of pure species and the exergy due to the dissolution process, defined as follows:
1
ex 0ch ¼ yH2 O ex 0H2 O þ yLiBr ex 0LiBr ð115Þ
Msol
RT0
ch ¼
ex dis ½yH O lnðaH2 O Þ þ yLiBr lnðaLiBr Þ ð116Þ
Msol 2
where yi is the molar fraction. The relevant molar fractions here are defined as
ð1 x1w ÞMLiBr
yH2 O ¼ ð117Þ
ð1 x1w ÞMLiBr þ x1w MH2 O
yLiBr ¼ 1 yH2 O ð118Þ

Also, x1w is defined as
xLiBr
x1w ¼ ð119Þ
100
where xLiBr is the LiBr water solution concentration (in percent) and MLiBr and MH2 O are 86.85 kg/kmol and 18.02 kg/kmol,
respectively.
In order to calculate the chemical exergy for constituents not listed in Table 24, we consider chemical reactions involving
constituents for which the standard chemical exergy is already given. This approach allows us to calculate the chemical exergy for
such constituents. Since the standard chemical exergy of LiBr is not listed in Table 24, the following reaction is considered in order
to calculate its chemical exergy [41]:
X
n
ex 0ch ¼ Dg 0f þ ex 0ch;i ð120Þ
i¼1
1
Li þ Br 2 -LiBr ð121Þ
2
1
ex 0ch;LiBr ¼ Dg 0f;LiBr þ ex 0ch;Li þ ex 0ch;Br2 ð122Þ
2
where Dg 0f;LiBr ¼ 324 kJ=mol: [42]
Fig. 19 shows the variation of specific chemical exergy as a function of LiBr concentration on a mass basis, following
Eqs. (114) and (115). An increase in LiBr concentration is seen to raise the specific chemical exergy of the LiBr/water solution.
Based on LiBr concentration, therefore, the specific chemical exergy at each point of the single effect absorption chiller in Fig. 18
can be calculated using a code developed in MATLAB software. By applying the exergy rate balance equation for each component
in the single effect absorption chiller, the exergy destruction rates can be expressed. The exergy destruction rate for each component
of the absorption chiller is expressed in Table 25 where we can calculate the exergy destruction rate.

Using the principles mentioned earlier, the cost evaluation may be assessed for the system producing H2 and power. Only the
missing parts and supplementary equations are gathered here for the sake of brevity. Table 26 summarizes the supplementary
equations and cost equations used in the modeling.
1.8.4.4.3 Results and discussion

The exergoeconomic results for the absorption refrigeration system are presented in Table 27. As mentioned earlier in previous
examples, the exergoeconomic factor for which a low value of this factor calculated for a major component suggests that cost
saving in the entire system might be achieved by improving the component efficiency (reducing exergy destruction) even if the CI
for the component will increase. Based on the latter discussion, among the components having higher inlet exergy (generator,
evaporator, and absorber), evaporator and absorber have the highest (53.55%) and lowest (9.671%) exergoeconomic factors,
respectively. Therefore, on one hand, while engineers should focus on reducing the investment and operation costs of the
evaporator, on the other hand, they are to reduce the costs associated with exergy destruction for the absorber. Also, Table 26
demonstrates exergy efficiencies calculated for individual components.
Exergy destruction rate for the system components for which cooling is produced via absorption refrigeration system is
demonstrated below. The irreversibilities within the cycle components and contribution of each component on the total exergy
destruction are assessed.
372 Exergoeconomics
800
exch,0
700 exdis
exch,LiBr
600
500
400
exch (kJ/kg) 300
200
100
–100
–200
0 10 20 30 40 50 60
Concentration, X (%)
Fig. 19 Variation of standard specific chemical exergy (exch,0), specific chemical exergy due to dissolution (exdis), and specific chemical exergy,
as a function of LiBr mass basis concentration at T0 ¼251C.
Table 25 Equations of exergy balance for absorption chiller
Component Exergy destruction rate expression
Generator E_ D;G ¼ E_ 33 E_ 37 E_ 34 þ E_ Q
Evaporator E_ D;evap ¼ E_ 39 þ E_ 52 E_ 53 E_ 40
Condenser E_ D;Cond ¼ E_ 1 E_ 2 þ E_ cold water E_ hot water
Absorber E_ D;Abs ¼ E_ 4 þ E_ 5 þ E_ cold water E_ 10 E_ hot water
Pump E_ D;P ¼ E_ 5 E_ 6 þ W_ p
HEXx E_ D;HEX ¼ E_ 6 þ E_ 8 E_ 7 E_ 9
EV E_ D;EV ¼ E_ i E_ e
Table 26 Input data, cost, and auxiliary equations for each component

