-
8/8/2019 air conditioning (ch4)
1/9
105
ChapterFour
EconomicalAnalysis
-
8/8/2019 air conditioning (ch4)
2/9
106
(4-1) Cost analysis
The costs of an enterprise are divided into major groups and
they are:
1- Capital cost: incurred once during the life of the
system.
They include: purchase, and installation of equipment.
2- Investment charges, (fixed charges): incurred annually.
Investments charges are divided into the major following
groups:
B- Investment:
The owner of the building can invest the money used for system
equipments in some
other enterprise and earn from it. It follows that this system
must show prospects of yielding on
an equivalent return.
C- Depreciation and amortization:
Depreciation is a decrease in the value of a capital asset (a
piece of equipment, a building,
a vehicle, etc.) over the time that the asset is being used.
System depreciation is due to:
a- Life of enterprise.b- Life of equipment.c- Requirements of
public authorities.d- Inadequacy of equipmente- Obsolescence of
equipment.
D- Taxes:
There are Taxes on the land, upon which the building stands, on
equipments, income, etc...
-
8/8/2019 air conditioning (ch4)
3/9
107
E- Insurance:
There is insurance against, accidents and persons.
3- Annual operating cost:
A- Fuel: fuel cost varies with the amount of energy (heating)
needed.
B- Electrical Energy: cost varies with the amount of energy
(cooling) needed.
C- Maintenance: include the cost of necessary material and
labors.
D- Supplies: Include of items not falling under fuel and
maintenance. Such as (tools, water,
chemicals, etc).
E- Supervision: consultants, chief engineer, etc..)
F- Operating Taxes: they depend on the magnitude of output
rather than the size of investment.
-
8/8/2019 air conditioning (ch4)
4/9
108
(4.2)Total Annual cost method
Cf= Annual fixed costs.
Co = Annual operating costs.
PFCRCf (4-1)
Where:
FCR: fixed charge rate
jt
iiiFCRn
11
(4-2)
Where:
i: interest rate:
n: life time (years).
t: taxes
j: insurance.
Investment (P) increases with the higher building efficiency,
which gives lower energy cost.
Higher capital cost for more efficient building,Whereas:
insurance and taxes increase too.
Total annual cost (C).
of CCC (4-3)
-
8/8/2019 air conditioning (ch4)
5/9
109
(4.3)Assumptions
Life of enterprise = 20 year
180 day / year heating seasons 180 day / year cooling seasons
16hour / day operation Interest rate = 10% Insurance = 0.2 %
Installed costs exceeds original estimation by 20% Maintenance
contributes 5 % Supplies contribute 2% Supervision contribute 2%
Diesel price=1$/liter Electricity price=0.6 $/kWh
Maintenance =0.05 P = $ /year
Suppliers= 0.02 P = $ /year
Supervision= 0.02 P = $ /year
-
8/8/2019 air conditioning (ch4)
6/9
110
(4-3-1)Analysis for Base Case
A. Fixed cost (Cf)P=Equipment price x 1.2
P= 266,000 1.2 = 319,200 $
FCR = i +i
(1 + i)n 1+ t + j
FCR=0.1 +0.1
(1+0.1)201+ 0 + 0.002 = 11.9%
Cf = 319,200 x 0.119 = 37,985 $/year
B .Operating cost (Co)
Co = [Fuel + Electricity + Maintenance + Suppliers]
1. Fuel annual cost Hot water boiler
V
Diesel =
290kW
0.870x45900x0.93 x16hrx60mint. x60 sec. =449.8 l/day
Annual fuel cost =449.8
180
1
$
= 80964 $/
Steam boileran = 46.8
360
1
$
= 16848$/
Total fuel operating cost = 97812 $/year
-
8/8/2019 air conditioning (ch4)
7/9
111
2. Electricity annual cost Chiller
Nominal power input=108kW
annual electricity cost = 108kWx16hr
dayx180
day
yearx0.15
$
kWh= 46656
$
year
Air handling unitsannual electricity cost = 100kWx16
hr
dayx360
day
yearx0.15
$
kWh= 86,400
$
year
Pumpsannual electricity cost = 3kWx16
hr
dayx360
day
yearx0.15
$
kWh= 2592
$
year
Exhaust fansannual electricity cost = 6.75kWx16
hr
dayx360
day
yearx0.15
$
kWh= 5,832
$
year
LightsAnnual electricity cost = 44,308
$
year
Total Annual Electricity Cost =185,788$/year.
3. Maintenance= 15,960 $/year.
4. Supplies=6,384 $/year
5. Supervision = 6,384 $/year
Co=312,328 $/year
C= 312,328 +37,985= 350,313 $/year
-
8/8/2019 air conditioning (ch4)
8/9
112
B. (4-3-1)Analysis for improved CaseC.D.
Fixed cost (Cf)P = Equipment price 1.2
P = 318,296 1.2 = 381,955 $
FCR = i +i
(1 + i)n 1+ t + j
FCR = 0.1 +0.1
(1+0.1)201+ 0 + 0.002 = 11.9%
Cf= 381,955 0.119 = 45,453 $/year
B .Operating cost (Co)
Co = [Fuel + Electricity + Maintenance + Suppliers]
3. Fuel annual cost Hot water boiler
V Diesel =250kW
0.870x45900x0.93 16 60. 60 . =387.7 l/day
Annual fuel cost =387l
dayx180
day
yearx1
$
l= 69795$/year
incineratorannual fuel cost = 7
360
day
year 1
$
= 2520$/year
Total fuel operating cost = 72,315 $/year
Electricity annual cost Chiller
-
8/8/2019 air conditioning (ch4)
9/9
113
Nominal power input=97kW
annual electricity cost = 97kW 16hr
day 180
day
year 0.15
$
kWh= 41,904
$
year
Air handling unitsannual electricity cost = 80kW 16
hr
day 360
day
year 0.15
$
kWh= 69120
$
year
Pumpsannual electricity cost = 3kW 16
hr
day 360
day
year 0.15
$
kWh= 2592
$
year
Exhaust fansannual electricity cost = 6.75kW 16
hr
day 360
day
year 0.15
$
kWh= 5832
$
year
Lightingannual electricity cost = 11077$/year
Total Annual Electricity Cost =130,525 $/year
3. Maintenance= 19,098 $/year.
4. Supplies= 7,639 $/year
5. Supervision = 7,639 $/year
Co = 237,216 $/year
C = 45,453+ 237,216 = 282,669 $/year
Payback period=
=
,,
,,=
,
,= .
