Capital Cost Research Articles

Exergy and thermoeconomic analysis of a novel polygeneration system based on gasification and power-to-x strategy

This study introduces a novel polygeneration system that integrates biomass gasification, anaerobic digestion, photovoltaic (PV) energy, and electrolysis to enhance system flexibility and efficiency. The system includes an allothermal gasification unit that processes lignocellulosic biomass sourced from a botanical garden. The gasifying agent, either steam or oxygen, is supplied by an alkaline electrolyzer, which operates under a Power-to-X strategy, utilizing surplus energy from a PV field. The resulting syngas and hydrogen are blended with biogas from an anaerobic digester, which treats municipal waste, to power a cogenerator. This cogenerator meets the electricity, heating, and cooling demands of a hospital, while the PV field powers the botanical garden. The systems components are modeled using various tools and integrated into the TRNSYS environment for dynamic simulation. An exergy analysis identifies the main sources of exergy destruction, while a thermo-economic analysis evaluates the energy, environmental, and economic impacts of a demonstration plant located in Bogotá’s Botanical Garden. Simulation results show that the system achieves an overall exergy efficiency of around 35 %, with a 96 % reduction in primary energy consumption compared to a reference system, avoiding nearly 6000 tons of CO2 emissions annually. From an economic perspective, the system is profitable, with a payback period of 3.02 years and a Net Present Value of $15.23 million, almost double the capital cost. The gasification unit's exergy efficiency is significantly higher when using oxygen (0.50) compared to steam (0.25), underscoring the importance of integrating electrolysis for improved biomass conversion. The alkaline electrolyzer operates efficiently within its optimal range, with an energy efficiency close to 0.70 and an exergy efficiency around 0.60, effectively utilizing 25 % of the total PV production.

Enriching wind power utility through offshore wind-hydrogen-chemicals nexus: Feasible routes and their economic performance

The offshore wind-hydrogen strategy is crucial for achieving carbon neutrality, yet faces challenges like wind power variability, surplus hydrogen, and elevated costs. Recently, linking offshore wind, hydrogen, and chemicals is proposed to address these challenges. However, there is a lack of a comprehensive techno-economic analysis of this nexus. This study, as one of the first attempts, performs the techno-economic analysis of 8 feasible offshore wind-hydrogen-chemical nexus routes, in which factors of technology, economics, and financial policy are considered. The research indicates that Route 7, which incorporates offshore wind power utilizing proton exchange membrane technology for hydrogen production and blends it with natural gas on offshore platforms, demonstrates the most cost-effective outcome. The key factors influencing the cost reduction of these routes encompass the green hydrogen price, capital costs, internal rate of return, electricity price, value-added tax rate, and loan ratio. Among these, the green hydrogen price is the primary determinant influencing the cost of green products. If the price of green hydrogen decreases to 2.19 USD/kg, green synthetic ammonia can meet the current standard of 605.47 USD/t. Finally, the results can provide important reference to support stakeholders for seeking cost-effective routes of offshore wind-hydrogen-chemical nexus in China and other regions.

Multiobjective optimal TCSC placement using multiobjective grey wolf optimizer for power losses reduction

This study investigates the application of the multiobjective grey wolf optimizer (MOGWO) for optimal placement of thyristor-controlled series compensator (TCSC) to minimize power loss in power systems. Two conflicting objectives are considered: (1) minimizing real and reactive power loss, and (2) minimizing real power loss and TCSC capital cost. The Pareto-optimal method is employed to generate the Pareto front for these objectives. The fuzzy set technique is used to identify the optimal trade-off solution, while the technique for order preference by similarity to the ideal solution suggests multiple optimal solutions catering to diverse utility preferences. Simulations on an IEEE 30 bus test system demonstrate the effectiveness of TCSC placement for power loss minimization using MOGWO. The superiority of MOGWO is confirmed by comparing its results with those obtained from a multiobjective particle swarm optimization algorithm. These findings can assist power system utilities in identifying optimal TCSC locations to maximize their performance.

