Page 263 - Biofuels for a More Sustainable Future

Life-cycle costing: Analysis of biofuel production systems 237

OR¼operating rate (US$/t)
PC¼annual biodiesel production capacity (t/y)
r ¼interest rate
n MR CC
P
MC¼maintenance cost (US$) ¼
i¼l ð l + rÞ i
MR¼maintenance ratio (%), the ratio of maintenance
cost to capital cost
P n FP FU
FC¼feedstock cost (US$) ¼
l + rÞ
i¼l ð i
FP¼feedstock price (US$/ton)
FU¼feedstock utilization¼PC/CE
CE¼biodiesel conversion efficiency (%)
n-1
SV¼salvage value (US$) ¼ RC l-dÞ
ð
RC¼replacement cost
d ¼depreciation rate
P n GP GM
BP¼by-product credit (US$) ¼ i
i¼l ð l + rÞ
GP¼glycerol price (US$/kg)
GM¼PC GCF
GCF¼glycerol conversion factor
Each of the costs is accounted for in the conventional manner. Capital
cost includes process equipment, infrastructure, and land while operation
cost includes labor, utilities, and waste treatment. Maintenance cost is
assumed to be 2% of the total capital cost over the course of the entire pro-
ject. Feedstock cost includes all raw materials including oil, methanol, and
catalysts. The salvage value is the remaining value of capital cost at the end of
the project, assuming a depreciation of 10%. Finally, a credit is given to sub-
tract the cost of the glycerin by-product.

2.2 System description
In the following example, we assess the cost of three feedstocks that are being
considered as potential feedstocks for biodiesel production in Vietnam.
These are jatropha oil, waste cooking oil, and fish oil. The jatropha oil is
oil obtained from the seeds of Jatropha curcas. The fish oil is residual oil recov-
ered from fish processing plants while the waste cooking oil is obtained from
restaurants, hotels, and households. The system boundary for jatropha oil is
shown in Fig. 8.3 while the system boundary for the waste cooking oil and
the fish oil is shown in Fig. 8.4. It can be seen that the system for the jatropha
oil includes cultivation and extraction of the oil. On the other hand, the sys-
tems for the waste cooking oil and the fish oil only include gathering of
the oil.