Comparison of bulk density with different processes [5].
\\n\\n
IntechOpen Book Series will also publish a program of research-driven Thematic Edited Volumes that focus on specific areas and allow for a more in-depth overview of a particular subject.
\\n\\nIntechOpen Book Series will be launching regularly to offer our authors and editors exciting opportunities to publish their research Open Access. We will begin by relaunching some of our existing Book Series in this innovative book format, and will expand in 2022 into rapidly growing research fields that are driving and advancing society.
\\n\\nLaunching 2021
\\n\\nArtificial Intelligence, ISSN 2633-1403
\\n\\nVeterinary Medicine and Science, ISSN 2632-0517
\\n\\nBiochemistry, ISSN 2632-0983
\\n\\nBiomedical Engineering, ISSN 2631-5343
\\n\\nInfectious Diseases, ISSN 2631-6188
\\n\\nPhysiology (Coming Soon)
\\n\\nDentistry (Coming Soon)
\\n\\nWe invite you to explore our IntechOpen Book Series, find the right publishing program for you and reach your desired audience in record time.
\\n\\nNote: Edited in October 2021
\\n"}]',published:!0,mainMedia:{caption:"",originalUrl:"/media/original/132"}},components:[{type:"htmlEditorComponent",content:'With the desire to make book publishing more relevant for the digital age and offer innovative Open Access publishing options, we are thrilled to announce the launch of our new publishing format: IntechOpen Book Series.
\n\nDesigned to cover fast-moving research fields in rapidly expanding areas, our Book Series feature a Topic structure allowing us to present the most relevant sub-disciplines. Book Series are headed by Series Editors, and a team of Topic Editors supported by international Editorial Board members. Topics are always open for submissions, with an Annual Volume published each calendar year.
\n\nAfter a robust peer-review process, accepted works are published quickly, thanks to Online First, ensuring research is made available to the scientific community without delay.
\n\nOur innovative Book Series format brings you:
\n\nIntechOpen Book Series will also publish a program of research-driven Thematic Edited Volumes that focus on specific areas and allow for a more in-depth overview of a particular subject.
\n\nIntechOpen Book Series will be launching regularly to offer our authors and editors exciting opportunities to publish their research Open Access. We will begin by relaunching some of our existing Book Series in this innovative book format, and will expand in 2022 into rapidly growing research fields that are driving and advancing society.
\n\nLaunching 2021
\n\nArtificial Intelligence, ISSN 2633-1403
\n\nVeterinary Medicine and Science, ISSN 2632-0517
\n\nBiochemistry, ISSN 2632-0983
\n\nBiomedical Engineering, ISSN 2631-5343
\n\nInfectious Diseases, ISSN 2631-6188
\n\nPhysiology (Coming Soon)
\n\nDentistry (Coming Soon)
\n\nWe invite you to explore our IntechOpen Book Series, find the right publishing program for you and reach your desired audience in record time.
\n\nNote: Edited in October 2021
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Patients with type 2 diabetes have 2-4 times higher risk of cardiovascular and renal complications, morbidity and mortality. This book, Type 2 Diabetes, is a unique book covering the topics including pathophysiology, complications and prevention and treatments. Understanding the etiology of the onset and development of type 2 diabetes is important to prevent type 2 diabetes complications and delay the progress. The Pathophysiology section covers a wide range of mechanisms and characteristics from the micro (molecular) to the macro (neurohormonal mechanisms and the beta-cell function in the pancreas). The Complications section includes renal complications, sympathetic nervous system imbalance, atherosclerosis, and foot ulcers which are frequently observed in diabetic patients. Finally, the Prevention and Treatments section consists of non-pharmacological treatments, bariatric surgery, pharmacological therapy, and insulin therapy. \nThe editor hopes that this book is helpful for your clinical practice and research, and this book facilitates the reduction of global burden of type 2 diabetes.",isbn:null,printIsbn:"978-953-51-1171-9",pdfIsbn:"978-953-51-7167-6",doi:"10.5772/46238",price:159,priceEur:175,priceUsd:205,slug:"type-2-diabetes",numberOfPages:546,isOpenForSubmission:!1,isInWos:null,isInBkci:!1,hash:"506b05f1c643c7b9785312486684919a",bookSignature:"Kazuko Masuo",publishedDate:"June 26th 2013",coverURL:"https://cdn.intechopen.com/books/images_new/3383.jpg",numberOfDownloads:64723,numberOfWosCitations:18,numberOfCrossrefCitations:9,numberOfCrossrefCitationsByBook:0,numberOfDimensionsCitations:32,numberOfDimensionsCitationsByBook:0,hasAltmetrics:1,numberOfTotalCitations:59,isAvailableForWebshopOrdering:!0,dateEndFirstStepPublish:"April 26th 2012",dateEndSecondStepPublish:"May 17th 2012",dateEndThirdStepPublish:"November 30th 2012",dateEndFourthStepPublish:"December 31st 2012",dateEndFifthStepPublish:"April 8th 2013",currentStepOfPublishingProcess:5,indexedIn:"1,2,3,4,5,6",editedByType:"Edited