The implied risks caused by ESG rating divergence: a test based on the cost of equity capital

ABSTRACT Environment, Social, and Governance (ESG) performance serves as a crucial factor in investor decision-making; however, the existence of ESG rating divergence adds complexity and investment risk to assessing a firm’s sustainable performance. This article investigates the impact and the mechanisms behind firms’ ESG rating divergence on the cost of equity capital, enriches the research content of the economic consequences of ESG rating. This article uncovers the following key findings: (1) Increasing the divergence in a firm’s ESG ratings correlates with a rise in the cost of equity capital. (2) The influence of ESG rating divergence on the cost of equity capital, primarily through stock market performance. Specifically, ESG rating divergence positively correlates with stock price synchronicity, exhibiting a mediating effect on the cost of equity capital; it is negatively correlated with stock returns and turnover rates. (3) Digital transformation and financial institution shareholding negatively moderate ESG rating divergence and the cost of equity capital. (4) The impact of ESG rating divergence on the cost of equity capital is more pronounced in non-state-owned, non-cross-border listed, and small-size firms. The conclusions of this study provide references for relevant institutions to standardize rating systems, provide references for firms to optimize ESG information disclosure.

North Korea's threats and the cost of equity capital: The effect of information environments

We examine how the information environment affects the association between North Korea's threats and the cost of equity financing. Using a sample of Korean publicly-listed firms from 2012 to 2019, we find evidence that the adverse effect of North Korea's threats on the cost of equity capital is more significant for companies in less transparent information environments after controlling for other factors. Our findings contribute to the literature by identifying that the information environment affects geopolitical risk.

Investment Analysis for Monetization of Marginal Oil Reserves: An Alpha Field Joint Operation Case Study

Challenges and opportunities are faced in the development of marginal oil reserves that are often uneconomical to exploit conventionally. The main objective of this study was to determine whether the project is a viable investment based on the given assumptions, as well as whether the potential returns can justify the risks associated with marginal oil reserves. The research method involved the use of key financial metrics such as Net Present Value, Internal Rate of Return, and Payback Period, using a discount rate of 10%, which is standard in the oil and gas industry. The results show that the project has a positive NPV of USD 124,462.38, an IRR of 13.13%, and a PBP of 4 years and 5 months. These results indicate that the project is financially viable, with returns exceeding the capital cost of the project. Further sensitivity analysis identified that oil prices and production levels are the most critical factors affecting the financial outcome of the project. Compared to the WACC of 10.25%, the IRR of 13.13% indicates that the project exceeds the minimum required rate of return, thus justifying the investment. The implications of this study highlight the importance of proper operational management and market risk mitigation to maintain profitability.

Developing resilience pathways for interdependent infrastructure networks: A simulation-based approach with consideration to risk preferences of decision-makers

In this study, we propose a methodological framework to identify and evaluate cost-effective pathways for enhancing resilience in large-scale interdependent infrastructure systems, considering decision-makers’ risk preferences. We focus on understanding how decision-makers with varying risk preferences perceive the benefits from infrastructure resilience investments and compare them with upfront costs in the context of high-impact low-probability (HILP) events. First, we compute the costs of interventions as the sum of their capital costs and maintenance costs. The benefits of the interventions include the reduction in physical damage costs and business disruption losses resulting from the improved resilience of the network. In the final stage, we develop statistical models to predict the perceived net benefits of different network resilience configurations in power, water, and transport networks. These models are employed in an optimization framework to identify optimal resilience investment pathways. By incorporating Cumulative Prospect Theory (CPT) in the optimization framework, we show that decision-makers who assign higher weights to low probability events tend to allocate more resources towards post-disaster recovery strategies leading to increased resilience against HILP events, like earthquakes. We illustrate the methodology using a case study of the interdependent infrastructure network in Shelby County, Tennessee.

