Chemical Engineering Journal 171 (2011) 986–996

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Chemical Engineering Journal

journal homepage: www.elsevier.com/locate/cej

Techno-economic performance analysis of energy production from biomass at

different scales in the UK context
C. Patel a , P. Lettieri a,∗ , S.J.R. Simons a , A. Germanà b
a
Department of Chemical Engineering, University College London, London WC1E7JE, UK
b
Germanà & Partners Consultant Engineers, Via Badoero 67, Roma, Italy

a r t i c l e i n f o a b s t r a c t

Article history: This paper compares the results of a techno-economic performance analysis of three combustion plants
Received 16 September 2010 for the recovery of energy from three types of biomass: solid recovered fuel (SRF), forestry waste wood
Received in revised form 2 February 2011 chips (FWWC), and crude rape seed oil (RSO). Small and medium scale plants have been investigated,
Accepted 22 April 2011
50 kilo tonnes per annum (ktpa) and 160 ktpa combustion plants utilising FWWC, 50 ktpa and 100 ktpa
plants treating SRF, and an internal combustion engine plant at 27 ktpa and 40 ktpa utilising RSO. The
Keywords:
technical assessment includes calculations for electricity generation, heat produced and overall system
Waste biomass
efficiency. The economic viability of the different processes is investigated through a discounted cash
Rapeseed oil
Combustion
flow analysis. The levelised cost is used to calculate the cost of production of one unit of electricity. The
Techno-economic analysis effect of changing model input parameters on the economic performance is evaluated. Seven different
system variables have been chosen and the effect of a ±10% change on the levelised cost has been exam-
ined. The results showed that the levelised cost of the SRF plant is mainly affected by calorific value,
turbine efficiency, capital and operating costs. The parameters which affect the FWWC biomass plant are
the calorific value, steam turbine efficiency, capital and operating costs. Whereas, parameters affecting
the RSO biomass plant are the calorific value, engine efficiency, capital and operating costs. A techno-
economic analysis of the plants indicates the SRF plant is economical at both scales. The RSO plant and
the FWWC plant are only economical at the medium scales investigated. The 40 ktpa RSO plant is found
to be the most efficient one at 52% compared with 28% efficiency for the SRF plant, it is also the most
economically viable option with a 25% IRR compared to 17% IRR for the FWWC plant, and 10% IRR for the
SRF plant.
© 2011 Elsevier B.V. All rights reserved.

1. Introduction order to reduce the amount of CO2 released to the atmosphere, we

Global warming is the increase in average temperature of the
Earths surface, air and oceans. As a result, increases in flooding, ice
caps melting, climate change, and changes in animal habitat have
been reported. The Intergovernmental Panel on Climate Change
(IPCC) [1] concluded that the increase of greenhouse gas concen-
trations is the result of human activities, such as fossil fuel burning
and deforestation [2].
The Department of Energy and Climate Change (DECC) reported
that emissions fell from 483 MtCO2 to 431 MtCO2 between 2008
and 2009, where, power stations are the largest single contributor
(151 MtCO2 ) [3]. Over the years, CO2 and other greenhouse gases,
such as methane and ozone, have resulted in global warming [4].
Other by-products of fossil fuel combustion include sulphur oxides
and nitrogen oxides, both of which contribute to acid rain [5]. In
∗ Corresponding author. Tel.: +44 020 7679 7867; fax: +44 020 7383 2348.
E-mail address: p.lettieri@ucl.ac.uk (P. Lettieri).
are to act now by using renewable forms of energy to lower our
emission of fossil carbon into the atmosphere and help the overall
balance of carbon in the atmosphere in an economically attractive
manner.
95% of the current overall demand of UK energy (220 million
tonnes of oil equivalent) is derived from fossil fuel resources [3,4].
DECC is responsible for ensuring the UK continues to enjoy secure
and competitively priced energy. The UK is importing energy and
competition for energy resources can make prices volatile. In 2008,
a spike in oil prices demonstrated the extent of the fluctuations
in prices for energy and fuel [6]. The UK energy mix includes ten
nuclear power stations consisting of 19 operating reactors which
supply 18% of the electricity generated [7]. In 2009, the UK coal sup-
ply amounted to 48 Mt with 38 Mt being transformed to electricity
[8]. Oil and gas remain vital parts of the UK energy mix. Both of these
fossil fuels are used to produce electricity. In 2009, the UK supply of
primary oil was 75 Mt [9]. In 2009, the UK supply of natural gas was
1,000,000 GWh with 350,000 GWh being transformed to electricity
[10]. In the near future, fossil fuels will remain a dependant source

1385-8947/$ – see front matter © 2011 Elsevier B.V. All rights reserved.
doi:10.1016/j.cej.2011.04.049
 C. Patel et al. / Chemical Engineering Journal 171 (2011) 986–996 987

Air
Flue gas

Solid Fluidised bed Heat recovery Flue gas Exhaust

Biomass combustion boiler treatment gas

Steam/ water

Bottom ash Steam turbine Fly residues

Electricity

Fig. 1. Energy recovery from solid biomass utilising fluidised bed combustion technology.

