Chapter 5 - Thermoeconomics

Abstract

Thermodynamic principles describe the flow, conservation, and conversion of energy and hence have implications for energy management and economics. The economies of processes always involve matter, energy, entropy, and information and the consideration of economics leads to certain structures with minimum overall costs. Thermodynamic formulations impose directions and limits on the probability of processes; they also imply the use of scarce resources and compare the efficiencies of conversion between different kinds of energies, which may be a necessary step in net energy analyzes and energy policy discussions. Thermoeconomics combines thermodynamic principles with economic analysis and brings some fundamental changes in the economic evaluation, design, and maintenance of processes. The optimization of subsystems individually does not guarantee an optimum for the overall system, and often various design variables must be considered and optimized simultaneously. In the optimization, the cost of the thermal energy source plays an important role; change in fuel cost from one year to another and from one place to another will eventually affect the overall design and hence the economic considerations. The process engineer should minimize the input cost of a process by reducing exergy loss due to thermodynamic imperfections. Taking such a perspective, thermodynamic analysis considers the interrelations among energy, economy, and ecology. Such considerations may have a positive impact on sustainable development and environmental protection. For example, a thermodynamic analysis of a solar desalination unit shows that the thermoeconomic evaluation of the system is closely related to a complete economic analysis of the possible improvements, leading to a unit in which fewer irreversible processes occur.