by",kuFlag:!1,featuredMarkup:null,editors:[{id:"40084",title:"Prof.",name:"Kazuko",middleName:null,surname:"Masuo",slug:"kazuko-masuo",fullName:"Kazuko Masuo",profilePictureURL:"https://mts.intechopen.com/storage/users/40084/images/system/40084.jpg",biography:"Associate Professor Kazuko Masuo, MD., PhD. is currently working as an Associate Medical Director in the Nucleus Network Ltd., Baker IDI Heart & Diabetes Institute, and an Academic Fellow in the Baker IDI Heart & Diabetes Institute, in Melbourne, Victoria, Australia. She graduated as MD and received PhD at the Department of Geriatric Medicine and the Department of Pharmacology in Osaka University Postgraduate School of Medicine, Osaka, Japan, under supervision of Professors Kumahara and Ogihara. She conducted a series of longitudinal studies over 10 years investigating weight change and neurohormonal changes, and these studies were a mile stone research to understand how obesity impacts on hypertension, diabetes, and cardiac- and renal-complications, and how to manage these conditions. She is a certificated specialist in cardiology, endocrinology, nephrology and gerontology, and in several editorial boards for medical journals. She has >100 publications in international, peer reviewed medical journals on obesity, hypertension, diabetes, genetics and renal dysfunction, 15 book chapters, and has edited 6 books.",institutionString:null,position:null,outsideEditionCount:0,totalCites:0,totalAuthoredChapters:"4",totalChapterViews:"0",totalEditedBooks:"1",institution:{name:"Baker IDI Heart and Diabetes Institute",institutionURL:null,country:{name:"Australia"}}}],equalEditorOne:null,equalEditorTwo:null,equalEditorThree:null,coeditorOne:null,coeditorTwo:null,coeditorThree:null,coeditorFour:null,coeditorFive:null,topics:[{id:"1013",title:"Pediatric Endocrinology",slug:"pediatric-endocrinology"}],chapters:[{id:"45314",title:"Insulin Resistance and Endothelial Dysfunction: Macro and Microangiopathy",doi:"10.5772/56475",slug:"insulin-resistance-and-endothelial-dysfunction-macro-and-microangiopathy",totalDownloads:5563,totalCrossrefCites:1,totalDimensionsCites:6,hasAltmetrics:0,abstract:null,signatures:"Arturo A. 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Since toxicology is a multidisciplinary science, the contributions and activities of toxicologists are widespread and diverse. Toxicologists are mainly concerned with the mechanisms of action of different agents as, we now know, all agents can lead to toxicity due to the exposure period and dose. However, for even the most known and oldest agents, the pathways or endogenous molecules they affect to create toxicity are still being investigated by scientists. As toxicologists, we also contribute to other scientific areas including medicine, physiology, and pharmacology while we receive the help from several branches of science. Toxicologists mainly recognize, identify, and quantify the hazards of foods, pharmaceuticals, workplace chemicals, household products, cosmetics, and personal care products along with toxins and venoms. Furthermore, toxicologists who work as members of academic, industrial, and governmental organizations can also develop the standards and regulations in order to protect human and animal health as well as the environment from the adverse effects of microorganisms, chemicals, or physical agents. In the modern era, toxicologists share methodologies and scientific knowledge to obtain accurate data about the unwanted effects of different agents [1, 3, 4].
Poison is any substance that leads to harmful effect/s to a living organism when taken by any route, either by accident or design. The history of poisons and poisoners has a long record dating back to the ancient times. In Homer’s
Paracelsus (1493–1541), the “Father of Toxicology,” was a physician-alchemist. He formulated many revolutionary ideas that form the basic structure of toxicology, pharmacology, and medicine today. The scientist indicated “
There is a certain difference between “a toxicant” and “a toxin” and they are not used as synonyms. Many people do not clearly know the difference and instead they refer every harmful substance as “a toxin.” Toxicants are synthetic, human-made, and toxic chemicals which are capable of causing deleterious effects on living organisms. Toxicants are significantly different from toxins not only because of their synthetic origins but also because of their production volumes and masses, distribution processes, and structural heterogeneity. They can be present in houses, workplaces, living organisms, and environment. On the other hand, toxins are small molecules, peptides, or proteins that are produced by living organisms. In general, toxins are metabolic products, which are parts of the defense mechanisms of animals, plants, insects, microbes, etc. against other living forms. The term “biotoxin” is occasionally used to explicitly confirm the biological origin. The organisms produce them in order to predate or repel (such as in the snake, scorpion, spider, jellyfish, and wasp toxins) or defense (honeybee, bee, ant, wasp, termite, and dart frog toxins) [6, 7].