Organic Rankin
Chimney exhaust gas Cycle System 1

Diesel engine DeNox Heat Exchanger

Rapeseed
oil Diesel engine DeNox Heat Exchanger

Diesel engine DeNox Heat Exchanger

Organic Rankin Cycle System 2

Heat produced at these

sites are sold for a revenue

Fig. 2. Energy recovery from crude rapeseed oil biomass in internal combustion engines.

of UK energy. However, an increase in renewable energy is required climate change at the Copenhagen Climate Change Summit in 2009,
to meet our UK target and help reduce climate change. Therefore, by encouraging a global agreement on reducing climate change.
the future supply of UK energy is associated with the economy and The result of the Copenhagen Summit was the signing of the so-
the need to accelerate a move towards low-carbon energy secu- called Accord, which emphasised that deeper cuts in climate change
rity [6]. Climate change is an issue which encompasses finance and are to be achieved, adaptation to adverse effects of climate change
economic as well as energy and environmental ministries [11]. and funding issues must be achieved in order to reduce climate
The UK Government targeted an 80% reduction in carbon emis- change; unfortunately, no quantitative goals were stated in the
sions by the year 2050 compared to those emitted in 1990. A 12.5% Accord.
reduction by the year 2012 [12] was introduced in 2002. The UK Reducing our greenhouse gas output can be achieved by using
further showed its continued commitment and concern towards other feed sources rather than fossil fuels, such as biomass. Biomass

Sensitivity analysis results for FWWC fluidised bed combustion plant

economic assessment at 160 ktpa
Percentage change in levelised cost

60
50 plus 10% minus 10%
40
30
20
(%)

10
0
-10
-20
e
cy

-30
st s

at e
lue

tim
rat
ien

co
va

dr
nt

lif e
ff ic

ee
if ic

ing
ou

sf
nt
ee
l or

sc

rat
Pla

as
in

Di
Ca

om
Op
rb
tu

Bi
m
ea

Input parameter
St

Fig. 3. Sensitivity analysis results for FWWC fluidised bed combustion plant economic assessment at 160 ktpa.
988 C. Patel et al. / Chemical Engineering Journal 171 (2011) 986–996

Sensitivity analysis for SRF fluidised bed combustion plant economic

assessment at 100 ktpa
60

Percentage change in levelised cost

50
plus 10% minus 10%
40
30
20
10
(%)
0
-10
-20

s
rate
e

ime

rate
ncy
-30

cost
valu

life t
ie

ount

feed
effic

g
rific

ratin
t
Disc

Plan

ass
Calo

ine

Ope

Biom
m turb
Input parameter
Stea

Fig. 4. Sensitivity analysis results for SRF fluidised bed combustion plant economic assessment at 100 ktpa.

Sensitivity analysis for RSO internal combustion engine plant economic

assessment at 40 ktpa
15
plus 10% minus 10%
Percentage change in levelised cost (%)

10

0
ti me

costs

-5
te
alue

cy

rate
ed r a
ien
rif ic v

ount
t lif e
e effic

t ing

ass fe
Plan

Disc

-10
Calo

a
Oper
Engin

B iom

Input parameter

Fig. 5. Sensitivity analysis for RSO internal combustion engine plant economic assessment at 40 ktpa.

Sensitivity analysis of changes in capital costs ± 30% for FWWC, SRF, and
RSO plants

25
plus 30% minus 30%
20
Percentage cgange in levelised

15

10

5
cost (%)

-5

-10 FWWC SRF RSO

-15

-20

-25
Plant

Fig. 6. Sensitivity analysis of changes in capital cost ±30% for FWWC, SRF, and RSO plants.
 C. Patel et al. / Chemical Engineering Journal 171 (2011) 986–996 989

Sensitivity analysis of changes in electricity price for 160 ktpa

FWWC plant
80

Percentage change in IRR (%)

60

40

20

-20

-40

10%

20%

30%

40%

50%
0%

0%

0%

0%

0%
us 1

us 2

us 3

us 4

us 5
-60
plus

pl us

p lus

pl us

pl u s
m in

m in

min

m in

m in
-80
Percentage change in electricity price (%)

Fig. 7. Effects of percentage change in IRR from percentage changes in electricity selling price for 160 ktpa FWWC.

Sensitivity analysis of changes in ROC prices for 160 ktpa FWWC

plant

150
Percentage change in IRR (%)

100

50

-50
10%

20%

30%

40%

50%
0%

0%

0%

0%

0%
-100
us 1

us 2

us 3

us 4

us 5
pl us

pl us

pl us

pl us

pl us
min

min

min

min

m in
-150
Percentage change in ROC (%)

Fig. 8. Effects of percentage change in IRR from percentage changes in ROC selling price for 160 ktpa FWWC plant.

for energy is plant or animal based material. The carbon used to able Obligation scheme and sourcing and additional £4 billion from
produce biomass is absorbed from the atmosphere as CO2 by plant the European Investment Bank for renewable energy, enabling
life, using energy from the sun [13]. secure financial loans for deployment [15]. Our current energy
Renewable energy is a vital component of the UK energy mix, demands are however high (220 million tonnes of oil equivalent),
where the Renewable Energy Strategy set a UK target to source resulting in large quantities of biomass needed to displace fossil
15% of our energy (electricity, heat and transport) from renewable fuels [16] thus, for a long term solution to meet our energy needs,
sources by 2020 [14]. The UK government is encouraging this by a variety of biomass sources as we as all renewable energy sources
keeping investors interested in bio energy by extending the Renew- (e.g. wind, wave, solar, etc.) will need to be utilised for energy pro-

Sensitivity analysis of changes in electrcity prices for 100 ktpa SRF

plant

80
Percentage change in IRR (%)

60

40

20

-20
10%

20%

30%

40%

50%
10%

20%

30%

40%

50%

-40
us

us

us

us

us
plus

plus

plus

plus

plus

-60
mi n

mi n

mi n

mi n

mi n

-80
Percentage change in electricity price (%)

Fig. 9. Effects of percentage change in IRR from percentage changes in electricity selling price for 100 ktpa SRF plant.
990 C. Patel et al. / Chemical Engineering Journal 171 (2011) 986–996

