Exergoeconomic Analysis

LIST OF TABLES

Chapter 4: METHODOLOGY

4.3 Exergoeconomic Analysis

Exergoeconomics is a combination of exergy analysis and economic principles, which helps us understand how costs flow in a system and optimize system performance. The term exergoeconomics is to characterize a combination of exergy analysis with economic analysis when, in this combination, the exergy-costing principle will be used. In this way, a distinction can be made between exergoeconomic methods and applications on one side, and other numerous applications on the other side, in which results from a thermodynamic analysis (sometimes including an exergy analysis) and an economic analysis are presented (under the term thermoeconomic analysis) but without applying the exergy-costing principle.

Existing methods of exergoeconomic analysis and optimization of energy systems operate with single average or marginal cost values per exergy unit for each material stream in the system being considered. These costs do not contain detailed information on (a) how much exergy and (b) at what cost each exergy unit was supplied to the stream in the upstream processes. The cost of supplying exergy, however, might vary significantly from one process step to the other. Knowledge of the exergy addition and the corresponding cost at each previous step can be used to improve the costing process. This paper presents a new approach to exergy costing in exergoeconomics. The monetary flow rate associated with the thermal, mechanical, and chemical exergy of a material stream at a given state is calculated by

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considering the complete previous history of supplying and removing the corresponding exergy form units to and from the stream being considered. When exergy is supplied to a stream, the cost of adding each exergy unit to the stream is calculated using the cost of the product exergy unit for the processor device in which the exergy addition occurs. When the stream being considered supplies exergy to another exergy carrier, the last-in-first-out (LIFO) principle of accounting is used for the spent exergy units to calculate the cost of exergy supply to the carrier. The new approach eliminates the need for auxiliary assumptions in the exergoeconomic analysis of energy systems and improves the costing process's fairness by taking a closer look at both the cost-formation and the monetary-value-use processes. This closer look mainly includes the simultaneous consideration of the exergy and the corresponding monetary values added to or removed from a material stream in each process step. In general, the analysis becomes more complicated when the new approach is used instead of the previous exergoeconomic methods. The benefits of using the new approach, however, significantly outweigh the increased efforts. The new approach, combined with some other recent developments, makes exergoeconomics an objective methodology for analyzing and optimizing energy systems.

The objective of a thermoeconomic analysis shall be

1. to calculate separately the cost of each product generated by a system having more than one product,

2. to understand the cost formation process and the flow of costs in the system, 3. to optimize specific variables in a single component, or

4. to optimize the overall system.

For the evaluation of exergoeconomic analysis, here SPECO method will be used.

4.3.1 SPECO Method

The Specific exergy costing method (SPECO) consists of the following three steps. The first step is the identification of exergy streams. All material and energy streams cross the boundaries of the components being considered, which should be identified first. This is accomplished by inspection of the process flow diagram. The exergy streams associated with the entering and exiting material and energy streams are known from the exergy analysis. At this point, a decision must be made concerning whether the analysis of the components

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should be conducted using total exergy or separate forms of the total exergy of a material stream. Considering separate exergy forms usually improves the accuracy of the results.

However, this improvement is often marginal and unnecessary for extracting the main conclusions from the thermoeconomic evaluation.

The second step is the definition of fuel and product. In evaluating the performance of a component, it is, in general, meaningful and appropriate to operate with exergy differences associated with each material stream between inlet and outlet. Exergy differences (exergy additions to or removals from a stream) should be applied to all exergy streams associated with a change of physical exergy and some exergy streams associated with converting chemical exergy. In many cases involving conversion of chemical exergy (e.g., conversion of the chemical exergy of solid fuel into chemical and thermal exergy through a gasification process), the purpose of owning and operating the component dictates that the chemical exergy at the outlet is considered on the product side and the chemical exergy at the inlet on the fuel side.

The third step is writing the cost balances and auxiliary equations. Exergy costing usually involves cost balances formulated for each system component separately.

The steady-state form of control volume cost balance is:

∑𝑛 𝐶̇_{𝑗,𝑘,𝑖𝑛}̇

𝑗=1 + 𝑍̇_𝑘 = ∑^𝑚_𝑗=1𝐶̇_{𝑗,𝑘,𝑜𝑢𝑡} 4.5

The above equation states that the exiting exergy streams' total cost equals the total expenditure to obtain them: the cost of the entering exergy streams plus the capital and other costs. The total cost of a stream will be defined as:

𝐶̇_𝑗 = cj 𝐸_𝑗 4.6

The term cj in the above equation is the Levelized cost per unit of exergy. In analyzing a component, we may assume that the costs per exergy unit are known for all entering streams.

These costs are known from the components they exit or if a stream enters the overall system

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consisting of all components under consideration, from this stream's purchase cost.

Consequently, the unknown variables that need to be calculated with the aid of the cost balance for the kth component are the costs per unit exergy of the exiting streams. This is shown in the following Figure:

Figure 4.2: Schematic diagram of the SPECO Method Description.

In general, if Ne exergy streams are exiting the component being considered, we have Ne unknowns and only one equation, the cost balance. Therefore, we need to formulate Ne-1 auxiliary equations. This is accomplished with the aid of the F and P rules.

F- rules

The total cost associated with removing exergy must be equal to how the removed exergy supplied to the same stream in upstream components.

P- rules

Each exergy unit is supplied to any stream associated with the product at the same average cost.

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