The action of toxins has long been recognized and understood throughout human history. Toxins from plants are associated with murder, assassination, and suicide. The deaths of several famous historical figures have directly or indirectly involved toxins from poisonous plants. Socrates was forced suicide with a toxic alkaloid from poison hemlock (
A common characteristic of natural toxins is to cause deleterious effects with small quantities on the metabolic and physiologic functions of a living organism. Toxins usually interact with biological macromolecules like enzymes or with cellular receptors. Toxins vary greatly in structure. Moreover, their harmful effects can range from minor (such as a bee sting) to almost immediately deadly (such as botulinum toxin). A systemic toxin affects the entire body or many organs rather than a specific site. An organ toxin affects only specific tissues or organs [10].
A “venom” is a secretion of an animal (like snake, spider, and scorpion) that contains one or more toxins. Venoms usually are classified into four major groups according to their mechanisms of action: (i)
Medical toxicology is a subbranch of toxicology, which is concerned with providing the diagnosis, management, and prevention of poisoning and other adverse effects of drugs, cosmetics, personal care products, occupational and environmental toxicants, and biological agents. Medical toxicology mainly deals with the prognostic indicators of poisoning severity and predictors for the treatment. For practical reasons, much of this work has been retrospective in nature; however, it has resulted in significant aids to guide the treatment rendered by clinical toxicologists. Medical toxicologists are involved in the assessment and treatment of a wide variety of problems, including acute or chronic poisoning, substance abuse, adverse drug reactions (ADRs), drug overdoses, envenomations, industrial accidents, and other chemical exposures. Generally, physicians who are specialized in emergency medicine, poison management, and pediatrics can become medical toxicologists. Medical toxicologists work on finding new and effective antidotes and treatments in order to prevent poisonings and xenobiotic injuries. Medical toxicology is closely related to clinical toxicology, with the latter discipline encompassing nonphysicians (generally pharmacists) as well [13, 14, 15, 16].
Poisoning is a significant global public health problem. Childhood poisonings were recognized as a significant component of pediatric practice and patient morbidity in the 1930. However, little information was present on the toxicity of household products and management recommendations at that time. A Duke University pediatrician, Jay Arena, tried to systematically collect, analyze, and distribute the clinical information to physicians about childhood poisonings. In a case series, the researcher described the clinical outcome of 50 lye-poisoning cases. This was one of the first reports on the hazards of household products to children [17].
Medical toxicology has been improved by the evolution of poison control centers. Poison control centers were established to provide drug and chemical toxicity information and patient management guidance to physicians. These services were expanded to handle telephone calls from laypersons in the 1960s. Arising out of a growing concern over the rising incidence of poisoning worldwide, coupled with a lack of public awareness about its seriousness, poison control centers mainly serve for the public in order to direct information to patients and health-care professionals today. A poison control center is usually managed by a medical toxicologist who specializes in poisonings. These centers also recruit educators for poison prevention programs and provide education activities for health-care personnel and poison prevention organizations [18, 19, 20].
In 2017, 84% of poison exposures reported to US poison centers were nontoxic, minimally toxic, or had at most a minor effect. Intentional exposures were significantly more serious, with a 30-fold greater percentage of serious outcomes (major or fatal effects) compared to unintentional exposures. Exposures in teens and adults were also considerably more serious, with 19.09% of teens and 17.91% of adults having a moderate, major, or fatal effect compared to 1.10% of children younger than 6 years. In 2018, 12.1% of poisonings in the USA arose from cosmetics/personal care products, while cleaning substances (household) and analgesics caused 10.7% and 9.0% of the poisonings, respectively. In the same year, analgesics were responsible for 10.9% of all drug poisonings followed by sedatives/hypnotics/antipsychotics (9.3%), antidepressants (7.3%), and cardiovascular drugs (6.5%) [21]. According to data obtained from World Health Organization (WHO), unintentional poisonings claimed the lives of an estimated 193,460 people worldwide in 2012, and the majority of the deaths (84%) were in low- and middle-income countries. Suicide causes the loss of a million people each year and environmental chemicals such as pesticides lead to a significant number deaths annually. It is estimated that deliberate ingestion of pesticides causes 370,000 deaths each year. The problem is getting worse with time as newer drugs and chemicals are developed in vast numbers. On the other hand, snakebites are a largely underappreciated public health problem in many countries and they lead to significant challenges for medical care. While reliable data are hard to obtain, WHO estimated that about 5 million snakebites and 2.5 million envenomings occur each year. As antivenoms are not present in many parts of the world, snake venoms cause at least 100,000 deaths, 300,000 amputations, and many permanent disabilities [22].
Poisoning due to accidental or deliberate ingestion or inhalation of drugs or chemicals is a common, acute medical emergency. For a seriously poisoned patient, a hospital emergency room serves as the initial phase of treatment. For optimal care and treatment of a poisoned patient, clinical toxicologists usually recommend a methodically executed and stepwise approach. The six main steps of the initial clinical encounter for a poisoned patient are: (i) stabilization, (ii) clinical evaluation, (iii) prevention of absorption, (iv) enhancement of elimination, (v) administration of antidote, and (vi) supportive care and clinical follow-up [23, 24, 25, 26].