Sensitivity analysis of changes in electricity price for 40 ktpa RSO

plant

100

Percentage change in IRR

80
60
40
20

(%)
0
-20
-40

20%

30%

40%

50%
10%

20%

30%

40%

50%
-60

s 10
-80

us

us

us

us
plu s

plu s

plu s

plu s

s
u

plu
min

min

min

min

min
-100

Percentage change in electricity price (%)

Fig. 10. Effects of percentage change in IRR from percentage changes in electricity selling price for 40 ktpa RSO plant.

duction. The former would result in the development of a biofuel biomass; it has shown great potential for the production of energy
economy [17]. in the UK as it is grown as a break crop by farmers [19]. RSO is
This work investigates forestry waste wood chip (FWWC) generally used to produce bio-diesel for use in vehicles using ester-
combustion at 50 ktpa and 160 ktpa, solid recovered fuel (SRF) com- ification technology. However, this liquid form of biomass can be
bustion at 50 ktpa and 100 ktpa, and rapeseed oil (RSO) utilised utilised in energy production for our ever increasing need to heat
in internal combustion engines at 27 ktpa and 40 ktpa. The work and light buildings. Wartsila produce stationary plants utilising
investigates process design based on energy conversion efficien- internal combustion engines for energy production using vegetable
cies, and economics. The three types of biomass chosen represent oils such as RSO [20]. With a high calorific value and higher engine
viable options for energy production in the UK. Although they dif- efficiency, RSO is an attractive form of biomass for energy pro-
fer in terms of processing and physical state, their utilisation can duction especially when renewable heat and electricity targets
help reduce our emissions and contribute towards a bio fuel econ- are ever increasingly higher then that of transport fuel. By 2020,
omy. SRF is a large source of biomass having high calorific value and 10% of transport demand is to be sourced from renewables com-
provides a source of revenue via the gate fees. SRF is mechanically pared with 30% of electricity demand. In 2008, the UK produced
treated municipal solid waste (MSW) resulting in a high calorific 1973 kt of rapeseed compared to 1157 kt in 2000. However, it is
value fuel consisting mainly of organic components from house- a product that must be grown and subsequently used in energy
holds and industry. MSW household and industrial is collected by production; as a result it has a high purchase cost [21]. FWWC has
local authorities. The UK produces around 29 mtpa of MSW of which shown potential in terms of quantity (approximately 4.8–5.7 mil-
the majority is sent to landfill. SRF is made of a mixed waste stream lion tonnes of oil equivalent) for energy production, the majority of
resulting in the production of large amounts of chlorine, sulphur, which is currently sent to landfill. With growing taxation on landfill,
and NOx, whose cost of cleaning in the gas neutralisation process FWWC and SRF can be utilised to produce energy using combustion
has to be taken into account. technology.
FWWC is a clean source of biomass and can be used directly The aim of this study is to evaluate the technical and economical
in combustion, however it has a purchase cost which can affect performance of energy from the combustion of the three different
the economics of the scenario [18]. RSO is also a clean source of types of biomass at different scales. A technical and economical per-

Sensitivity analysis of changes in ROC prices for 40 ktpa RSO plant

150
Percentage change in IRR (%)

100

50

-50
10 %

20 %

30 %

40 %

50 %
10 %

20 %

30 %

40 %

50 %
s

-100
plu s

plu s

plu s

plu s

plu s
minu

minu

minu

minu

minu

-150
Percentage change in ROC price (%)