Design and economic analysis of an innovative multi-generation system in different Countries with diverse economic contexts

This paper presents an innovative trigeneration system designed to maximize energy utilization by simultaneously producing power, cooling, and freshwater. The system integrates multiple energy sources, including biomass, natural gas, and geothermal energy, and comprises a modified gas turbine cycle, a geothermal power plant, a triple-effect absorption refrigeration cycle, and a multi-effect desalination unit. Performance metrics are evaluated from both thermodynamic and economic perspectives across four case studies: Australia, the USA, China, and Russia. The economic feasibility analysis utilizes real-state economic data, incorporating natural gas prices, electricity prices for households, interest rates, and inflation rates specific to each country. The system achieved impressive outputs, with net power, cooling, and freshwater production rates of 6299 kW, 140.1 kW, and 13.41 kg/s, respectively. Exergy analysis revealed that the combustion chamber, heat exchanger, and multi-effect desalination units exhibit the highest irreversibility, with exergy destruction rates of 2961 kW, 1125 kW, and 995.3 kW, respectively. The fixed capital investment cost is estimated at $13.5 million, resulting in a payback period of 6.75 years and a net present value of $7.287 million. In Australia, the system demonstrated a particularly favorable economic performance, with a payback period of 3.98 years and a net present value of $36.19 million. Conversely, in China, the payback period exceeds the system's expected lifetime, highlighting the economic challenges in certain environments. These results underscore the system's potential for profitability and sustainability, particularly in regions with favorable economic conditions.

Economic assessment of acetaldehyde production from oxidative dehydrogenation of bioethanol through chemical looping air separation

The conventional bioethanol oxidative dehydrogenation to acetaldehyde suffers from low energy efficiency and high capital cost due to cryogenic air separation’s high energy consumption and high capital investment. A novel bioethanol oxidative dehydrogenation to acetaldehyde system through chemical looping air separation is established and analyzed in this paper. According to the prediction results, energy efficiency as well as techno-economic performance for the system are studied. It demonstrates that the whole energy efficiency of the system is 55.91 %. Moreover, the acetaldehyde production cost is $877/tonne with bioethanol price $0.43/L. For the acetaldehyde production scale of 106 tonnes/year, the payback period is 2.40 years. Compared with other acetaldehyde production technologies, the system is competitive in terms of acetaldehyde production cost. Additionally, sensitivity analysis for influence factors is carried out. The price of bioethanol has the greatest impact on acetaldehyde production cost, while the price of water is the minimum influence factor.

Techno-economic and environmental analysis of decarbonization pathways for cement plants in Uzbekistan

The cement industry is a major contributor to global carbon emissions and is characterized by high energy waste, necessitating urgent mitigation efforts. This study explores decarbonization pathways, including energy efficiency, clinker substitution, alternative fuels, and carbon capture, storage, and utilization technologies, for a 1 Mt/year cement plant in Uzbekistan. Waste heat recovery and CO2 capture technologies are identified as the most effective methods for this plant because of their high efficiency and sustainability potential. By using modeling tools such as Aspen Plus and Aspen Custom Modeler, various scenarios, including the cement plant baseline, amine-based CO2 absorption, membrane CO2 separation, and WHR units, are investigated to assess their techno-economic and environmental impacts. The study establishes design parameters for each unit and calculates both capital and operational costs. Compared with conventional amine absorption, the membrane separation process reduces the clinker cost, levelized cost of clinker, CO2 avoided cost, and CO2 capture cost by 31 %, 34.3 %, 72 %, and 70 %, respectively. The implementation of a waste heat recovery system with amine absorption and membrane separation further reduces annual indirect CO2 emissions by 17 % and 35 %, respectively, thereby lowering operating costs. Membrane separation systems prove to be more economical in terms of both capital and operational expenses, particularly when integrated with heat recovery systems, effectively offsetting the higher costs associated with amine-based systems.

