CHAPTER D: ECONOMIC ANALYSIS

A. Computations:
Requirements of each Model:
Fuel Consumption and Cost: (Annual kWh per unit) x ((Specific Fuel Consumption
(L/kWh)) x ((Cost of Fuel per L (Php))
Lubrication Consumption and Cost: (Annual kWh per unit) x ((Specific Lubricating Oil
Consumption (L/kWh)) x ((Cost of Lubricant per L (Php))
Maintenance Cost: (Monthly Preventive Maintenance Cost (US$/kW) in 2021) x (12)
(Nominal Capacity (kW)/ Engine Output) x (US to Peso conversion)
Operational Cost: (Annual Operational Cost (US$/kWh) in 2021) x (US to Peso
conversion) x (Annual kWh per unit)
Depreciation Cost: ((Cost of Engine - Salvage Value (Php)) x (Depreciation Rate/ (((1+
Salvage Value) Useful life (yr))-1)))
Cost of Engine: (Nominal Capacity (kW)/ Engine Output) x (Specific Cost of Engine
(US$/kw) in 2021) x (US to Peso conversion)
Nominal Capacity (kW)/ Engine Output: (Engine output) x 1000
Actual Generated (kW) / F Generated Output: (F Generator output) x 1000
Annual Operational Hours: ((Daily load (weekdays) x 6)) + ((Daily load (Sunday)) x (Weeks in
a year)
Annual kWh per unit: (Actual Generated (kW) / F Generated Output) x (Annual Operational
Hours)
Specific Fuel Consumption (L/kWh): ((Nominal Capacity (kW)/ Engine Output)/ (2250/604.2))
*3
Specific Fuel Consumption (kg/kWh): Specific Fuel Consumption (L/kWh) / (0.001*920)
Cost of Fuel per L (Php): Based on fuel market price* (Diesel, n.d.)
Specific Lubricating Oil Consumption (kg/kWh): Specific Lubricating Oil Consumption
(L/kWh / (0.001*920)
Specific Lubricating Oil Consumption (L/kWh): 1% (Frederick T. Morse, 1953)(Specific Fuel
Consumption (l/kwh))
Cost of Lubricant per L (Php): 208.94 x (Euro to Peso / 209)
Specifitv Cost of Engine (US$/kw) in 2005: (Nominal Capacity (kW)/ Engine Output/2000) x
((342.82008) – ((3.0153545) * (2000)) + ((0.013124421) * ((2000) 2)) – ((2.5109142*(10-5))) *
(20003)) + ((2,5674462) * (10-8)) * (20004)) – ((1.462517) * (10-11)) * ((2000)2)) + ((4.3827048) *
(10-15)) * (20006)) – ((5.3894466) * (10-19)) * (20007)))
Specific Cost of Engine (US$/kw) in 2021: (Specific Cost of Engine (US$/kw) in 2005) x
((USD inflation rate (2005-2021 (rate, n.d.)))
Monthly Preventive Maintenance Cost (US$/kW) in 2005: 55.16 * (Nominal Capacity (kW)-
0.7017

Monthly Preventive Maintenance Cost (US$/kW) in 2021: (Monthly Preventive Maintenance

Cost (US$/kW) in 2005) x ((USD inflation rate (2005-2021) (rate, n.d.))
Annual Operational Cost (US$/kWh) in 2005: 0.0111*(Nominal Capacity (kW)-.02771
Annual Operational Cost (US$/kWh) in 2021: (Annual Operational Cost (US$/kWh) in 2005) x
((USD inflation rate (2005-2021))
Salvage Value (Php): (Cost of Engine) x ((1-Depreciation Rate) Useful Life (yr.)))
Depreciation Rate: 10 % (Depreciation, n.d.)
Useful life (yr): 20 years (Book, n.d.)
Sample Computation:
Alternative 1: HYUNDAI HIMSEN 16H32/40V