Fig. 11. Effects of percentage change in IRR from percentage changes in ROC selling price for 40 ktpa RSO plant.
 C. Patel et al. / Chemical Engineering Journal 171 (2011) 986–996
formance of six different scenarios for energy recovery from FWWC,
SRF, and RSO, is presented in terms of process efficiencies and costs.
The methodology used is presented in the following section.
2. Methodology
This work aims to gain an understanding of the design method-
ologies and engineering principles applied in the design of real
industrial energy recovery plants. The methodology includes cal-
culations for electricity generation and plant efficiency as well as
the economic evaluation through a discounted cash flow analysis.
Six different plant scales were investigated:
1. Fluidised bed combustion utilising 50 ktpa of SRF coupled with
a steam turbine at 17 MW.
2. Fluidised bed combustion utilising 100 ktpa of SRF coupled with
a steam turbine 29 MW.
3. Fluidised bed combustion utilising 50 ktpa of FWWC coupled
with a steam turbine 17 MW.
4. Fluidised bed combustion utilising 160 ktpa of FWWC coupled
with a steam turbine 39 MW.
5. Internal combustion engine utilising 27 ktpa of RSO with heat
recovery using organic rankine cycle (ORC) technology 31 MW.
6. Internal combustion engine utilising 40 ktpa of RSO with heat
recovery using ORC technology 42 MW.
The large scale plants investigated correspond to real life plants
under construction in Italy. These plants were then scaled down
to investigate whether they would be technically and economi-
cally viable at smaller scales. The internal combustion engine plant
was scaled down from three to two engines resulting in the use of
27 ktpa of crude RSO, whilst the FWWC and SRF plants were scaled
down to 50 kpta, which was chosen as a suitable scale based on
previous work conducted by Yassin et al. [22]. A flow chart for the
fluidised bed combustion plants is shown in Fig. 1, whereas the flow
chart for the internal combustion engine plants is shown in Fig. 2.
2.1. Proximate and ultimate analysis of biomass
The biomass characteristics used for developing the technical
model for this work were provide by Germanà & Partners Consult-
ing Engineers [23], these are summarised in Table 1. The proximate
analysis shows the moisture content, combustibles and inerts con-
tent of the biomass used, as well as their low heating value (LHV)
(kJ/kg). The ultimate analysis gives the elemental composition on
a dry basis in terms of carbon, hydrogen, oxygen, nitrogen, sulphur
and chlorine.
The internal combustion engine plant is run on RSO of specific
characteristics which are compliant with limits for biofuel charac-
teristics specified by Wartsila [20]. If a non conventional fuel is used,
the engine may not operate efficiently and could suffer from corro-
sion especially if fuels that have high acid numbers (mg KOH/g) are
used. This would in turn affect the maintenance costs (see Table 3).
3. Technical analysis – overall system efficiency
calculations
Performing energy calculations enable the assessment of the
technical performance of the different technologies by determin-
ing their overall system efficiencies. These are defined as the ratio
of the net generated electricity to the energy input to the system,
see Eq. (1):
Net power output [MW]
Overall efficiency = × 100
Energy input to the system [MW]
991
For the fluidised bed combustion plants, the energy input to the
system is given by the thermal capacity of the biomass, Eth , see Eq.
(2):
Eth [MWth] = LHV [kJ/kg] · m [kg/h] (2)
where LHV is the calorific value of the biomass and m is the biomass
feed rate.
The net power output is the net electricity generated
Eelectricity, net which is given by:
Eelectricity,net [MWe] = Eelectricity,gross − Eauxiliary (3)
Gross electricity generated = Eelectricity,gross [MWe]
= steam turbine · Eth (4)
where the gross electrical generation efficiency of the steam turbine
steam turbine = 30% (given by Germanà & Partners [23]); the auxiliary
consumption Eauxiliary is fixed at 1 MWe (given by Germanà & Part-
ners [23]). These are standard values used in industrial scale plants
of this type.
For the internal combustion diesel engine plant, the total energy
output is given by the heat + electricity produced. The heat is gen-
erated through the ORC unit and it is calculated as follows:
Heat generated = Hgenerated [MWth]
= diathermic oil turbine (%) · Oth [MWth] (5)
where diathermic oil turbine = 80% and Oth is thermal capacity of
organic fluid 24 MWth (given by Germanà & Partners [23]). These
are standard values for turbine efficiency and thermal capacity of
organic fluid.
Each engine generates 8 MW of electricity according to Wartsila
specifications [20].
The thermal capacity of the rapeseed oil, Rth , is calculated as
follows:
Thermal capacity of rapeseed oil = Rth [MWth] = LHV [kJ/kg] · m [kg/h](6)
where LHV is the calorific value of the rapeseed oil and m is the
rapeseed oil feed rate.
The overall system efficiency for the internal combustion engine
plant is calculated as follows:
Overall system efficiency (%)
Hgenerated [MWth] + Egenerated [MWe]
= × 100 (7)
Rth [MWth]
where Egenerated is the amount of electricity generated by the
engines.
3.1. Economic analysis
The economic viability is calculated using a discounted cash
flow analysis. This relates the values of costs and revenues that
occur over the economic life of the project in terms of present
value, i.e. the amount that a future sum of money is worth today
given a specified rate of return. Standardised financial tools, such
as the net present value (NPV) and internal rate of return (IRR),
were employed to assess the profitability of the different options.
The costs and revenues resulting from the economic evaluation are
indicative values and can be used to compare the different treat-
ment options since a consistent methodology has been adopted
for this comparative analysis. However, such costs and revenues
will depend on suppliers, plant scale, technology used and type of
(1)
energy recovery system employed, as well as local area factors.
992 C. Patel et al. / Chemical Engineering Journal 171 (2011) 986–996
Table 1
Proximate and ultimate analysis of the biomass.
Biomass type Proximate analysis