06
C_ 8 C_ 7 C_ 1 C_ 7 Generator
_ 7 ¼ Ex
Agen
_ Ex _ Ex _ 7 ZGen ¼ 17500
Ex
_C
8
_C þC_
1 10006
Absorber
_ 5 ¼ Ex
Aabs
5 4
_ 4 þEx
10
_ 10 Zabs ¼ 16000
Ex
100
071 Pump
cp ¼ 16 =GJ ZP1 ¼ 3 422 W_ P =1 1:41 fn
fn ¼ 1 þ ð0 2=ð1 ZP ÞÞ
06
c1 ¼ c2 Condenser
Zcond ¼ 8000 A100
cond
06
c19 ¼ c20 Aevap Evaporator
Zevap ¼ 16000 100
06
c8 ¼ c9 Heat exchanger
ZHEX ¼ 16; 000 A100HEX
– ZEV ¼ 0 EV
Referring to Fig. 20, the highest and the second highest exergy destruction occur in the absorber and condenser, respectively.
This phenomenon is mostly due to the large temperature differences in these components. Also, the change in magnitude of Li/Br
concentration in absorber is high enough to place it in the first rank. There is concentration difference occurring in the generator as
well, but since we have considered small temperature difference (to recover heat from low grade heat source), the exergy
destruction in the generator is not more than 10.94 kW.
Exergoeconomics 373
Table 27 Exergoeconomic results obtained for single effect absorption chiller
Components E_ f (kW) cF,k ($GJ1) cP,k ($GJ1) C_ D;k ($h1) Exergy efficiency (%) fk (%)
Generator 346.2 16 16.55 0.4094 96.85 38.61

