Energy Recovery Potential from Effluents in the Process Industry: System Dynamics Modeling and Techno-Economic Assessments
Abstract
:1. Introduction
1.1. Process Industry: Economic Importance and Effluent Generation in Food and Beverage Production
1.2. Techno-Economic Assessment of Energy Recovery Potential from Effluents
2. Concept, Materials, and Methodology
- In the discounted cash flow or net present value (NPV) method, the method determines the net present value of all cash flows by discounting them by the required rate of return (also known as the hurdle rate, cutoff rate, and similar terms), as follows:In Equation (9a) [42]:NPV is the net present value;Rt is the net cash inflow–outflows during a single period, t;i is the discount rate or return that could be earned in alternative investments;t is the number of time periods.
- The internal rate of return (IRR) is a metric used in financial analysis to estimate the profitability of potential investments. IRR is a discount rate that makes the net present value (NPV) of all cash flows equal to zero in a discounted cash flow analysis. It should be noted that IRR calculations rely on the same formula as NPV, where the annual return makes the NPV equal to zero. Generally speaking, the higher an IRR, the more desirable an investment is to undertake. Being uniform for varying project types, IRR can be used to rank multiple prospective investments or projects on a relatively even basis. In general, when comparing investment options with other similar characteristics, the investment with the highest IRR would probably be considered the best.In Equation (9b) [42]:C is cash flow at time t;IRR is the discount rate/internal rate of return, expressed as a decimal;T is the time period.To include the impact of inflation (or deflation) m where pt is the predicted rate of inflation during period n, we have Equation (9c) [42]:
- Profitability index, also known as the benefit-cost ratio, this index is the net present value of all future expected cash flows divided by the initial cash investment. (Some firms do not discount the cash flows in making this calculation.) If this ratio is greater than 1.0, the project may be accepted for Equation (10) [41]:
- Return on investment (ROI) is a performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of a number of different investments. ROI tries to directly measure the amount of return on a particular investment, relative to the investment’s cost. To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment. The result is expressed as a percentage or a ratio in Equation (11) [42]:
- The payback period for a project is the initial fixed investment in the project divided by the estimated annual net cash inflows from the project. The ratio of these quantities is the number of years required for the project to repay its initial fixed investment. This method assumes that the cash inflows will persist for at least long enough to pay back the investment, and it ignores any cash inflows beyond the payback period. The method also serves as an (inadequate) proxy for risk. The faster the investment is recovered, the less the risk to which the firm is exposed, as in Equation (12):
3. Findings and Analysis
Limitations of the Study
4. Conclusions and Recommendations
Supplementary Materials
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Acknowledgments
Conflicts of Interest
References
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Effluents Production from | Amount (m3/day) |
---|---|
Cassava flakes | 9554 |
Beer from un-malted grain and barley | 4805.77 |
Sugar refining | 2767.67 |
Source of Effluents | Average Daily Heat Generation Potential (kWh/day) | Average Daily Electricity Generation Potential (kWh/day) | Total Avoided Emissions Yearly (tCO2eq) |
---|---|---|---|
Malted Grains | 127,924.80 | 27,648.89 | 17,264.55 |
Cassava | 254,311.00 | 54,965.20 | 34,321.36 |
Sugar | 73,657.78 | 15,919.94 | 9940.76 |
All effluents | 455,893.58 | 98,534.03 | 61,526.67 |
Turbine Type | Reciprocating Engine (RE) | Gas Turbine (GT) | Micro Turbine (MT) | Fuel Cell |
---|---|---|---|---|
Project Indicators | ||||
Power Generating Capacity needed (MW) | 5.2 | 5.2 | 5.2 | 2.0 |
Levelised Cost of Energy (LCE) ($/kWh) | 0.06 | 0.07 | 0.08 | 0.09 |
Project Type Economic and Financial Indicators | Reciprocating Engine (RE) | Gas Turbine (GT) | Micro Turbine (MT) | Fuel Cell |
---|---|---|---|---|
NPV of profit margin (millions of dollars) | 7.9 | 6.79 | 3.59 | 2.42 |
ROI (%) | 46 | 41 | 16 | 10 |
IRR (%) | 45 | 36 | 34 | 32 |
Payback period (years) | 6.09 | 6.63 | 8.09 | 7.69 |
Profitability index (cost-benefit ratio) | 1.50 | 1.39 | 1.17 | 1.12 |
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Adepoju, T.D.; Momodu, A.S.; Ogundari, I.O.; Akarakiri, J. Energy Recovery Potential from Effluents in the Process Industry: System Dynamics Modeling and Techno-Economic Assessments. Fuels 2022, 3, 627-641. https://doi.org/10.3390/fuels3040038
Adepoju TD, Momodu AS, Ogundari IO, Akarakiri J. Energy Recovery Potential from Effluents in the Process Industry: System Dynamics Modeling and Techno-Economic Assessments. Fuels. 2022; 3(4):627-641. https://doi.org/10.3390/fuels3040038
Chicago/Turabian StyleAdepoju, Tofunmi D., Abiodun S. Momodu, Ibikunle O. Ogundari, and Joshua Akarakiri. 2022. "Energy Recovery Potential from Effluents in the Process Industry: System Dynamics Modeling and Techno-Economic Assessments" Fuels 3, no. 4: 627-641. https://doi.org/10.3390/fuels3040038