Page 64 - Biomass Gasification, Pyrolysis And Torrefaction Practical Design and Theory

Chapter | 2 Economic Issues of Biomass Energy Conversion 43

The contingency has two parts: process contingency C cont, tech and project
contingency C cont, proj . The contingency is generally taken as a percentage of
the capital cost, CC.
C cont 5 C cont; tech 1 C cont; proj (2.11)
The process contingency covers the uncertainty associated with the tech-
nology, while the project contingency covers uncertainty with project execu-
tion. If the plant does not perform as designed, modifications in gasifier or
associated equipment are required. The process contingency is meant to cover
that expense. Gasification, pyrolysis, or torrefaction technologies are not as
matured as the combustion technology. So, the process contingency of such a
plant would be a higher percentage of the capital cost than it would be for a
conventional combustion plant.
A large gasification plant takes several years to complete. From the
beginning of the project till the date when the plant actually starts earning
revenue, there is no return on the investment, which is largely borrowed.
During the entire period of project development, the plant owner would have
to pay interest on the borrowed capital. This amount of carrying charge is
known as “allowance for funds during construction” (AFDC) and is added to
the TPC to get the total plant investment required (TPI).
TPI 5 TPC 1 AFDC (2.12)
The total capital requirement (TCR) must include funds required for
start-up expense (C start ), working capital (C wc ), and initial catalyst and other
supplies (C ca ).
(2.13)
TCR 5 TPI 1 C start 1 C wc 1 C ca
2.4.3 Operation and Maintenance Cost

The next important aspect of the financial analysis is the O&M cost. For
this, one has to know the technology and its characteristics. This will give
the overall efficiency of the plant if energy generation is the product or the
product mix and yield if chemical production is the goal. Table 2.4 gives a
comparison of energy efficiency of three means of power (electricity) gener-
ation from biomass.
For a gasification plant, especially those, which use the product gas for
fuel or chemical production, the composition of the product gas is important.
This depends on the feedstock as well as on the type of gasifier reactor used.
Table 2.6 presents a comparison of typical product gas composition for sev-
eral types of gasifiers.
Both operating and maintenance costs are made of two major
components:
1. Fixed cost
2. Variable cost.