Exergo-enviro-economic analyses of solar energy based novel air cooling system

Implementation of heating, ventilation, and air conditioning units in buildings for space cooling represents a passive method for achieving thermal comfort and reducing power consumption. This paper introduces solar energy assisted in-direct evaporative cooling system with a novel multi-passage dry channel. The main objectives are to evaluate exergy variations, sustainability, and total cooling cost based on the inlet conditions for four modes: A, B, C, D (without evaporative cooling, with evaporative cooling, preheating, and preheating with humidification). This comparative study explores thermal performance enhancement of an indirect evaporative cooling system across four operational modes. Mainly, the exergy outlet values increase significantly by 77.39%, while exergy destruction decreases by 54.86%. Both energetic and exergetic coefficient of performances witness remarkable enhancements, with energetic Coefficient of Performance (COP) rising by 321.32%. Exergy efficiency experiences a notable enhancement of 29.974%, and sustainability index shows a consistent upward trend, with a 119.34% increase observed in Mode D compared from Mode A. Entropy generation decreases significantly, indicating improved system efficiency. Total capital cost per unit of cooling capacity decreases notably, highlighting cost savings. These findings underscore the effectiveness of incorporating preheating and humidification processes in optimizing indirect evaporative cooling system performance, emphasizing both exergy efficiency and cost-effectiveness.

The Economic Impact of Water Vulnerability on Corporate Sustainability: A Perspective of Corporate Capital Cost

Studies have argued that water risk affects corporate sustainability, but few of them have fully explored whether or not and how water resources have a direct impact on corporate finance and strategy. This study takes the listed companies in the Chinese A-share market from 2019 to 2023 as a sample to understand the threat of water vulnerability to corporate sustainability from the perspective of capital cost. This study argues that water vulnerability positively relates to corporate capital cost by increasing corporate financing constraints. Meanwhile, this study also examines the role of water regulation and water investment in the relationship between water vulnerability and corporate capital cost. Water regulation brings legitimate pressure to corporations and increases the transformation risks faced by them, so it has a positive moderating effect. Water investment can alleviate the vulnerability of local water resources and reduce the physical water risk faced by corporations, so it has a negative moderating effect. The study finds that the two measures mainly play a significant moderating effect on the cost of debt. In addition, the study finds that the positive relationship between water vulnerability and capital cost has industrial and firm-level heterogeneity, while the moderating effect of government water governance has only industrial heterogeneity.

Tripartite evolutionary game and simulation of solvency supervision under C‐ROSS II based on prospect theory

AbstractThis paper focuses on the implementation of “C‐ROSS II” and utilizes an evolutionary game model to investigate regulatory issues. Based on prospect theory, a three‐party evolutionary game model is constructed among regulatory agencies, insurance companies, and consumers with incomplete rationality, examining evolutionary stability strategies. Meanwhile, considering the different attitudes of policyholders in the face of loss and return, the heterogeneous risk preference is analyzed by changing the prospect parameters. The results show that increases in penalty amounts, positive incentives, and consumer sensitivity to losses will promote the evolution of the system to the optimal stable equilibrium point. However, rises in brand incomes and rectification costs, as well as decreases in capital costs, will decrease the probability of regulatory authorities enforcing strict supervision.

Case Studies and Parametric Analysis of Heliostat Performance with a Tradeoff-informed Technoeconomic Analysis Metric

Abstract The Heliostat Consortium (HelioCon) was launched in 2021 to advance heliostat technology. This work presents a collection of baseline case studies for the technoeconomic analysis (TEA) of candidate heliostat improvements for concentrating solar power (CSP) and concentrated solar thermal (CST) systems that employ central receivers. The case studies we develop include a large-scale CSP plant, a smaller, modular CSP plant, and a small CST plant used for industrial process heat. In this work, we propose a novel metric for TEA of a plant component technology that recasts relative changes in levelized system costs into component-specific capital cost budgets. This measure, which we refer to as the equivalent breakeven installed cost, is the maximum budget for the technology component that leads to improved levelized costs. Finally, we perform a parametric analysis to show the impact of candidate technologies on levelized cost of heat and, by extension, equivalent breakeven installed cost.

