1. Equipment Rating & Economic Evaluation

2. Course outline  Equipment rating  Economic evaluation of a flowsheet Engineering economic review Cost factors Generating Economic Reports Strategies for increasing profits

3. Equipment rating  Design mode vs. rating mode

4. Equipment sizing vs. rating  Sizing- calculate the dimensions of an equipment for a fixed operating condition  Rating- calculate the percentage of use of an equipment with fixed dimensions  Default setting in SPD: Design Mode (sizing) when equipment dimensions are not specified, e.g. reactor volume, filter area, etc. In Design Mode, a max available size for the equipment is specified. If the calculated equipment size > max allowable size, SPD will employ multiple pieces of equipment (with each equipment size < max allowable size.)

5. Filter (PFF-1) sizing  Right click your PFF, choose “Equipment Data” to check on the calculated filter area  Remember that: Flux =Vol/(Area x time)  Data needed: Flux & time (revisit by right click PFF Operation Data/ FILTER-1 Feed volume determined by SPD from P-1 (reactor)  Hence, SPD calculates filter area Design mode Calculated filter area = 1.5 m 2 Max available size = 80 m 2

6. Rating  If Rating Mode is selected, the size & number of the units can be specified SPD takes this info to calculate the output of simulation, e.g. M&E balances, process time, etc.  Task: switch the PFF sizing method to Rating Mode ( right click PFF/ Equipment Data) & do the following changes: Filter size = 2 m 2 (1unit) Filter flux = 150 L/m 2 hr (revisit by right click PFF Operation Data/ FILTER-1, Duration, Filtration Time)  Save your tutorial as different file name

7. Working session Determine the filtration time when PFF os switched to Rating Mode

8. Economic evaluation  Stream classification  Economic evaluation features

9. Stream classification  We need to classify all input and output streams as raw materials, revenues or wastes (solid, liquid or gaseous) & supply their cost data before we perform the throughput analysis, plant economic evaluation & environmental impact assessment calculations.  By default, SPD estimates a purchase or selling price for a stream based on the price of each component and the composition of the stream.

10. Stream classification  Output streams: Classification:  “C” = Revenue  “Emission” = Emission  “B + Heptane” & “Wash out” = Aqueous Waste Cost:  Emission aqueous waste disposal cost = $0.10/kg (click “Set by user” first)  Revenue stream (automatically calculated based on stream composition) Pre-inserted cost data  Main Product Rate: Stream “C” Reported based on “single component C” Path: Tasks/Stream Classification

11. Engineering economic review  Cost broken down into: Capital cost  Equipment cost  Building costs Operating cost  Utilities  Labor  Raw material  Index of economic performance Return on Investment (ROI)  Annual Income/ Capital costs *100%  Usually aim for 30% Internal Rate of Return (IRR)  Discounted Cash Flow Payback Period/Time  Amount of time to repay automatically  Usually aim for 7 years or less Net Present Value (PVV)  Value of project in current year currency

12. Cost factors (operation level) For each unit procedure you can set cost data for each operation under “Labor, etc.” tab Path: Right click an equipment procedure/ Operation Data/(any operation) Create new labors Can only be change in Databanks/Heat Transfer Agents

13. Cost factors (equipment level)  Path: Right click an equipment procedure/ Equipment Data/ (any operation)  Purchase Costs Automatically calculated Set by user  Adjustments Change material of construction Change opening and maintenance costs

14. Cost factors (section level)  Section- segment or a group of equipment  Capital cost adjustments (piping, instrumentation)  Operation cost adjustments (labour, facilities, QA)

15. Cost factors (flowsheet level)  Path: Edit/ Flowsheet Options/ Economic Evaluation Parameters Right click on Flowsheet Economic Evaluation Parameters  Cater for Overall Financing Time Valuation Income taxes

16. Economic evaluation  Pre-simulation check: All streams are classified, especially the main revenue stream Filter setting:  Rating Mode  Area = 2.0 m 2  Flux = 150 L/m 2 h Set under Recipe Scheduling Information  Number of batches  Cycle time = 12hours

17. Economic evaluation steps  Solve M&E balances  Task/ Perform Economic Calculations  Results: View/ Executive Summary Reports/ Economic Evaluation Reports/ Cash Flow Analysis Report/ Itemized Cost Report

18. Strategies to increase profits  Increase number of batches Try larger batches, e.g. maybe 100? Let SPD calculate the maximum batches  Debottleneck Size debottleneck i.e equipment capacity Time debottleneck i.e higher equipment use  Capital costs will rise with equipment sizes  Operation costs can be optimised with better labor and facility usage