Absorber 121.3 20.36 123.8 7.299 17.9 9.671
Condenser 70.03 72.21 267 13.21 27.47 2.079
Evaporator 130 7.461 14.236 0.678 80.58 53.55
Pump 52.9 16 16.2 2.945 3.41 0.8
HEX 59.86 11.85 16.25 0.4584 82.23 41.65
120
112.6
100
80
60
50.7
40 34.06
25.19
20
11.33 10.94
5.081
0
0
Absorber Condensor Pump Evaporator HEX Generator EV1 EV2
Fig. 20 Exergy destruction rates in absorption chiller components.
1.8.5 Future Directions
Energy use is directly linked to well-being and prosperity across the world. Meeting the growing demand for energy in a safe and
environmentally responsible manner is an important challenge. A key driver of energy demand is the human desire to sustain and
improve ourselves, our families, and our communities. There are around seven billion people on Earth and population growth will
likely increase energy demand, which depends on the adequacy of energy resources. In addition, increasing population and economic
development in many countries have serious implications for the environment, because energy generation processes (e.g., generation
of electricity, heating, cooling, and shaft work for transportation and other applications) emit pollutants, many of which are harmful
to ecosystems. Burning fossil fuels results in the release of large amounts of greenhouse gases, particularly carbon dioxide. In the
analysis and design of energy systems, the techniques often used combine different disciplines of (mainly thermodynamics) and
economic disciplines (mainly cost accounting) to achieve optimum designs. For energy conversion devices, cost accounting con-
ventionally considers unit costs based on energy. Many researchers have recommended that costs are better distributed among
outputs if cost accounting is based on the thermodynamic quantity exergy. The idea of coupling exergy and cost streams was first
discussed by Keenan in 1932 [43]. He pointed out that the value of the steam and the electricity rests in their “availability,” not in
their energy [44,45]. In the late 1950s, the studies of the second law costing started in two different places independently. Tribus and
Evans [44] studied desalination processes by exergy analysis, which led them to the idea of exergy costing and its applications to
engineering economics, for which they coined the word thermoeconomics [46]. The concept of their procedure was to trace the flow of
money, fuel cost and operation, and amortized capital cost through a plant, associating the utility of each stream with its exergy.
In this chapter, exergoeconomic principles along with several practical case studies were investigated and the results were
presented. Exergoeconomics can help designers to design their energy systems with lower exergy destructions and lower costs. The
application of exergoeconomics is better known when economics is highly affected by the decision makers; this is where the
connection between exergy and economy is necessary. For instance, in designing a heat exchanger with higher exergy efficiency, we
might come up with a design specification that leads us to have a very efficient heat exchanger; however, in this case the cost has not
been considered. This issue is important where economical concern exists and manufacturers also look at their products to be cost
competitive. The application of exergoeconomics is used for various energy systems such as a simple refrigeration system for cooling
374 Exergoeconomics
application, advanced power generation systems, combined heating and cooling systems, petrochemical plants, renewable integrated
energy systems, and hydrogen production units. Exergoeconomics is used in power generation by several researchers [4,5,47–50].
The main results from these studies were to consider both exergy and economics in power generation plants to calculate the
exergetic cost of electricity and cost of exergy destruction, and find the location where possible improvements can be considered to
minimize the cost of exergy destruction. There are also several other studies where the application of exergoeconomics is applied
for refrigeration systems [32,51–53]. These published studies also highlight the importance of exergoeconomics for refrigeration
systems. Some of them are absorption chillers where the waste heat is utilized, the generator of the absorption chiller and both
exergy efficiency and the cost of cooling are calculated. In addition, parametric studies are carried out to see how various
conditions such as ambient temperature and pressure, desired cooling temperature, and other design parameters affect the system
performances from an economic point of view. There are several other studies reported where exergy, economics, and the
environment are considered for energy systems [4,17,54–56].
These studies for various energy systems suggest that the application of exergoeconomics is not limited for specific systems, and
it can be applied for any systems involving processes where cost assessment is necessary. It is necessary to consider both exergy and
economics for designing any new energy systems to see if they are economically viable and they can be cost competitive with other
existing energy systems. Since sustainable development has attracted ample attention during the last few decades and there are
several emerging new energy systems down the road, the need for exergoeconomics will be significant.
1.8.6 Closing Remarks
In this chapter, basic principles of exergoeconomics were explained and the connection between exergy and economic was
addressed. The results show that exergoeconomic methods provide quite useful data in the way of improving the system to be cost-
effective. Although there is no guarantee that these methods will suffice, they do the job. A conventional system evaluation based
on energy balances and purchased-equipment cost calculations cannot provide the above information with an equal degree of
confidence. Compared with an exergoeconomic evaluation, many more trial-and-error attempts would typically be required with a
conventional optimization approach to a complex system to achieve comparable improvements in the system design. Several
energy systems were considered where both exergy and exergoeconomic analyses were applied and the results were presented. A
conventional CHP system was considered and exergoeconomics was applied and the cost of exergy destruction and exergoeco-
nomic factors were calculated. In addition, a renewable based integrated energy system was considered as a case study where both
exergy and exergoeconomics were applied and the results were presented.
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Further Reading
Dincer I. Refrigeration systems and applications. 3rd ed London: John Wiley & Sons, Ltd.; 2017. p. 727.
Dincer I, Hamut HS, Javani N. Thermal management of electric vehicles. London: John Wiley & Sons, Ltd.; 2017. p. 457.
Dincer I, Hogerwaard J, Zamfirescu C. Clean rail transportation options. New York: Springer Verlag; 2015. p. 223.
Dincer I, Ratlamwala T. Integrated absorption refrigeration systems: Comparative energy and exergy analyses. New York: Springer Verlag; 2016. p. 270.
Dincer I, Rosen MA. Exergy analysis of heating, refrigerating and air conditioning. Oxford: Elsevier Science, Ltd.; 2015. p. 388.
Dincer I, Rosen MA, Ahmadi P. Optimization of energy systems. London: John Wiley & Sons, Ltd.; 2017. p. 453.
Dincer I, Zamfirescu C. Advanced power generation systems. Oxford: Elsevier Science, Ltd.; 2014. p. 644.
Dincer I, Zamfirescu C. Drying phenomena: Analyses and applications. London: John Wiley & Sons, Ltd.; 2016. p. 482.
Dincer I, Zamfirescu C. Sustainable hydrogen production. Oxford: Elsevier Science, Ltd.; 2016. p. 479.
Tsatsaronis G. Design optimization using exergoeconomics. In: Bejan A, Mamut E, editors. Thermodynamic optimization of complex energy systems. NATO Science Series
(Series 3. High Technology). vol 69. Dordrecht: Springer; 1999.
Tsatsaronis G. Exergoecomics and environmental analysis. In: Bakshi BR, Gutowski TG, Sekulić DP, editors. Thermodynamics and the destruction of resources. Cambridge
University Press; 2011.
Relevant Websites
https://www.ashrae.org/
Ashrae.
https://www.asme.org/
ASME.
http://www.fleetlca.com/
Blueprime.
376 Exergoeconomics
http://www.eiolca.net/
Carnegie Mellon University.
http://www.combustion-institute.ca/
Combustion Institute: Canadian Section.
http://www.fchart.com/ees/
F-Chart Software, LLC.
http://www.fchea.org/
Fuel Cell and Hydrogen Association.
http://www.hgeosoft.com/
HGS Software and Consulting.
http://www.iahe.org/
International Association for Hydrogen Energy.
http://districtenergy.org/
International District Energy Association.
http://onlinelibrary.wiley.com/doi/10.1002/ceat.270190210/abstract
John Wiley & Sons Ltd.
http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1099-114X
John Wiley & Sons Ltd.
http://www.lcacalculator.com/
LCA Calculator.
http://www.seia.org/about/solar-energy
Solar Energy Industries Association.
http://www.sustainabilityma.org/
Sustainability Management Association.
http://www.exergoecology.com/
The Exergoecology Portal.
https://www.mathworks.com/
The Mathworks, Inc.
https://energy.gov/exit3b2tex.bat
US Department of Energy.
https://www.eia.gov/state/
US Energy Information Administration.
https://www.epa.gov/
US Environmental Protection Agency.
http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1099-114X
Wiley Online Library.
http://www.wsset.org/
World Society of Sustainable Energy Technologies.