Moisture (%) (based on wt%) Combustibles (%) Inerts (%)
FWWC 30 62.50 7.50
SRF 15.8 64.20 20
RSO – 100 – 37,000
3.2. Capital costs
The capital needed to supply the necessary manufacturing and
plant facilities is known as the fixed capital investment or capital
costs [24]. The capital costs for the six biomass plants are shown
in Table 3, where detailed costs for the FWWC and RSO plants
are provided. The costs of the SRF plants were taken from Yassin
et al. [22]. All cost data are updated and reported in (D ), using
appropriate indices from the Office for National Statistics (ONS).
The capital costs reported in this study represent the total plant
costs (TPC), which cover main equipment costs (EC), direct plant
costs (DPC) and indirect plant costs (IPC). The main equipment
costs cover waste and residue storage and transport systems; com-
bustion/internal combustion engine system with heat exchanger
network; gas cleaning system; energy generation system.
Direct costs include costing for piping, auxiliary systems and ser-
vices, electrical, instrumentation and control and civil work, whilst
indirect costs constitute engineering and supervision, contingency
and contractor fee. The model excludes grid connection costs, waste
collection costs and revenues from material recycling prior to ther-
mal treatment.
The main equipment and direct costs are obtained from pre-
vious working experiences and contracts by Germanà & Partners,
whereas the indirect costs are obtained by factorial estimation
using cost factors published by Gerrard and Peters & Timmerhaus
and are summarised in Table 3 [28,29]. Where the cost data are
unavailable, Eq. (9) is used, which gives the general relationship
between costs and scale:
C
 S n
= (8)
Cr Sr
where C is the cost of the proposed plant at scale S, which is in terms
of the amount of biomass treated; Cr is the cost of the reference
plant at scale Sr and n is the scale exponent. The scale exponent,
n, is derived from historical data for similar plants and is usually
in the range of 0.4–0.8, typically 0.65 [25] is used, as done in this
study.
3.3. Operating costs
The operating costs to run the plant include raw materials,
labour, electrical energy consumed, maintenance, materials con-
sumed (chemicals, etc.), consultant services, general insurance,
expenses, local tax, unforeseen expenses and ash disposal.
These costs are calculated by taking a percentage of the fixed
capital cost. Operating costs for the six biomass plants are shown in
Table 3, where detailed costs were provided by Germanà & Partners
[23] on the basis of their previous experience.
Local tax is applied as a percentage of the fixed capital invest-
ment. In this study 4% of the fixed capital investment was
considered for general insurance, expenses and local tax. Addition-
ally a 28% corporate tax is paid on profits.
3.4. Working capital
Working capital is capital immobilized in the first year of work
and returned at the end of the operation and, therefore is depreci-
Ultimate analysis
LHV (kJ/kg) (based on wt%) C (%) H (%) O (%) N (%) S (%) Cl (%)
10,819 47.78 6.20 38.25 0.15 0.07 0.05
16,701 69.63 5.75 22.25 0.88 0.62 0.87
86 13 1 – 0.03 –
ated for the time elapsed in the NPV analysis. The working capital
consists of raw materials and suppliers carried in stock, finished
products in stock and semi finished products in the process of
being manufactured, accounts receivable, cash kept on hand for
monthly payment of operating expenses, such as salaries, wages,
and raw-material purchases, and accounts payable (Table 3).
3.5. Corporation Tax
Corporation Tax is applied on the taxable profits of a company.
These include:
• Profits from taxable income such as trading profits and invest-
ment profits.
• Capital gains known as chargeable gains for Corporation Tax pur-
poses.
In order to calculate the amount of Corporation Tax to be paid,
all taxable profits need to be calculated first. This is given by:
CT = ((Ptp + Dpn) − Ca) ∗ TR (9)
where CT is the Corporation Tax (D ), Ptp is the pre-tax profit (D ),
Dpn is the annual straight line depreciation charge (D ), Ca is the
capital allowance (this takes the place of the depreciation charge)
(D ) and TR is the tax rate (taken at 28% for 2011 [26]).
3.6. Projected revenues
Revenues for the SRF plant include sales of electricity, Levy
Exemption Certificates (LECs) sales of secondary aggregates and
Gate fees, these were taken from Yassin et al. [22] at 50 ktpa and
100 ktpa, and are presented in Table 3.
Revenues for the FWWC biomass plant depend on the sales of
electricity, Renewable Obligation Certificates (ROCs), Levy Exemp-
tion Certificates (LECs) and sales of secondary aggregates [27]. The
different revenues considered are described as follows:
• Sales of electricity—a price of 105D /MWh according to Depart-
ment of Energy and Climate Change statistics for 2010.
• Renewable Obligation Certificates (ROCs)—a value of D 42.96 was
according to 2010/11 from Ofgem. Renewable Obligation is the
main support scheme for renewable electricity projects in the
UK. Certificates are issued to an accredited generator for eligible
renewable electricity generated within the UK and supplied to
customers within the UK. These certificates can then be traded,
to suppliers who cannot meet their obligation. The price of the
certificates can change much like on the stock exchange [28].
• Levy Exemption Certificates (LECs)—this represents the value for
being exempt from the climate change levy on electricity. The
current rate for the 2010 period is D 6.97 [29].
• Sales of secondary aggregates—the price value for bottom ash as
a secondary aggregate range from 8.13 D /t to 11.62 D /t according
to WRAP [30]. A value of 10.45 D /t was used in this study.
The revenues for the waste wood chip biomass plant are pre-
sented in Table 3.
 C. Patel et al. / Chemical Engineering Journal 171 (2011) 986–996
Projected revenues for the RSO biomass plant are given as above,
and include the recuperated heat, where:
• Sales of heat—a price of 24.39 D /MWh was taken from Depart-
ment of Energy and Climate Change [6].
3.7. Net present value and levelised cost
Net present value (NPV) refers to the difference between the
present value of all costs and associated revenues, it is determined
as follows:

