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CHBE 459 Chemical & Biological Engineering Economics Assignment #1 Due Date: February 6, 2012 Question 1.

This question is pertinent to the report, entitled British Columbia On-Farm Anaerobic Digestion Benchmark Study (CH-Four Biogas Inc. 2011). Details of estimated total capital expenditures (capital costs) may be found in Appendix E of the report. a) Prepare a summary of the capital costs of the anaerobic digestion systems (table below) that CHFour Biogas Inc. has estimated for Farms B E F H I J and L, where dairy manure, FOG (fats oil and grease) and SSO (source separated organics) are used as mixed feedstocks. Farm Volume of digester, m3 B E F H I J L Engine size, kW Capital cost for Capital cost for electricity production, $ biomethane production, $

b) For the two options involved in electricity production: i) 25% non-agricultural feedstock, and ii) 49% non-agricultural feedstock, estimate the exponent m in the cost-capacity relationship equation: C = a Qm where C is the capital cost, and Q is the capacity (i.e. volume of digester) Does the cost-capacity relationship thus derived indicate economy-of-scale? c) Repeat the calculations that you have done in Part (b), but for biomethane production. d) Why is the capital cost much higher for Farm F versus Farm B? e) For electricity production, compare your calculated values of $/kW (capital cost per kW) with values presented in the report (as shown below):

Question 2. Figure 1 shows a system designed to recover argon gas from the purge stream in an ammonia synthesis plant. Based on the specifications for the equipment, and using correlation equations and/or charts where applicable, estimate the total purchased equipment cost for the process. Use CE plant cost index of 550. Adsorbers, absorbers and distillation columns are towers/pressure vessels A1 A2 AB1 D1 Weight, lbs 158900 79600 12500 9000 Assume SS 316 for units that are made of stainless steel Unit T1 is a power-recovery turbine with pressure discharge For the gas compressors and the turbine, Consumed power or Extracted power (i.e. Size factor in the relevant chart or equation) = Theoretical power * Efficiency Question 3. This question is pertinent to the paper A process model to estimate biodiesel production costs (Haas et al. 2006). Capital and production costs were calculated for a soy oil-based biodiesel facility, with a production capacity of approximately 38 million liters per year. Capital cost and its components are shown in Table 2, whereas total production cost and its components are shown in Table 3, respectively (Haas et al. 2006). a) If the process equipment cost of $2.166 million is assumed to be the delivered cost of process equipment for a fluid processing plant and you were to apply a traditional Lang Factor to this base cost (Ref. course notes Chapter 2 Table 22.17), i) What would be the Fixed Capital Investment (FCI)? ii) Compare this FCI value to the Total costs presented in Table 2 of the paper. iii) The installation cost was estimated to be double the equipment costs. This is substantially different from Table 22.17. How would you interpret this installation cost item in the paper? b) If you were to apply the general guidelines (course notes Chapter 3 Table 1) to calculate the total production cost (TPC), using the average value out of the range of estimates for each item, i) How would your calculated values, in [$/yr] and [$/L], be different from those presented in Table 3 of the paper? ii) How would the major components of TPC (raw materials, utilities, labor, supplies, general works, and depreciation) be different? D2 1400

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