An antidote is a substance that can counteract a form of poisoning. There is relatively small number of specific antidotes available for clinical use as it is difficult to develop a specific antidote and the market is very narrow. Furthermore, performing clinical trials in overdose patients have also practical difficulties. Although the Food and Drug Administration (FDA) forces drug companies to develop antidotes through the Orphan Drug Act, there is still need for safer and more specific antidotes today as many antidotes in use have a relatively low margin of safety or therapeutic index [27].
Antidotes have various modes of actions. Some are competitive receptor antagonists (e.g., naloxone, and flumazenil), while some are competitive receptor agonists (e.g., adrenaline and physostigmine). Some antidotes act as competitive enzyme antagonists (e.g., ethanol). Some act as chelating agents and they are mostly used against intoxication with metals [British anti-Lewisite (BAL) and succimer for lead, desferrioxamine for iron, cobalt edetate for cyanide, and calcium for fluoride]. Some antidotes reverse toxic effects on target molecules (glucagon and octreotide), while some use physiological antagonism (benzodiazepines). In some cases, antidotes pharmacologically antagonize the effects of the toxin/toxicant. Antidotes that bind to venoms or toxins are called “antivenoms.” The antidote can also facilitate the body clearance of the toxin/toxicant and it is possible for certain chemicals to exert their antidote effects by chemically reacting with biological systems in order to increase the detoxifying capacity for the toxin/toxicant. In order to optimize the treatment of the poisoned patient, medical toxicologists must have detailed knowledge on the therapeutic use of antidotes and when to use them [28, 29].
Medical toxicology is an important field of medicine dedicated to the evaluation and treatment of poisoned and envenomated patients. Medical toxicologists mainly investigate the adverse health effects of medications, occupational and environmental toxins, and biological agents and specialize in the preventing, evaluating, treating, and monitoring an injury or illness from toxic exposure. Medical toxicologists can work in a variety of settings including emergency departments, inpatient units, outpatient clinics, occupational health settings, national and regional poison control centers, academic institutions, industry, commerce, governmental agencies, and clinical and forensic laboratories to serve for public health. Medical toxicology will a more important area of toxicology in the future, as FDA has approved 20–25 new drugs per year in the past two decades and annual approvals in the past 5 years have been in the range of 40–50 new drugs, except for a dip in 2016. Moreover, thousands of chemicals, household products, and cosmetics are introduced to the market every year. Newer, safer, and more effective antidotes should be available. Therefore, medical toxicologists should also put effort on finding antidotes for both old and new drugs as well as for environmental chemicals, toxins, and venoms. Poison control centers should also be more active and effective, particularly in developing countries, in order to reduce emergency hospitalizations and increase the quality of life.
Biomass based energy generation systems impart low environmental impact. To be specific, these systems produce a very low level of CO2 or other toxic gases or radioactive materials, unlike the ones that are produced by the fossil fuel energy systems. But we are very much reluctant to establish these traditional systems (i.e., coal, natural gas, oil -based power plants) for producing our final energy forms in power plants or vehicles [1, 2]. The estimated average price of 6.9 c/kWh from biomass-based power generation is not yet cost effective comparing to fossil fuel technologies can offer a price in the range of 4.2–4.8 c/kWh [3]. Investment cost for the biomass-based power generation technologies generally take a higher scale compared to other technologies due to diverse fuel characteristics, collection and pre-treatment of the fuel needed prior to introducing to the generation system [4]. The fuel handling requires extra installation and maneuvering cost involvement. Table 1 shows some of the established fuel densification processes used in biomass- based power generation systems.
Densification process | Type of biomass | Bulk density (kg/m3) |
---|---|---|
Without densification | Sawdust Wood Chips Straw | 47.7 209–273 40–60 |
Palletization | Wood Saw Dust Straw | 606 360–500 |
Briquetting | Wood Saw Dust husk Fruit Fiber | 505 410 250 |
Comparison of bulk density with different processes [5].
Thus, a detailed economic feasibility study must be done prior to jumping into a project.
The practical outcomes of a biomass-based energy system can be evaluated mainly from two aspects. Number one is from energy content of the biomass in a desired form and number two is economic justification of the specific power generation systems. The evaluation process follows some steps like [6]:
evaluation of costs and benefits over the years of operation. Costs involved are investment costs, fuel cost, cost of fuel collection and pre-treatment, costs for operation and maintenance, servicing and insurance against damage etc. On the other hand, benefits may be direct revenue earning or savings for replaceable energy i.e., the avoided bill costs, the incentives received from CER, or revenue earning from the selling of energy to the utility companies under certain tariff rates;
analysis of cash inflows and outflows;
evaluation of the economically effective space otherwise would have been left empty;
estimation of the energy recovery factor pertaining to the analysis done;
Sensitivity analysis for the most significant parameters.
The discounted cash flow concept can be presented in a simple equation. The total earning from the project in its life span is represented by, G. Overall return from the project activities is R with the cost incurred C. The simple relation then looks like the following Eq.
As the initial investment and the subsequent cash flows occurs in different time frames, so a time value effect is imparted to this simple equation. This time value is included in the relation using some correlation coefficients which equalize the time value of the money or the future payments of receipts are discounted. So, discounted cash flow (DCF) tries to figure out the value of an investment on the base year and highlights on how much money it will generate in the future.