Pre-cooling systems in modern hydrogen liquefaction

The research work presents recommendations for choosing a circuit design for low-capacity hydrogen liquefaction plants with a production rate up to 20 kg/h or 0,48 tpd (ton per day). Main design criteria considered are specific energy cost, as well as capital costs and overall characteristics of the system. A review of theoretical and real hydrogen liquefaction cycles is presented. Mathematical models of different circuits are built up considering real parameters of the typical equipment. The advantages and disadvantages of certain solutions are identified, efficiency trends in terms of hydrogen liquefaction plants are analysed. According to the obtained results of the research main of the circuits for low-capacity hydrogen liquefaction plants are selected.

Technical–Economic Analysis of Renewable Hydrogen Production from Solar Photovoltaic and Hydro Synergy in a Pilot Plant in Brazil

Renewable hydrogen obtained from renewable energy sources, especially when produced through water electrolysis, is gaining attention as a promising energy vector to deal with the challenges of climate change and the intermittent nature of renewable energy sources. In this context, this work analyzes a pilot plant that uses this technology, installed in the Itumbiara Hydropower Plant located between the states of Goiás and Minas Gerais, Brazil, from technical and economic perspectives. The plant utilizes an alkaline electrolyzer synergistically powered by solar photovoltaic and hydro sources. Cost data for 2019, when the equipment was purchased, and 2020–2023, when the plant began continuous operation, are considered. The economic analysis includes annualized capital, maintenance, and variable costs, which determines the levelized cost of hydrogen (LCOH). The results obtained for the pilot plant’s LCOH were USD 13.00 per kilogram of H2, with an efficiency loss of 2.65% for the two-year period. Sensitivity analysis identified the capacity factor (CF) as the main determinant of the LCOH. Even though the analysis specifically applies to the Itumbiara Hydropower Plant, the CF can be extrapolated to larger plants as it directly influences hydrogen production regardless of plant size or capacity.

Development of Ti3SiC2 MAX phase tubular structures for solar receiver applications

Solar receiver tubes are key components of concentrating solar-thermal power (CSP) systems that harvest solar energy. For better efficiency, the Gen3 CSP receivers, which collect heat into a heat transfer fluid, require a temperature exceeding 700 °C during operation and need to perform under extreme conditions of high temperature and high thermal stress. Operators are seeking CSP designs using new high-temperature structural materials with high thermal conductivity and high creep resistance to achieve a design life of 30 years and thus help recover the plant capital cost sooner. MAX phase materials, which consist of an early transition metal element, an A-group element, and carbon or nitrogen, are expected to exhibit high creep resistance as well as high fracture toughness. In this paper, we describe fabricating both (1) dense Ti3SiC2 MAX phase disks and (2) short-length tubes using field-assisted sintering technology (FAST). First, the disk samples that we fabricated are fully dense and contain ≈90 % Ti3SiC2 MAX phase materials and ≈10 % TiC phase materials. We determined a flexure strength of 519 ± 32 MPa by conducting a four-point bending test at room temperature with rectangular bar samples of ≈100 % density. The thermal conductivity of the Ti3SiC2 MAX phase samples, measured by light-flashing analysis, decreases linearly from a value of 41 W·m−1·K−1 at room temperature to a value of 36 W·m−1·K−1 at 650 °C. A solar reflectance measurement of the Ti3SiC2 MAX phase revealed that, temperature increases from 400 to 1400 °C, thermal emittance increases from 0.39 to 0.49, while selectivity decreases from 1.8 to 1.4, respectively. Whereas the surface oxidized MAX phase samples after 100 h exposure to air at 1000 °C exhibit that of SiC.Next, we discuss fabrication of the crack-free Ti3SiC2 MAX phase tubular structures accomplished by using FAST processing in graphite bedding. A Ti3SiC2 MAX phase content of > 95 % with traceable ≈3% remaining TiC phase and ≈15 % porosity were demonstrated after high-temperature annealing. An average fracture strength of ≈250 MPa was determined with Ti3SiC2 MAX phase tubes of ≈85 % density by diametral compression testing at room temperature. Our work demonstrated that using FAST processing to produce Ti3SiC2 MAX phase tubular structures for CSP receiver applications is a viable approach.

