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Life-cycle costing: Analysis of biofuel production systems 251

Table 8.8 The estimated coefficients and P-values: LCC of WCO biodiesel
Term Estimate t Ratio Prob>|t|
Feedstock price 0.0010462 <.0001 †
Operating rate 0.0009829 <.0001 †
Capacity –0.001366 <.0001 †
Interest rate 1.5729815 <.0001 †
Biodiesel conversion efficiency –0.167171 <.0001 †
(Capacity-75)*(Capacity-75) 0.0000189 <.0001 †
(Biodiesel conversion efficiency-0.94)*(Feedstock –0.001151 <.0001 †
price-150)
(Feedstock price-150)*(Interest rate-0.04) 0.0037928 <.0001 †
(Interest rate-0.04)*(Operating rate-295) 0.0033239 <.0001 †
(Feedstock price-150)*(Capacity-75) –1.755e-7 0.0706
(Biodiesel conversion efficiency-0.94)*(Biodiesel 0.3412544 0.1324
conversion efficiency-0.94)
(Biodiesel conversion efficiency-0.94)*(Operating –0.000105 0.1848
rate-295)
(Biodiesel conversion efficiency-0.94)*(Capacity-75) 0.0004336 0.1983
(Interest rate-0.04)*(Interest rate-0.04) 4.362823 0.2672
(Biodiesel conversion efficiency-0.94)*(Interest rate- –0.482314 0.5538
0.04)
(Operating rate-295)*(Operating rate-295) –1.138e-8 0.7325
(Capacity-75)*(Interest rate-0.04) –0.000309 0.8154
(Feedstock price-150)*(Feedstock price-150) 3.6136e-9 0.8325
(Feedstock price-150)*(Operating rate-295) 3.974e-9 0.8460
(Capacity-75)*(Operating rate-295) 1.4594e-8 0.9140
† Significant at a 95% degree of confidence.

actually negative. Within the range of values used for the LCC estimates, it is
unlikely that the cost of jatropha oil will be less than the cost of petroleum
diesel because the entire range of its cost is higher than the entire range of the
petroleum diesel selling price. On the other hand, there is an overlap between
the costs of fish oil and waste cooking oil biodiesels and the selling price of
petroleum diesel. Depending then on prevailing conditions, such as govern-
ment subsidies that may lower the cost of waste oil feedstock, it is easy to
compute the cost for the feedstock and decide if the government subsidy
would lower the cost sufficiently below the cost of petroleum diesel.

3 Concluding remarks
In this chapter, we have described how the life-cycle cost (LCC) of a devel-
opment project may be used to contribute to a life-cycle sustainability