Fuel Consumption and Cost: (Annual kWh per unit) x ((Specific Fuel Consumption
(L/kWh)) x ((Cost of Fuel per L (Php))
SAMPLE COMPUTATION: 4244885.192*(4,081.71) * (71.70) =1,242,301,172,579.56
Lubrication Consumption and Cost: (Annual kWh per unit) x ((Specific Lubricating Oil
Consumption (L/kWh)) x ((Cost of Lubricant per L (Php))
SAMPLE COMPUTATION: 4244885.192* (700.8696) * (606.24) = 105,039,952,235.71
Maintenance Cost: (Monthly Preventive Maintenance Cost (US$/kW) in 2021) x (12)
(Nominal Capacity (kW)/ Engine Output) x (US to Peso conversion)
SAMPLE COMPUTATION: 1,334.4* (12) * (8000) * (59.01) = 779,131.57
Operational Cost: (Annual Operational Cost (US$/kWh) in 2021) x (US to Peso
conversion) x (Annual kWh per unit)
SAMPLE COMPUTATION: 0.00 * (59.01) * (91,957,170.83) = 324,320.27
Depreciation Cost: ((Cost of Engine - Salvage Value (Php)) x (Depreciation Rate/ (((1+
Salvage Value) Useful life (yr))-1)))
SAMPLE COMPUTATION: (545,751,561.33 - 66,350,649.06) * (0.10) / (1 +
66,350,649.06)25.00 = 8,370,160.04
Cost of Engine: (Nominal Capacity (kW)/ Engine Output) x (Specific Cost of Engine
(US$/kw) in 2021) x (US to Peso conversion)
SAMPLE COMPUTATION: 8000.00 * (1,334.4) * (59.01) = 545,751,561.33

Nominal Capacity (kW)/ Engine Output: (Engine output) x 1000

SAMPLE COMPUTATION: 8 * (1000) = 8000
Actual Generated (kW) / F Generated Output: (F Generator output) x 1000
SAMPLE COMPUTATION: 6.3304* (1000) = 6330.4
Annual Operational Hours: ((Daily load (weekdays) x 6)) + ((Daily load (Sunday)) x (Weeks in
a year)
SAMPLE COMPUTATION: (6330.4 x 40) (6) + (6330.4 x 3) x 52.18 = 639.9646
Annual kWh per unit: (Actual Generated (kW) / F Generated Output) x (Annual Operational
Hours)
SAMPLE COMPUTATION: 14478.8909 x 6330.4 = 4244885.192
Specific Fuel Consumption (L/kWh): ((Nominal Capacity (kW)/ Engine Output)/ (2250/604.2))
*3
SAMPLE COMPUTATION: (8000) / (2250/604.2) *3 = 4,081.71
Specific Fuel Consumption (kg/kWh): Specific Fuel Consumption (L/kWh) / (0.001*920)
SAMPLE COMPUTATION: 6444.8/ (0.001*920) = 4,436.64
Cost of Fuel per L (Php): Based on fuel market price*
Specific Lubricating Oil Consumption (kg/kWh): Specific Lubricating Oil Consumption
(L/kWh / (0.001*920)
SAMPLE COMPUTATION: 644.8/ (0.001*920) = 44.37
Specific Lubricating Oil Consumption (L/kWh): 1% (Frederick T. Morse, 1953)(Specific Fuel
Consumption (L/kwh))