Techno-economic assessment of vertical axis wind turbine driven RO desalination with compressed air energy storage for remote communities

Renewable energy desalination is gaining much attention in remote off-grid communities facing challenges in accessing clean water. Typically, batteries ensure the continuous operation of small-scale renewable reverse osmosis (RO) desalination systems; however, they are expensive and have relatively shorter lifespans. This study investigates the implementation of a compressed air energy storage (CAES) system coupled with a vertical axis wind turbine (VAWT) to directly drive small-scale RO desalination, potentially replacing batteries and reducing energy conversions. A Simulink model was developed to simulate the performance of a VAWT-driven CAES operating RO units, adaptable for both technical and economic assessments. Parametric studies have identified the optimal configuration. The most cost-effective configuration, utilising eleven VAWTs and a pressure exchanger (PX), achieves a levelised cost of water (LCOW) of 1.63 US$/m3 and an annual water production of 9400 m3. The normalised daily water production per square metre of turbine swept area at the study site is 0.19 m3/m2/day at an average wind speed of 5 m/s. While this configuration has a higher initial capital cost, it yields the lowest LCOW. The CAES system effectively addresses the intermittency challenges of wind energy. This study presents a novel, battery-free VAWT-CAES-RO system as a sustainable desalination solution for remote communities, offering a promising approach to address water scarcity in an environmentally friendly manner.

Cost-optimal design and operation of hydrogen refueling stations with mechanical and electrochemical hydrogen compressors

Hydrogen refueling stations (HRS) can cause a significant fraction of the hydrogen refueling cost. The main cost contributor is the currently used mechanical compressor. Electrochemical hydrogen compression (EHC) has recently been proposed as an alternative. However, its optimal integration in an HRS has yet to be investigated. In this study, we compare the performance of a gaseous HRS equipped with different compressors. First, we develop dynamic models of three process configurations, which differ in the compressor technology: mechanical vs. electrochemical vs. combined. Then, the design and operation of the compressors are optimized by solving multi-stage dynamic optimization problems. The optimization results show that the three configurations lead to comparable hydrogen dispensing costs, because the electrochemical configuration exhibits lower capital cost but higher energy demand and thus operating cost than the mechanical configuration. The combined configuration is a trade-off with intermediate capital and operating cost.

Measuring ESG risk premia with contingent claims

We propose a contingent claims approach for estimating ESG risk premia from market information and market participants' decisions. To this end, we infer the asset value dynamics via the structural model of Merton [1974, “On the Pricing of Corporate Debt: The Risk Structure of Interest Rates.” Journal of Finance 29: 449–470.] for a large panel of S&P 500 firms using an estimation algorithm that utilizes the information embedded in stock market prices, CDS spreads, and default probabilities. We find a statistically significant relationship between the ESG score and the volatility and drift terms of the asset value process, suggesting that ESG factors are structurally connected to the value of the firm. We establish a mapping between ESG scores and the cost of equity and debt as implied by firm's contingent claims, and derive estimates of the ESG risk premium across different ESG and leverage profiles. In addition, we break down the ESG risk premia by industry, and demonstrate how practitioners can adjust the weighed average cost of capital of ESG laggard firms for valuation and decision making purposes.