20
CFn
NPV = n − TPC (10)
(1 + i)
n=1
where i is the discount rate, CFn is the annual cash flow (revenues-
operating costs) at the nth year and TCP is the total plant cost.
Another way to perform comparisons between different tech-
nologies with different capital investment, operation and power
output, is to calculate their levelised cost of the biomass treatment.
This is generally the accepted method for the economic comparison
of different power generation plants. It quantifies the unitary cost
of electricity produced during the plant life-time and is reported in
D /MWh. In this paper, the levelised cost was calculated as the ratio
of the total plant lifetime expenses against total expected outputs,
expressed in terms of present worth [31].
3.8. Depreciation
The plants need to account for the consumption of investments
over time in a way that reflects their reducing value. The term
given to this consumption is depreciation. A depreciation calcu-
lation results in the total amount to be depreciated between each
accounting period of the assets useful economic life. Depreciation
is calculated in this study using the following formula:
C −R
Dpn = (11)
N
where Dpn is the annual straight line depreciation charge (D ), C is
the investment cost (D ), R is the residual value of the asset (in this
study it is taken equal to 10% of the investment cost), and N is the
useful economic life of the investment (years).
4. Results and discussion
4.1. Technical assessment
The nominal power, the electricity produced by the fluidised
bed combustion plant and the internal combustion engine plant
at all scales as well as the heat produced by the internal combus-
tion engine plant at both scales are shown in Table 2. Additionally
the over system efficiency for the combustion plants at all scales,
the engine electrical efficiency for the internal combustion engine
plant, and the efficiency for the diathermic oil turbines are shown
in Table 2.
The RSO plants perform better in terms of overall efficiency
(83%) due to high calorific value of the rapeseed oil and the highest
efficiency of the internal combustion engine (45%) compared to the
steam turbine (30%) The medium scaled SRF plant generates 1.6%
more power than the small scale, whilst the medium scaled FWWC
plant generates 3.2% more power than the small scale. Finally the
RSO plant generates 50% more power in the medium scaled plant
compared to the small scale. The RSO plant produces 24 MWe com-
pared to 17 MWe for the FWWC plant and 13 MWe for the SRF
plant at large scales. The amount of energy produced by the RSO
plant is however depends on the fuel characteristics which have to
993
fall under specific limit specifications. If a non conventional fuel is
used then this may decrease the amount of electricity produced and
affect the maintenance costs of the plant. Additionally if the LHV of
the SRF plant or the FWWC changes, this will also affect the amount
of electricity produced and hence the economics of the plant (as
discussed in more details in the sensitivity analysis section).
4.2. Economic assessment
The economic evaluation and developed model consists of cap-
ital costs, operating costs and working capital, projected annual
revenues, depreciation and corporate tax. The indicative costs and
revenues resulting from the economic model can be used to com-
pare the different scales since a consistent methodology has been
adopted for this analysis. However, costs and revenues are contract
values and can depend on suppliers, plant scale, technology used
and type of energy recovery system employed, as well as local area
factors.
The results are presented in Table 3. It is assumed that prices
for the recycled material and power costs are constant. A discount
rate of 6% is used in this analysis to take into consideration public
sector borrowing; the effect of inflation is excluded as it is assumed
that it influences all cash flows to the same degree. Standardised
financial tools, such as the NPV and IRR, are employed to assess the
profitability of the different options. An investment is economically
viable when the IRR is greater than the rate of return that could be
earned from an alternative investment. The IRR is calculated as the
discount rate that makes the NPV equal to zero [32]. The levelised
costs are also shown in Table 3.
The results indicate that the SRF combustion plant is eco-
nomically viable at both scales. This is due to the revenue
obtained through the gate fees compared with a biomass pur-
chase cost incurred for the FWWC and RSO plants. The FWWC
and RSO plant has significantly higher operating costs which at
a smaller scale cannot be offset because the amount of energy
produced and revenues generated are too low. Whilst lower oper-
ating costs for the SRF plant is further evidence of the revenue
obtained through the gate fee. The FWWC plant is only eco-
nomically viable at 160 ktpa, where a 17% IRR is obtained. The
RSO is economically viable at 40 ktpa with a 23% IRR. Operat-
ing costs are difficult to predict and vary from one country to
another and from technology to technology. The sensitivity analysis
shows how much they can affect the economics of the
plant.
The levelised cost shows the unitary cost of electricity pro-
duced during the plant life-time. Table 3 shows that the levelised
cost decreases as the scale of the plant increases. This is due to
the trade off between the amount of electricity produced and the
costs of production. The levelised cost for the FWWC biomass plant
at 50 ktpa is significantly higher than for the 160 ktpa because at
50 ktpa scale the plant makes much less energy whilst still hav-
ing high costs. This is also the case for the RSO plant. The RSO
plant is uneconomical at 27 ktpa, because it only produces 16 MW
of electricity, which is not enough to offset its costs. High costs
are seen with a levelised cost of £165/MW. When comparing
different feeds, the levelised cost shows the lowest cost of pro-
duction of energy. In this study, SRF does not include a cost for
purchasing the feed, instead a gate fee is paid to the process-
ing facility, and hence it results in the lower levelised cost. In
the future, however this may change and a purchase fee maybe
introduced, in which case the levelised cost would increase. Alter-
natively, the purchase cost of waste wood or RSO may decrease
resulting in turn in a decrease in their levelised cost. A full eco-
nomic assessment must be conducted and considered. At a large
scale, even though the RSO plant produced higher revenues and
994 C. Patel et al. / Chemical Engineering Journal 171 (2011) 986–996