Each of the future cash flows must be “deflated” first to go back to base year. So, future cash flows must be multiplied by the discount factor:
Where,
Thus, discounted cash flow is used to get Net Present Value (NPV) of an investment following the equation:
Where.
Io - initial investment.
n = years of duration of the investment.
When the net present value (NPV) results to a positive figure, it means at the end of life of investment the discounted cash flows produced throgh out the entire life possess higher inflow than the cost of the initial investment, and other associated costs and therefore, the erection of a plant is justified from a financial point of view; vice versa when the NPV is negative.
Details of net present value and other indicators that uses discounted cashflow like internal rate of return (IRR), and discounted pay back period will be discussed in details in later sections.
Economic performance is better understood with the value a product or service provides to the willing customers. A higher value means a higher price customer willingly pays for the product or service. Economic value that a customer is willing to pay for tradable goods, may be greater than the actual market price (thus creating an economic surplus) but it is not usually less [7]. Otherwise, customer would not buy the product replacing the available one. Economic performance must be justified with proper tools, so that the user of the product put their preferences over other available alternatives.
The following tools are commonly used for economic assessment of biomass-based energy projects:
Life Cycle Cost (LCC)
Net Present Value (NPV)
Internal Rate of Return (IRR)
Discounted Payback (DPB)
Levelized Cost of Energy
Profitability Index (PI)
Sensitivity Analysis
Life cycle cost (LCC) gives a basis for comparing bioenergy technologies to conventional energy technologies. This method accounts the total system cost during a specified time period (life of the project). It comprises the initial investment and operational cost during the useful life. LCC is the sum of total cost that includes not only initial investment but also costs directly related to repair, operation, maintenance, transportation to the site, and fuel used to run the system. All of these costs are discounted with a MARR to the present value (PV). An LCC analysis allows the designer to study the effect of using different components with different reliabilities and lifetimes. It is also helpful for comparing costs of different designs and/or determining whether a hybrid system would be cost –effective option.
The equation of life cycle cost analysis is [8].
LCC = Life cycle cost.
C = initial cost of installation- the present value of the cost on capital resources.
The net future earnings are discounted to the base year with the rate selected to justify minimum attractive rate of return (MARR). The investment is deducted from the present sum of benefits. This value is called NPV [9].
Time value of money is included in net present value analysis
This method considers cash flows disregarding the accounting profits. All cash flows are considered but non-cash flow benefits are not taken into consideration.
Net present value method is consistent with the objective of profit maximization.
The calculation is complex and hence requires skill handling.
It is particularly difficult to quantify the return on investment in an economy where inflation varies year to year and hence necessitates year to year adjustment
Net present value method does not consider hidden costs or incomes not shown as cash flow.
Misleading results are probable when the projects are mutually exclusive. In that case profitability index is a more suitable method for summarizing the output.
Internal rate of return discounts all the cash back, providing zero NPV throughout the investment life of the project [9].
This method uses a widely understood percentage rate as the decision variable to compare mutually exclusive investments or individual investments whether public or private. Incremental internal rate of return analysis is preferred to individual analysis by analysts.
Time value of money is taken in to account
Negative values can be used
No need to have a precise calculation of discount rate, only a guess is supplied for assessment.
The output of IRR method is a rate, which can directly measure of project profitability.
The calculation of IRR is to go through a trial-and-error method so it is difficult to attain the final point if done manually.
It is assumed that cash flows generated by the project can be reinvested at its internal rate of return. This is quite unrealistic.
IRR can have a negative value. Moreover, there is a possibility of having multiple internal rates of return to be produce for the same project.
There exists a huge theoretical preference for NPV analysis for project appraisal and investigations suggests that corporate executives prefer internal rate of return (IRR) analysis over net present value analysis. Actually, managers like to compare projects of varying sizes in terms of predictive performance, using IRR as a decision metric put a summary value of the firm performance rather NPV returns a value of merit figure not a rate. IRR method is an obviously a shortcut of assessing the economic viability of a project.
Discounted payback period is a modified version of the payback period that accounts for the time value of money. This is the time period when the project cash inflows reach a ‘break even’ or to get the point where the net cash flows generated is equal to the initial cost of the project. Discounted payback period can be used to evaluate the profitability and feasibility of a project [10]. DPP can be calculated by solving the following Equation [11].
Where,
No track is kept for the cash flows in the project life after the recovery period is achieved.
This method may not be consistent with the goals of profit maximizing for the business owners. And, the cash flows occur after the DPP attained are generally becomes insignificant but practically all the cash flows through out the span of economic life contribute the project outcome.
Discounted payback period method plays a minor role in mutually exclusive project selection.
Discount rate is considered fix for the whole span of project. But in practical, the rate must be adjusted for inflation in a regular interval.
