Page 179 - Sustainable On-Site CHP Systems Design, Construction, and Operations

152 T h e Fe a s i b i l i t y S t u d y

Discount rate 5%
Maintenance escalation rate 3%
Natural gas escalation rate 2%
Electric escalation rate 2%
Administration and permitting cost escalation rate 3%
TABLE 9-4 Sample LCC Calculation Assumed Economic Factors

Tables 9-4 to 9-6 provide a sample LCC calculation. Table 9-4 shows the economic fac-
tors assumed, Table 9-5 shows the annual costs, escalated year by year over the project life
and equated to the present worth, and Table 9-6 provides a resultant LCC calculation.
In sample calculation (Table 9-6), the total present cost is $37,850,000, which is the
sum of the $9,000,000 project cost and the $28,850,000 NPV of the annual costs.

Annual Costs
Administration Purchased
End of Maintenance and Permitting Fuel Electricity Total Annual Present
Year Cost ($) Costs ($) Cost ($) Cost ($) Costs ($) Worth ($)
1 400,000 30,000 1,200,000 300,000 1,930,000 1,840,000
2 412,000 31,000 1,224,000 306,000 1,973,000 1,790,000
3 424,000 32,000 1,248,000 312,000 2,016,000 1,740,000
4 437,000 33,000 1,273,000 318,000 2,061,000 1,700,000
5 450,000 34,000 1,298,000 324,000 2,106,000 1,650,000
6 464,000 35,000 1,324,000 330,000 2,153,000 1,610,000
7 478,000 36,000 1,350,000 337,000 2,201,000 1,560,000
8 492,000 37,000 1,377,000 344,000 2,250,000 1,520,000
9 507,000 38,000 1,405,000 351,000 2,301,000 1,480,000
10 522,000 39,000 1,433,000 358,000 2,352,000 1,440,000
11 538,000 40,000 1,462,000 365,000 2,405,000 1,410,000
12 554,000 41,000 1,491,000 372,000 2,458,000 1,370,000
13 571,000 42,000 1,521,000 379,000 2,513,000 1,330,000
14 588,000 43,000 1,551,000 387,000 2,569,000 1,300,000
15 606,000 44,000 1,582,000 395,000 2,627,000 1,260,000
16 624,000 45,000 1,614,000 403,000 2,686,000 1,230,000
17 643,000 46,000 1,646,000 411,000 2,746,000 1,200,000
18 662,000 47,000 1,679,000 419,000 2,807,000 1,170,000
19 682,000 48,000 1,713,000 427,000 2,870,000 1,140,000
20 702,000 49,000 1,747,000 436,000 2,934,000 1,110,000
Total 10,756,000 790,000 29,138,000 7,274,000 47,958,000 28,850,000

TABLE 9-5 Sample LCC Calculation Annual Costs