Biomass boiler investment details

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This form assists in determining the economic feasibility of investing in a biomass boiler. This can be compared with either business as normal (leave Present Boiler Replacement Cost field empty) or investing in a replacement for the present boiler (enter a price in the Present Boiler Replacement Cost field).

The default biomass boiler size is the same as the present boiler and the default capital cost is determined by the rule-of-thumb $150,000/MW_th, these values should be updated to site-specific values if available.

There are a large number of simplifying assumptions underlying this calculation so it should be used only as an indication and as a starting point for a more in-depth study.

The economic feasibility is assessed in terms of:

Net Present Value (NPV)

-if positive indicates that the required rate of return in achieved over the project lifetime.

Internal Rate of Return (IRR)

-actual rate of return

Payback Period (PP)

-number of years before investment cost is recuperated

The formula for these quantities is given by:

where

I:	Biomass Boiler Capital Cost minus Present Boiler Replacement Cost (if entered)
Q:	Annual saving from using biomass
n:	Project lifetime
k:	Minimum attractive rate of return

Last modified: Thu Dec 14 17:18:36 New Zealand Daylight Time 2006