SAMPLE COMPUTATION: 0.001*6444.8= 40.82

Cost of Lubricant per L (Php): 2208.94 x (Euro to Peso / 209)
SAMPLE COMPUTATION: 2208.94 x (57.36/209) = 606.24
Specific Cost of Engine (US$/kw) in 2005: (Nominal Capacity (kW)/ Engine Output/2000) x
((342.82008) – ((3.0153545) * (2000)) + ((0.013124421) * ((2000) 2)) – ((2.5109142*(10-5))) *
(20003)) + ((2,5674462) * (10-8)) * (20004)) – ((1.462517) * (10-11)`) * ((2000)2)) + ((4.3827048) *
(10-15)) * (20006)) – ((5.3894466) * (10-19)) * (20007)))
SAMPLE COMPUTATION: (8000/2000) x ((342.82008) – ((3.0153545) * (2000)) +
((0.013124421) * ((2000)2)) – ((2.5109142*(10-5))) * (20003)) + ((2,5674462) * (10-8)) * (20004)) –
((1.462517) * (10-11)) * ((2000)2)) + ((4.3827048) * (10-15)) * (20006)) – ((5.3894466) * (10-19)) *
(20007))) = 877.046840
Specific Cost of Engine (US$/kw) in 2021: (Specific Cost of Engine (US$/kw) in 2005) x
((USD inflation rate (2005-2021))
SAMPLE COMPUTATION: (877.046840) x (1.39) = 1216.90249
Monthly Preventive Maintenance Cost (US$/kW) in 2005: 55.16 * (Nominal Capacity (kW)-
0.7017

SAMPLE COMPUTATION: 55.16 x (8000)-0.7017 = 0.1007

Monthly Preventive Maintenance Cost (US$/kW) in 2021: (Monthly Preventive Maintenance
Cost (US$/kW) in 2005) x ((USD inflation rate (2005-2021))
SAMPLE COMPUTATION: (0.1007 x 1.39) = 1.399
Annual Operational Cost (US$/kWh) in 2005: 0.0111*(Nominal Capacity (kW)-.02771
SAMPLE COMPUTATION: 0.01111 x (8000)-.0.02771 = 0.008
Annual Operational Cost (US$/kWh) in 2021: (Annual Operational Cost (US$/kWh) in 2005) x
((USD inflation rate (2005-2021))
SAMPLE COMPUTATION: 0.008 x (1.39) = 0.01
Salvage Value (Php): (Cost of Engine) x ((1-Depreciation Rate) Useful Life (yr.)))
SAMPLE COMPUTATION: (629,943,552) x ((1-0.10)25)) = 66,350,649.06
Depreciation Rate: 0.10
Useful life (yr): 20.00
Comparison table of Each Alternative

Alternative A:
RESERVED ENGINE 1: HIMSEN 16H32/40V

FUEL COST (pesos/hr) ₱1,242,301,172,579.56

LUBRICATION COST ₱105,039,952,235.71
MAITENANCE COST ₱779,131.57
OPERATIONAL COST ₱324,320.27
DEPRECIATION COST ₱8,370,160.04
COST OF ENGINE ₱545,751,561.33
Total Cost ₱2,695,792,699,976.95

Nominal Capacity (kW)/ Engine Output 8000

Actual Generated (kW) / F Generated Output 6330.4
Annual Operational Hours 639.9646
Annual kWh per unit 4244885.192
Specific Fuel Consumption (L/kWh) 4,081.71
Specific Fuel Consumption (kg/kWh) 4,436.64
Cost of Fuel per L (Php) 71.7
Specific Lubricating Oil Consumption (kg/kWh) 44.37
Specific Lubricating Oil Consumption (L/kWh) 40.82
Cost of Lubricant per L (Php) 606.2430545
Specifitv Cost of Engine ( US$/kw) in 2005 877.04684
Specific Cost of Engine (US$/kw) in 2021 1216.90249
Monthly Preventive Maintenance Cost 0.1007
(US$/kW) in 2005
Monthly Preventive Maintenance Cost 1.399
(US$/kW) in 2021
Annual Operational Cost (US$/kWh) in 2005 0.008
Annual Operational Cost (US$/kWh) in 2021 0.01
Salvage Value (Php) ₱66,350,649.06
Depreciation Rate 0.1
Useful life (yr) 20
Alternative B
MAIN ENGINE: HIMSEN 18H3CV
FUEL COST (pesos/hr) ₱9,595,663,088,695.75
LUBRICATION COST ₱811,339,484,139.47
MAITENANCE COST ₱806,992.69
OPERATIONAL COST ₱538,809.58
DEPRECIATION COST ₱10,593,483.81
COST OF ENGINE ₱690,716,819.81
Total Cost ₱83,261,641,831,528.80

