A food processing plant is planning to reduce it energy consumption by installing a Combined Heat...
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A food processing plant is planning to reduce it energy consumption by installing a Combined Heat and Power (CHP) system. The plant consumes an average of 40 MWh of electrical and 90 MWh of thermal energy operating over 2760 hrs per year. The CHP system is to be powered with biogas produced by the plant's anaerobic digestion system which was installed to reduce waste. Table B.11 summarises: the annual energy inputs/output, to/from the CHP system, the cost of supplying the biogas, and the current retail price of electricity and natural gas. Table B.11 Energy input/output of CHP system, and current energy prices CHP energy input/output Biogas (input) Electricity energy (output) Thermal energy (output) MWh 158.7 44.16 96.6 Purchase and installation O&M Fuel biogas Table Q B.12 shows a summary of the financial cash flow for the project over a 5-year payback period. The summary assumes constant annual cashflows and discount rate of 3% i.e., 4.58 x Year 1 values. Cashflow NPV (Discount rate 3%) Prices Biogas Retail price of electricity Retail price of natural gas Table B.12 Cash flow summary Electricity (saved) Natural gas for heating (saved) Year 0 -£37,000 -37,000 £2,031 Sum of years 1-5 Question B.1 is continued on the next page... -1,012 -7,268 27,114 20,197 £/MWh 10 148 49 39,031 a) Using the Five Case Model as a framework, discuss the factors should be considered in preparing the technical and economic case for an outline business proposal for the project. [10 marks] A food processing plant is planning to reduce it energy consumption by installing a Combined Heat and Power (CHP) system. The plant consumes an average of 40 MWh of electrical and 90 MWh of thermal energy operating over 2760 hrs per year. The CHP system is to be powered with biogas produced by the plant's anaerobic digestion system which was installed to reduce waste. Table B.11 summarises: the annual energy inputs/output, to/from the CHP system, the cost of supplying the biogas, and the current retail price of electricity and natural gas. Table B.11 Energy input/output of CHP system, and current energy prices CHP energy input/output Biogas (input) Electricity energy (output) Thermal energy (output) MWh 158.7 44.16 96.6 Purchase and installation O&M Fuel biogas Table Q B.12 shows a summary of the financial cash flow for the project over a 5-year payback period. The summary assumes constant annual cashflows and discount rate of 3% i.e., 4.58 x Year 1 values. Cashflow NPV (Discount rate 3%) Prices Biogas Retail price of electricity Retail price of natural gas Table B.12 Cash flow summary Electricity (saved) Natural gas for heating (saved) Year 0 -£37,000 -37,000 £2,031 Sum of years 1-5 Question B.1 is continued on the next page... -1,012 -7,268 27,114 20,197 £/MWh 10 148 49 39,031 a) Using the Five Case Model as a framework, discuss the factors should be considered in preparing the technical and economic case for an outline business proposal for the project. [10 marks]
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There should be following factors considerd in technical and econom... View the full answer
Related Book For
Engineering Economic Analysis
ISBN: 9780195168075
9th Edition
Authors: Donald Newnan, Ted Eschanbach, Jerome Lavelle
Posted Date:
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