Table 2 shows a sample Microsoft excel worksheet to evaluate NPV, IRR, and Payback Period for a biomass- based energy project. Levelized cost of energy is a uniform equivalent rate that is calculated from the revenue stream of an energy project. The revenue generated is discounted at IRR to yield an NPV. The calculated NPV is converted to annual payments and then divided by the project’s annual energy output. The unit stands at $/kWh. This LCOE is a first order parameter to evaluate projects attractiveness. The LCOE should be at a comparable level to defend the competitor’s price. LCOE analysis of power generation plant is a price estimation based on specific assumptions. The assumptions are made for the simplification of calculations. A standard form used by most of the industries worldwide is as below:
Year | Generation (kWh) | Revenue Earning (MYR) | Cost of sales (MYR) | Gross Profit (MYR) | Operating Expenses (MYR) | CER/Tax (MYR) | EAT (MYR) | Cumulative Earning (MYR) |
---|---|---|---|---|---|---|---|---|
0 | −54,576,000 | −54,576,000 | ||||||
1 | 65,700,000 | 13,797,000 | 7,450,366 | 6,346,634 | 586,146 | 2,436,500 | 8,196,988 | −46,379,012 |
2 | 70,080,000 | 14,716,800 | 7,972,960 | 6,743,840 | 606,827 | 2,601,500 | 8,738,513 | −37,640,499 |
3 | 79,978,800 | 16,795,548 | 8,889,223 | 7,906,325 | 628,282 | 2,976,215 | 10,254,258 | −27,386,241 |
4 | 79,978,800 | 16,795,548 | 9,172,407 | 7,623,141 | 650,544 | 2,976,215 | 9,948,812 | −17,437,429 |
6 | 79,978,800 | 16,795,548 | 9,767,059 | 7,028,489 | 697,617 | 2,976,215 | 9,307,087 | 1,502,865 |
7 | 79,978,800 | 16,795,548 | 10,079,180 | 6,716,368 | 722,497 | 2,976,215 | 8,970,086 | 10,472,951 |
8 | 79,978,800 | 16,795,548 | 10,401,620 | 6,393,928 | 748,321 | 2,976,215 | 8,621,822 | 19,094,773 |
9 | 79,978,800 | 16,795,548 | 10,734,737 | 6,060,811 | 775,127 | 2,976,215 | 8,261,899 | 27,356,672 |
10 | 79,978,800 | 16,795,548 | 10,734,737 | 6,060,811 | 802,955 | 2,976,215 | 8,234,071 | 35,590,743 |
11 | 79,978,800 | 16,795,548 | 11,800,419 | 4,995,129 | 831,847 | 1,040,821 | 3122461.5 | 38,713,205 |
12 | 79,978,800 | 16,795,548 | 11,538,820 | 5,256,728 | 861,845 | 1,098,721 | 3296162.25 | 42,009,367 |
13 | 79,978,800 | 16,795,548 | 11,910,593 | 4,884,955 | 892,996 | 997,990 | 2993969.25 | 45,003,336 |
14 | 79,978,800 | 16,795,548 | 12,294,800 | 4,500,748 | 925,346 | 893,851 | 2681551.5 | 47,684,888 |
15 | 79,978,800 | 16,795,548 | 12,691,877 | 4,103,671 | 958,944 | 786,182 | 2358545.25 | 50,043,433 |
16 | 79,978,800 | 16,795,548 | 13,102,279 | 3,693,269 | 993,842 | 674,857 | 2024570.25 | 52,068,003 |
17 | 79,978,800 | 16,795,548 | 13,526,474 | 3,269,074 | 1,030,094 | 559,745 | 1,679,235 | 53,747,238 |
18 | 79,978,800 | 16,795,548 | 13,964,952 | 2,830,596 | 1,067,755 | 440,710 | 1322130.75 | 55,069,369 |
19 | 79,978,800 | 16,795,548 | 14,418,218 | 2,377,330 | 1,106,884 | 317,612 | 952,835 | 56,022,203 |
20 | 79,978,800 | 16,795,548 | 14,886,798 | 1,908,750 | 1,147,541 | 190,302 | 570,907 | 56,593,110 |
21 | 79,978,800 | 16,795,548 | 15,333,402 | 1,462,146 | 1,181,967 | 70,045 | 210,134 | 56,803,244 |
12.40% | ||||||||
61274142.67 | ||||||||
6698142.67 | ||||||||
5.84 |
Sample Microsoft excel worksheet to evaluate NPV, IRR, and PBP [12].
where TIC, is the total investment cost in the year, OM is the annual operation and maintenance cost, FC is the annual fuel cost, EP is the estimated annual generation and T is life span of the project in years. Table 3 shows a comparison of LCOE values of different renewable energy sources at different areas. Biomass based energy can be seen as an attractive mode of energy source in the range 0.03–0.07 $/kWh which is much lower margin than solar PV [13].
Country | Biomass | Geothermal | Hydro | Solar PV | Onshore wind | Offshore wind |
---|---|---|---|---|---|---|
China | 0.03 | na | 0.03 | 0.10 | 0.05 | 0.14 |
Europe | 0.07 | 0.12 | 0.08 | 0.15 | 0.065 | 0.15 |
Middle East | 0.07 | na | 0.07 | 0.14 | 0.09 | na |
India | 0.04 | na | 0.04 | 0.09 | 0.07 | na |
USA | 0.07 | 0.09 | 0.05 | 0.13 | 0.05 | 0.12 |
Average LCOE from renewable energy source in 2017 ($/kWh) [13].
