Abstract
Capital investment, next to the product demand, sales, and production costs, is one of the
key metrics commonly used for project evaluation and feasibility assessment. Estimating
the investment costs of a new product/process alternative during early-stage design is
a challenging task, which is especially relevant in biorefinery research where information
about new technologies and experience with new technologies is limited. A systematic
methodology for uncertainty analysis of cost data is proposed that employs: (a) bootstrapping
as a regression method when cost data are available; and, (b) the Monte Carlo
technique as an error propagation method based on expert input when cost data are not
available. Four well-known models for early-stage cost estimation are reviewed and analyzed
using the methodology. The significance of uncertainties of cost data for early-stage
process design is highlighted using the synthesis and design of a biorefinery as a case
study. The impact of uncertainties in cost estimation on the identification of optimal processing
paths is indeed found to be profound. To tackle this challenge, a comprehensive
techno-economic risk analysis framework is presented to enable robust decision-making
under uncertainties. One of the results using order-of-magnitude estimates shows that
the production of diethyl ether and 1,3-butadiene are the most promising with the lowest
economic risks (among the alternatives considered) of 0.24 MM$/a and 4.6 MM$/a,
respectively.
Original language | English |
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Article number | 3 |
Journal | Frontiers in Energy Research |
Volume | 3 |
Number of pages | 13 |
ISSN | 2296-598X |
DOIs | |
Publication status | Published - 2015 |
Bibliographical note
This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.Keywords
- Early-stage cost
- Estimation
- Biorefinery
- Process synthesis and design
- Superstructure optimization
- MINLP
- Bioethanol-upgrading
- Uncertainty analysis