Nominal Capacity (kW)/ Engine Output 8550

Actual Generated (kW) / F Geneated Output 7463.7
Annual Operational Hours 976.219225
Annual kWh per unit 7286207.43
Specific Fuel Consumption (L/kWh) 18,367.68
Specific Fuel Consumption (kg/kWh) 19,964.87
Cost of Fuel per L (Php) 71.7
Specific Lubricating Oil Consumption (kg/kWh) 199.6486957
Specific Lubricating Oil Consumption (L/kWh) 183.68
Cost of Lubricant per L (Php) ₱606.24
Specifitv Cost of Engine ( US$/kw) in 2005 986.677695
Specific Cost of Engine (US$/kw) in 2021 1369.015302
Monthly Preventive Maintenance Cost 0.096064657
(US$/kW) in 2005
Monthly Preventive Maintenance Cost 0.133289711
(US$/kW) in 2021
Annual Operational Cost (US$/kWh) in 2005 0.000903182
Annual Operational Cost (US$/kWh) in 2021 0.001253165
Salvage Value (Php) ₱83,975,040.22
Depreciation Rate 0.10
Useful life (yr) 20
Alternative C:

MAIN ENGINE: HIMSEN 20H32/40V

FUEL COST (pesos/hr) ₱8,205,882,336,546.75
LUBRICATION COST ₱693,829,731,234.13
MAITENANCE COST ₱835,363.74
OPERATIONAL COST ₱397,411.96
DEPRECIATION COST ₱13,355,158.41
COST OF ENGINE ₱870,783,654.64
Total Cost ₱71,204,779,514,957.00

Nominal Capacity (kW)/ Engine Output 9600

Actual Generated (kW) / F Generated Output 8298
Annual Operational Hours 668.7646
Annual kWh per unit 5549408.651
Specific Fuel Consumption (L/kWh) 20,623.36
Specific Fuel Consumption (kg/kWh) 22,416.70
Cost of Fuel per L (Php) 71.7
Specific Lubricating Oil Consumption (kg/kWh) 224.1669565
Specific Lubricating Oil Consumption (L/kWh) 206.23
Cost of Lubricant per L (Php) ₱606.24
Specifitv Cost of Engine ( US$/kw) in 2005 1107.84864
Specific Cost of Engine (US$/kw) in 2021 1537.139988
Monthly Preventive Maintenance Cost 0.088565491
(US$/kW) in 2005
Monthly Preventive Maintenance Cost 0.122884618
(US$/kW) in 2021
Annual Operational Cost (US$/kWh) in 2005 0.000874653
Annual Operational Cost (US$/kWh) in 2021 0.001213581
Salvage Value (Php) ₱105,866,963.60
Depreciation Rate 0.10
Useful life (yr) 20

Selection and Conclusion of the Final Alternative Based on the Comparison Table

Base on the different specifications of the engines and the different schedule and the economic
analysis, we decided to choose the 1 st alternative out of the 4 alternatives. From the total cost
of each alternative, the highest is alternative 4, which has a total of ₱194,689,296,860,117.00.
The second highest that has a total of ₱83,261,641,831,528.80 which is alternative 2. The third
that has the highest total cost is alternative 3 and one respectively, and the least of all the
alternatives is the alternative 3 which has a total of ₱71,204,779,514,957.00. Even the
alternative two has the least total cost of the plant, comparing on the second least total cost,
which is the alternative one, the number of units of engines of alternative one is lesser. The
alternative two has an engine unit of 8 main engines and 2 reserve engines. On the other hand,
the alternative one has 3 main engines and 3 reserve engines. Based on the scheduling of the
alternatives, the alternative one is much better than all the other alternatives. The alternative
one has a fuel cost of ₱ ₱1,242,301,172,579.56. Its lubricating cost is ₱105,039,952,235.71. Its
maintenance cost is ₱779,131.57. The operational cost of ₱324,320.27. The depreciation cost
of ₱8,370,160.04 and the engine cost of ₱545,751,561.33.
.