Profitability index is the ratio of the future cash flows to initial investment. If the value is 1 than the project is at breakeven point and greater than one means project is profitable. If mutually exclusive projects are ranked based on PI than it eases the decision making. If an individual project shows to have a PI ratio less than 1 then, it indicative that the future cash inflows cannot cover the expenditures.
The simple relation of profitability index in terms of NPV and I0 can be written as,
The present value of a single payment made in the future can be written as, [8].
Profitability Index (PI) is a relative parameter. It shows how much present value of cash inflows generated for each dollar invested. It is a ratio not having unit unlike NPV.
Accept the investment project proposal if index is greater than 1.0.
Reject the project proposal if index is smaller than 1.0.
When the index equals 1.0, it makes it indifferent whether accept or reject.
So, the investment alternatives should be ranked from highest index to lowest one.
Three mutually exclusive projects are under consideration for decision making. The economic attributes are as follows:
Project | A | B | C |
---|---|---|---|
Initial investment | $40,000 | $42,000 | $55,000 |
Year 1 profit | $ 12,500 | $ 13,000 | $ 13,500 |
Year 2 profit | $ 12,000 | $ 12,000 | $ 12,500 |
Year 3 profit | $ 11,500 | $ 11,000 | $ 11,500 |
Year 4 profit | $ 11,000 | $ 10,000 | $ 10,500 |
Year 5 profit | — | $ 9000 | $ 9500 |
Year 6 profit | — | — | $ 8500 |
Economic life | 4 years | 5 years | 6 years |
Salvage value | $7000 | $8500 | $10,000 |
The opportunity cost of capital is 10%. Identify the best alternative among those three using profitability index.
Solution: Profitability index for the three mutually exclusive projects can be calculated as:
Profitability Index of Project A:
PIA =
Profitability Index of Project B:
PIB =
Profitability Index of Project C:
PIC =
Since project B has the highest profitability index, it should be chosen among the three alternatives.
A sensitivity analysis illustrates how much the merit figures will change in response to a given change in an input variable. There always exist some critical parameters which have significant impact on the final sought parameters like Net present value or internal rate of return, IRR). For example, the estimate of energy produced from a biomass-based energy project is often a major factor. Cost of the project, and estimated operation and maintenance cost are other factors generally considered to have greater impact in a sensitivity analysis.
A sensitivity analysis done for the operation of a power generation plant with revenue earning, costs of generation, and operational expenses as the parameters to have significant impact on IRR and Payback period, PBP. These parameters are plotted with ±10% change from the business-as-usual scenario. Table 4 below gives the sensitivity analysis done in the three parameters, revenue earning; the cost of goods sold and operational cost and the resulted changes in IRR and payback period. When all other parameters are fixed and revenue earning is declined by 10% then the IRR becomes −3.13%. This negative IRR means the project cannot payback the investment in its lifetime and thus the payback period is not available in this condition. Similarly, the revenue earning increase by 10% causes IRR changes from 4.31% (base case) to 9.10%. Hence project turns to earn positive NPV and the corresponding payback period is 7.6 years only. Revenue earning is the sensitive factor in the case of biomass-based power generation project.
−10% | −5% | 0% | +5% | +10% | ||||||
---|---|---|---|---|---|---|---|---|---|---|
IRR | PBP | IRR | PBP | IRR | PBP | IRR | PBP | IRR | PBP | |
Revenue | −3.1 | NA | 1.2 | 13.8 | 4.3 | 10.3 | 6.8 | 8.7 | 9.1 | 7.6 |
Costs | 7.4 | 8.5 | 6.0 | 9.3 | 4.3 | 10.3 | 2.3 | 12.1 | 0.0 | 15.6 |
Operation and Maintenance | 4.5 | 10.1 | 4.4 | 10.2 | 4.3 | 10.3 | 4.2 | 10.5 | 4.0 | 10.6 |
Sensitivity analysis of the project IRR and payback period.
As the operational cost of a plant run on biomass cannot be expected to decrease over the years, the first cost of project installation must be curtailed. These can happen if the government ensures the tax credit and subsidy in the import items of the equipment needed.
Figure 1 shows the sensitivity of IRR with respect to revenue earning, the total cost of power generation and operational cost of generation. The internal rate of return of a biomass based power generation project is highly sensitive to revenue earning and cost of investment. The operational cost shows a less sensitivity. Perhaps, the earning is based on the selling to the utility company and the rate if low the internal rate of return is low. The implication of the IRR sensitivity curve is that the pricing of the energy generated should be increased to make the plant operation competitive with traditional power generation units.
Sensitivity of IRR at the variation of revenue earning, generation cost, and operational cost.
