Biomass cogeneration plant investment details

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This form assists in determining the economic feasibility of investing in a biomass cogeneration plant. 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).

By default, the biomass cogeneration plant size is assumed to be such that its heat output is the same as the present boiler and the default capital cost is determined by the rule-of-thumb $4,000/kW_el, 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 17:19:25 New Zealand Daylight Time 2006