The total capital investment (TCI) represents a once-off expense for the design, construction, and start-up of a new plant or modifications on an existing plant (Seider et al., 2004). TCI is the sum of total fixed capital investment (TFCI), land, and working capital (WC).
Different methods of estimating TCI are available based on the level of information available, and the different estimation methods yield varying levels of accuracy. According to Peters and Timmerhaus (1991), there are five methods of estimation that are normally used for process design purposes. These methods of estimation are: order-of-magnitude (±30% accuracy), study estimate (±30% accuracy), preliminary estimate (±20% accuracy), definitive estimate (±10% accuracy) and detailed estimate (±5% accuracy).
In this study, the study estimate method will be used for capital cost estimation. The study estimate method requires knowledge of the major process equipment e.g pumps, compressors, columns and vessels, heat exchangers etc. Each equipment is (roughly) sized, and an approximate cost is
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determined; a factor is then applied on the total cost of equipment to give an estimate of capital cost (Peters and Timmerhaus, 1991; Turton et al., 2009). The study estimate method was chosen for capital cost estimation in this study based on the availability of estimated equipment cost for the different sections of the process in this study. The study estimate method has been used for economic evaluation of various biomass pyrolysis processes (Wright et al., 2010; Dutta et al., 2015; Naleli, 2016). The approach used for TCI estimation in this study is adopted from the studies of Wright et al. (2010), Dutta et al. (2015), and Naleli (2016), in which the sum of installed cost of all equipment in the main manufacturing process is calculated and is referred to as inside battery limits (ISBL). ISBL covers the costs associated with purchase, installation, piping, instrumentation and controls of each process equipment (Seider et al., 2004; Naleli, 2016). In this study, ISBL covers equipment in the pre-treatment section, pyrolysis section, separation section and the energy recovery section (for the scenario with energy recovery). Table 41 shows the ISBL for the base case waste tyres to limonene process. Table 41: ISBL for the waste tyres to limonene base case process
Equipment item Installed cost (MM$) Source
Pre-treatment equipment 0.21 Jiangyin Xinda Machinery (2016) Reactor system 1.26 Pyrocrat Systems LLP (2016) Heat exchangers 0.27 Aspen Plus® Economic Analyzer
Pumps 0.053 Aspen Plus® Economic Analyzer
Drums 0.11 Aspen Plus® Economic Analyzer
Columns 1.87 Aspen Plus® Economic Analyzer, Turton et al. (2009)
ISBL 3.77
From Table 41, it can be seen that the major contributors to ISBL are the distillation columns and reactor system at 50% and 33% contribution respectively. The installed cost for the columns in Table 41 includes the cost of the towers and all the equipment associated with the columns i.e. condensers, reboilers, reflux pumps, and condenser accumulators. The distillation columns have a high installed cost due to the number of theoretical stages required for most of the columns, and the large number of individual equipment associated with the columns. The high installed cost for the reactor system can be attributed to the size and operating temperature of the reactor which in turns requires materials of construction that can withstand the particular operating temperature.
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The purchased cost of pre-treatment equipment and the pyrolysis reactor system were obtained from Jiangyin Xinda Machinery (2016) and Pyrocrat Systems LLP (2016) respectively. Installation factors of 3.02 and 3 were applied respectively, to give the total installed costs of pre-treatment and pyrolysis reactor shown in Table 41. The installation factors of 3.02 and 3 were obtained from Wright et al. (2010) and Jones et al. (2013). Equipment costs quoted for capacities different from this study were adjusted to obtain costs for the corresponding capacity in this study, using the sixth-tenth-factor rule from Peters and Timmerhaus (1991).
The Economic Analyzer of Aspen Plus® V8.6 was used to calculate the purchased and installed costs of minor equipment such as pumps, heat exchangers, and vessels. For equipment costs to be estimated in Aspen Plus®, equipment sizing results should be within particular sizing parameters predetermined by Aspen Plus®. However, other costing techniques such as the Guthrie method are available in literature, which give equipment costs that are just as acceptable as those from Aspen Plus®. Consequently, the purchased and installed costs of distillation column towers used in this study were obtained using the bare module costing technique of Guthrie reported in Turton et al. (2009).
ISBL is then used to calculate the total direct cost (TDC) of capital investment by addition of costs for additional piping, site development, and warehouse. These additional costs are calculated as percentages of ISBL, as shown by Wright et al. (2010), Dutta et al. (2015) and Naleli (2016). The individual components of TDC and their actual amounts for the base case scenario are shown in Table D1 (in Appendix D). The TDC for the base case scenario is 4.43 MM$.
TDC is then used to calculate the total indirect cost (TIC) of capital investment. TIC represents the non- construction costs typically associated with project management and engineering, procurement, and construction services (Dutta et al., 2015). TIC is divided into 5 components (prorateable expenses, field expenses, home office and construction, project contingency and other costs for start-up, permits etc.), which are calculated as percentages of TDC (Wright et al., 2010; Dutta et al., 2015). Table D2 in Appendix D shows the different components of TIC and their actual values for the base case scenario. The TIC for the base case scenario is estimated at 2.66 MM$.
After TIC has been estimated, the remaining components of TCI are total fixed capital investment (TFCI), the cost of land, and working capital (WC). TFCI is the sum of TDC and TIC (Dutta et al., 2015). The cost of land is 2% of TFCI, and WC is normally estimated to be 5% of TFCI (Seider et al., 2004; Jones et al., 2013; Naleli, 2016). The working capital together with the cost of land are recovered at the end
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of the project life. The remaining components of TCI together with the TCI for the base case scenario are shown in Table D3 in Appendix D.
From Table D3, it can be seen that the TFCI is estimated at 7.1 MM$, the cost of land is 0.14 MM$, working capital is estimated at 0.35 MM$, and it can be concluded that total capital investment of 7.6 MM$ will be required for the base case scenario.