Biomass based power generation is very much dependent on the source of biomass. There is a wide range of biomass feed stocks and can be procured from a variety of sources. The price of biomass is a critical factor as it is directly related to its thermal properties (calorific value, moisture content, bulk density and homogeneity etc.). The economic analysis is based on the palm oil-based fuels. Table 5 shows the cost structure of different types of biomasses needed for a typical combustion-based plant of capacity 10 MW.
Fuel type | In-sourced (ton/year) | Outsourced (ton/year) | Price (MYR/ton) | Cost (MYR) |
---|---|---|---|---|
EFB | 30,500 | — | 16 | 4,88,000 |
EFB | — | 52,000 | 36 | 1,872,000 |
Fruit Fiber | 22,000 | — | 37 | 8,21,400 |
PKS | 15,000 | 115 | 1,782,000 | |
Wood | 2230 | 50 | 111,500 | |
68,200 | 54,230 | 5,075,400 |
Total biomass price for combustion-based plant [12].
The net present value (NPV), internal rate of return (IRR), and payback period (PBP) has been re-calculated if half of the total investment is taken as loan from a financing company (bank, government subsidy or other stake holders of the concern). The earnings before interest and tax which is called EBIT are calculated by deducting the operating cost from the gross profit. The current earnings are discounted cash to calculate the net present value of the total plant. The NPV, IRR and PBP period is seen to have changed significantly. The detail cash flow analysis for a typical biomass combustion power plant and a typical biomass gasification power plant is presented in Table 6.
Year | Generation (kWh) | Revenue Earning (mill MYR) | Cost (MYR) | Gross Profit (MYR) | Opex (MYR) | Re-pay of loan (MYR) | Certified Emission reduction (MYR) | EAIT (MYR) | Cumulative Earn (MYR) |
---|---|---|---|---|---|---|---|---|---|
0 | (3% p.a.) | −54,576,000 | −54,576,000 | ||||||
1 | 65,700,000 | 13.79 | 7,450,366 | 6,346,634 | 586,146 | 3,667,279 | 2,436,500 | 4,529,709 | −50,046,291 |
2 | 70,080,000 | 14.72 | 7,972,960 | 6,743,840 | 606,827 | 3,667,279 | 2,601,500 | 5,071,234 | −44,975,057 |
3 | 79,978,000 | 16.80 | 8,889,223 | 7,906,325 | 628,282 | 3,667,279 | 2,976,215 | 6,586,979 | −38,388,078 |
4 | 79,978,000 | 16.80 | 9,172,407 | 7,623,141 | 650,544 | 3,667,279 | 2,976,215 | 6,281,533 | −32,106,545 |
5 | 79,978,000 | 16.80 | 9,464,912 | 7,330,636 | 673,644 | 3,667,279 | 2,976,215 | 5,965,928 | −26,140,617 |
6 | 79,978,000 | 16.80 | 9,767,059 | 7,028,489 | 697,617 | 3,667,279 | 2,976,215 | 5,639,808 | −20,500,809 |
7 | 79,978,000 | 16.80 | 10,079,180 | 6,716,368 | 722,497 | 3,667,279 | 2,976,215 | 5,302,807 | −15,198,002 |
8 | 79,978,000 | 16.80 | 10,401,620 | 6,393,928 | 748,321 | 3,667,279 | 2,976,215 | 4,954,543 | −10,243,459 |
9 | 79,978,000 | 16.80 | 10,734,737 | 6,060,811 | 775,127 | 3,667,279 | 2,976,215 | 4,594,620 | −5,648,839 |
4.32% | |||||||||
55,737,400 | |||||||||
1,161,400 | |||||||||
10.34 |
NPV, IRR, and payback period of a typical biomass combustion-based power plant with 50% loan at 3% p.a. [12].
The loan financed project seen to have NPV, IRR, and PBP values MYR 1.16 million, 4.32%, and 10.34 years respectively for the combustion-based plant. The changes in economic performance parameters are significant and can not be accepted from economic viability point of view.
The advantage of biomass- based power generation relative to other available renewable enrgy forms is that it can be availed as 24/7 basis as baseload power supply. The challenges come first is the continuous and adequate supply of the feedstock in right form and at proper condition regarding the usage in the right technology whether combustion or gasification.
Energy from biomass is a need of time to face the future energy challenges that would arise by the rapid depletion of fossil fuels. Biomass extraction for energy purpose is acceptable only if it is justified economically and socially, at the same time its strategy must aim at sustainability. A drive without sustainability would create a system to be abandoned in near future. In pursuit of sustainability all the moves should be towards achieving and using technologies on the basis of economic feasibility and viability. The selection of energy production technology would be so as to sustain the ecological conditions and not to instigate the food versus fuel conflict concerning the land and water use. Also, there should have a positive environmental balance for the whole life cycle of the biomass used for energy extraction. The best alternative to the combustion-based plant a biomass integrated gasification combined cycle (BIGCC) plant can be suitable pelleted or briquetted biomass with low-cost technology and developed locally.
Biomass integrated gasification combined cycle
Clean development mechanism
Certified emission reduction
Internal rate of return
Minimum attractive rate of return
Malaysian Ringgit
Net Present Value
Payback period
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