Table 2
Plants’ overall electrical efficiencies and heat and power results.

Plant scale (ktpa) SRF 50 Steam SRF 100 Steam FWWC 50 Steam FWWC 160 Steam RSO 27 Engine RSO 40 Engine
turbine turbine turbine turbine

Nominal power (MW) 17 29 17 33 31 42

Electricity produced (MWe) 5 13 5 17 16 24
Heat produced (MWh) – – – – 12 19
Steam turbine electrical efficiency 30 30 30 30 – –
(%)
Engine electrical efficiency (%) – – – – 45 45
Efficiency of diathermic oil – – – – 36 36
turbines (%)
Efficiency of electricity generated – – – – 34 37
from internal combustion engine
(%)
Overall system efficiency (%) 26 28 26 28 80 83

has low working capital, this plant has to pay more corporate cally viable. Figs. 3–5 show the results of the sensitivity analysis
tax. for the 160 kpta FWWC plant, 100 ktpa SRF plant and 40 ktpa RSO
plant respectively. Changes in capital cost for each plant up to 30%
5. Sensitivity analysis is shown in Fig. 6.

In this section, the effect of changing model input parameters
on the economic performance is evaluated. The sensitivity analy-
sis is a useful procedure in evaluating the model input parameters.
This can then direct us to where the uncertainties lay, thus iden-
tifying the most influential parameters and testing the robustness
of the assumptions made. Seven different system variables have
been chosen and the effect of a ±10% change in these variables on
the levelised cost has been examined. The sensitivity analysis was
performed on the larger scale plants, as these were all economi-
5.1. Changes in biomass calorific value
The calorific value of the biomass is an important parameter for
the evaluation of the levelised costs. LHV is used to calculate the
amount of electricity generated, if the LHV is high then the amount
of energy produced is also high. When calculating the levelised cost
per MWh produced, the higher the amount of the energy produced,
the lower the levelised cost. The change in levelised cost is signifi-
cant for all three biomass types when the calorific value is changed

Table 3
Economic performance of the biomass plants. (The discount rate used in the NPV analysis is 6% and the corporate tax rate is 28%.).