1.8 Exergoeconomics

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1.

1.8.1 Introduction 340

340 Comprehensive Energy Systems, Volume 1 doi:10.1016/B978-0-12-809597-3.00107-3

1.8.2 Principles of Exergoeconomics

C_ P;tot ¼ C_ F;tot þ Z_ tot ð1Þ

Exergy System Exergy

1.8.2.1 Capital Investment Cost

1.8.2.2 Operating and Maintenance Costs

1.8.2.2.1 Exergy costing

Fig. 4 The schematic view of a boiler.

1.8.2.3 Illustrative Example 1 (Simple Cogeneration System)

Fig. 5 Schematic view of a cogeneration system.

Line Value Unit Line Value Unit

2 401.8 16.18 16,463 2353 0.0329 2.49E 05 0.02174

Line Value Unit Line Value Unit

2 401.8 88,415 18,886 2699 0.03777 1.34E 05 0.02947

1.8.2.3.2 Aggregation level for applying exergy costing

Unit cost of LP steam

Water, air and

1-Boiler 2-HP steam

Boiler and turbine

Fig. 8 Schematic view of cogeneration plant considering aggregation level.

Combining the two latter equations leads us to:

1.8.3 Exergy-Based Economic Evaluation

1.8.3.2 Exergoeconomic Evaluation

C_ D;k ¼ cF;k E_ D;k ðE_ P;k is considered to be constantÞ ð33Þ

C_ L;k ¼ cF;k E_ L;k ðE_ P;k is considered to be constantÞ ð34Þ

Diagram 1 Hot stream

Hot reheat, 8 6 main steam

1.8.3.2.1 Cost of exergy destruction

1.8.3.2.2 Cost of exergy loss

1.8.3.2.3 Relative cost difference

1.8.3.2.4 Exergoeconomic factor

1.8.3.2.5 Illustrative example 2 (CGAM Cycle)

1.8.3.2.5.1 Energy analysis

Here, Cpa is considered a temperature variable function as follows [10]:

Table 6 Input data for the system

With the following combustion equation:

Here, Cpg is considered temperature-dependent as given below [28]:

• Heat recovery steam generator (HRSG):

1.8.3.2.6 Exergy analysis

Exergy destruction rate (kW)

C_ D;K ¼ cF;k E_ D;K ð66Þ

System component Capital or investment cost functions

Table 8 Thermodynamic properties and economic parameters of CGAM CHP cycle

Stream no T (K) P (bar) mi (kg/s) E_ i (kW) C : i ($h1) ci ($GJ1)

1 298.2 1.013 93.13 0 0 0

Table 9 Exergoeconomic results for CGAM CHP cycle

1.8.4 Case Studies

1.8.4.1 Solar Based Energy System

1.8.4.1.1 Thermodynamic analysis

Table 10 Input data for the system

Parameter Summer Winter

Turbine inlet pressure (kPa) 1000 1000

1.8.4.1.2 Exergoeconomic analysis

Table 11 Fuel and product for exergy analysis of the system

Component Fuel Product

Table 12 Cost rate balances and auxiliary equations for components

Component Cost rate balance Auxiliary equation

Turbine C_ 1 þ Z_ turb ¼ C_ 2 þ C_ 3 þ C_ w ;turb c1 ¼ c2 ¼ c3

Table 13 Capital cost expressions for system components [31,33–35]

Component Capital cost

Exergy destruction rate (kW)

Table 14 Exergoeconomic parameters of solar based CCHP system in summer