11.08.2015   ENERGY SERVICES IN THE HINDU KUSH HIMALAYAN REGION

ECONOMIC ANALYSIS Plant installation cost

Capital costs of biomass-based power plants vary widely from around 1000US$/kW to 4000 US$/kW depending on the technology used for electricity generation. The calculation of the installation-related components of the specific energy cost of a typical power plant is given here.

Economic parameters2 Real (Economic) discount rate Plant economic life Escalation

10 per cent 20 years Neglected

Calculation of specific cost Investment required Annual Plant Factor Energy output (in a 1 kW plant)

1500US$/kW 60 per cent

= 8760×0.6 = 5256 kWh

Present Worth Factor Present Value of energy output

= 8.51 (10% discount rate for 20 years) = 8.51 x 5256 = 44 728 kWh

Specific Cost component associated with power plant installation

= 1500/44 728 = 3.35 US cents/kWh

Fuel and maintenance cost

It is estimated that a land area of 0.5-1 ha is required per kilowatt of power plant capacity, with the power plant operating at an annual plant factor of 60 per cent. Assuming that the power plant operates at an average overall efficiency of 20 per cent, 1.2 kg of fuelwood is required to generate 1 kWh.

Cost of fuelwood

Cost of fuelwood at plantation

Cost of processing

Transport

Total

= 113.4US$/ton = 12US$/ton = 4US$/ton = 29.4 US$/ton

Rent for land Equivalent rent cost

= 32.3 US$/ha. year = 3.0 US$/ton of fuelwood

2 Inflation is not considered as the analysis is in constant currency. Taxes and duties are neglected in the economic analysis.

Total cost of fuelwood = 32.4 US$/ton

Cost of fuelwood = 3.88 US cents/kWh (at a consump­

tion rate of 1.2kg/kWh of electricity generated)