Plant scale (ktpa) SRF 50 SRF 100 FWWC 50 FWWC 160 RSO 27 RSO 40

Plant life time (years) 20 20 20 20 20 20

Fixed capital cost (D m) (sum of total direct 39 51 34 50 32 36
plant costs and working capital)
Total direct plant costs (D m) (sum a.) 29 46 29 45 26 33
a. Equipment and machinery – 26 – 25 – 22
a. Purchased equipment and installation – 8 – 8 – 3
a. Piping and valve – 3 – 3 – 0.6
a. Electrical installation – 2 – 2 – 2
a. Instrument and control installation – 2 – 2 – 0.5
a. Civil work – 3 – 3 – 4
a. Land purchased 2 – 2 – 1
Working capital (D m) (sum b.) – 5 – 5 – 3
b. Engineering and supervision – 1 – 1 – 0.3
b. Construction expenses – 1 – 1 – 0.5
b. Contingency (accounts payable, accounts – 3 – 3 – 2
receivable, cash kept on hand for monthly
payments)
Operating cost (D m) 2 5 4 17 18 25
Biomass – – – 9 – 20
Workers – 0.5 – 0.6 – 0.5
Electrical energy consumed – 0.5 – 0.6 – 0.44
Maintenance – 0.8 – 1.2 – 0.5
Chemicals – 0.8 – 0.7 – 0.4
Specialist and consultant fees – 0.06 – 0.06 – 0.06
General insurance, taxes and expenses – 1 – 3 – 3
Unforeseen expenses – 1 – 2 – 2
Revenues (D m) 8 19 7 27 22 38
Electrical energy sold (D m) 4 10 3 17 9 19
Green certificates (ROCs) (D m) – – 4 9 0.9 4
Levy Exemption Certificates (LECs) (D m) 0.3 0.6 0.2 1 12 14
Bottom ash sold (D m) 0.02 0.05 0.01 0.5 0.7 1
Gate fee (D m) 4 9 – – – –
Annual depreciation on capital investment 1 2 1 2 0.9 1
(not including land) (D m)
Corporation Tax (D m) 1 2 0.2 0.8 0.7 3
NPV (D m) 13 25 –123 118 –13 76
IRR (%) 10 10 –5 17 –2 25
Levelised cost (D /MW) 90 55 377 135 191 166
 C. Patel et al. / Chemical Engineering Journal 171 (2011) 986–996
±10%: SRF shows 11–15% change in levelised cost, FWWC biomass
shows a 9–22% change, whereas RSO shows only a 5–6% change
in levelised cost. The results indicate a larger difference in cost of
production of one unit of electricity for FWWC rather than the RSO
or SRF. The FWWC is sourced from forestry thinning, if in the future
the combustion plant had to change its source of feed, the analysis
shows that the calorific value of the feed plays a key role shown by
a 22% increase in levelised costs with a 10% decrease of the lower
heating value.
5.2. Changes in steam turbine efficiency and efficiency of the
engine
The efficiency of the turbine and the efficiency of the engine
are of great importance as these are involved in the calculation
of the amount of electricity produced. The severity of changes on
the efficiency can be seen as a 10% increase or decrease results
in 25–50% change for SRF and FWWC, whilst a 9–11% percentage
change is obtained for the RSO plant. A change in the efficiency of
the steam turbine results in a significant change in the levelised
cost. However, steam turbines are used extensively in industry and
the efficiency chosen in this study (30%) is a recognized reasonable
value [24]. Therefore, unless more efficient steam turbines or inter-
nal combustion engines are developed, the levelised cost in terms
of efficiency is unlikely to change.
5.3. Capital and operating costs
The capital and operating costs are very difficult to predict for
the economic performance as they rely on external factors such
as feed costs, labour, chemical costs, equipment costs, suppliers,
plant scale, technology used and type of energy recovery system
employed, as well as local area statistics. Low capital investment for
the RSO plant enables three engines to be incorporated in the plant
which effectively results in more electricity production. Addition-
ally, low capital investment enables the RSO plant to implement
ORC circuits to recuperate waste heat, which is subsequently sold
for a profit. Low capital investment however for the RSO plant is
counteracted by its high operating costs, 25 £m/year, which is due
to high purchase cost of biomass especially when compared with
the operating cost of the FWWC plant (17 £m/year) those of the
SRF plant (4 £m/year). Changes in capital cost result in high per-
centage changes in levelised cost, quantified at 20%, 22% and 18%
for FWWC, SRF and RSO respectively. Costs taken in these case stud-
ies are based on real combustion and internal combustion engine
plants and so the sensitivity analysis changes of ±30% for that cap-
ital costs can be considered sufficiently accurate. However these
costs have been seen to change quite drastically from county to
county and with time as a result an elevated ±30% change in capi-
tal costs was investigated in the sensitivity analysis. A ±10% change
in the operating costs instead has a higher influence on the lev-
elised costs for the FWWC and RSO plants, quantified at 7% and 8%
respectively. Whilst the SRF plant results in a 5% change in levelised
cost.
5.4. Changes in plant life-time
In this work, all three plants are considered operational for 20
years. The changes in levelised cost for the plant life time are small,
with only 1% for the case of SRF and 3% for both FWWC and RSO
plants.
5.5. Biomass feed rate
The plants considered in this study all operate at full capacity.
The biomass feed rate affects the amount of electricity produced
995
and therefore the revenues received. The biomass feed rate must
be used on full scale production if the best value for levelised cost
is to be achieved. The results show that if the biomass feed rate is
decreased by 10%, the cost of production increases by 4% for the
SRF and FWWC plant and 6% for the RSO plant. This is expected as
the plant is not utilised to its full potential, resulting in a decrease
in the amount of electricity produced with no change in the cost of
purchase for the biomass.
5.6. Changes in electricity selling price and ROC selling price
The price of electricity and ROCs are subject to changes. There-
fore a change in electricity price by ±10% up to ±50% is performed to
see its effect on the IRR. Separately, a change in ROC price by ±10%
up to ±50% is performed to see its effect on the IRR. The results
for changing electricity price for 160 ktpa FWWC plant are shown
in Fig. 7 whilst the results for changing ROC prices for 160 ktpa
FWWC plant are shown in Fig. 8. The results for changing electricity
price for 100 ktpa SRF plant are shown in Fig. 9. The SRF plant does
not benefit from ROCs. The results for changing electricity price
for 40 ktpa RSO plant are shown in Fig. 10, whilst the results for
changing ROC price for 40 ktpa RSO plant are shown in Fig. 11.
Figs. 6 and 7 show the results for changing the electricity price
for the 160 ktpa FWWC plant and the ROC prices respectively. Fig. 8
shows a similar result in decreasing electricity price below −10%
results in a negative IRR. Figs. 9 and 10 also have the same pat-
tern. These results show great changes in the IRR. Decreasing the
percentage any further than −10% in electricity price or ROC price
results in a negative IRR, rendering the plant uneconomical. It is
very important to ensure incentives such as ROCs are kept con-
stant for renewable energy plants, and the price of electricity must
stay constant or increase to avoid negative IRRs. In the UK, the gov-
ernment has announced that suppliers will be subject to ROCs until
31st March 2037.
6. Conclusions
Biomass shows great promise as an alternative fuel for the pro-
duction of energy. SRF and FWWC can be utilised for lowering our
emissions of fossil carbon into the atmosphere, avoiding the use
of landfill and utilising a great untapped source to help meet our
energy requirements and targets. SRF can be utilised to produce
energy and it has a high calorific value, however it is still a mixed
waste stream and as shown by the economic assessment, it requires
high capital costs for neutralisation of contaminants such as chlo-
rine, sulphur, and NOx. The utilisation of FWWC if increased and
monitored can be developed into an industry of its own which will
in turn reduce the cost of processing the feed as competition from
suppliers begins to take effect. RSO is another form of biomass that
can be used to produce electricity in internal combustion engines.
In recent years, the production of RSO in the UK has increased dras-
tically as it serves as a break crop and can be used for the production
of electricity. At present, the purchase cost of RSO is far greater than
FWWC and SRF. However, the cost of processing the oil in internal
combustion engines in terms of capital investment is much lower
than for the production of electricity from combustion using SRF
and FWWC.
A techno-economic analysis of SRF, FWWC and RSO combustion
plants was undertaken at Germanà & Partners Consultant Engineers
in Rome, Italy. This study investigated the application of 50 ktpa
and 100 ktpa SRF plants with an overall efficiency of 26% and 28%
respectively, 50 ktpa and 160 ktpa FWWC plants with an overall
efficiency of 26% and 28% respectively, and 27 ktpa and 40 ktpa RSO
plants with 80% and 83% overall efficiency respectively. The SRF
plants are economically viable at both scales in light of the low
996 C. Patel et al. / Chemical Engineering Journal 171 (2011) 986–996
operating costs, with a positive 10% IRR for both cases. The FWWC
biomass plant and the RSO plant result economically viable only at
the larger scales, with 17% IRR for the FWWC and 25% IRR for the
RSO. These results suggest that the SRF plant is the most flexible in
terms of scale, the RSO however is the most financially attractive
option compared with FWWC and SRF.
The results of the sensitivity analysis indicate that the main
parameters affecting the levelised cost for the SRF plant are the tur-
bine efficiency with a 25–50% change, and the capital costs with a
22% change. The variables most affecting the FWWC biomass plant
are the calorific value with 9–22% change, the steam turbine effi-
ciency with 25–50% change, the capital costs with a 20% change and
the operating cost with 22% change. The parameters most affecting
the RSO biomass plant are instead the capital costs with 18% change
and the operating costs with 25% change, whereas the calorific
value and, the engine efficiency have a smaller effect. The operat-
ing cost changes for the RSO plant and FWWC plant changed by 8%
compared to 5% for the SRF plant. This is due to the purchase cost of
FWWC and RSO. In the future, costs for feeds may change depend-
ing on how the market develops. SRF may no longer have a gate fee
and a charge for its use instead. Alternatively, FWWC and RSO prices
may decrease as competition from suppliers take place. Addition-
ally the sensitivity analysis shows if the ROC selling price and elec-
tricity selling price decreases below 10%, the plants will no longer
be economically viable. This shows that government incentives are
key to render such renewable energy plants economically viable.
The work presented in this paper will be further developed to
assess the environmental burden of each scenario. The technologi-
cal assessment is used to calculate the energy required at each stage
of the processing plant. A life cycle analysis of the processes, from
cradle to gate, of the feed attainment to processing will investi-
gate the environmental impact of such processes and their carbon
footprint.
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