Notes for CHEE 332 Report

Transcription

1 Notes for CHEE 332 Report - binary VLE data should be from a reputable source (ex. not from somerandomwebsite.com) and if you are using Perry's Handbook then recognize that the data is not originally from there - keep it concise and to the point - should be a formal report you would be happy to give to your boss - explain/ define all short forms and variables - number equations and label tables and figures and mention them in the text; there should be no figures that we are left trying to figure out why it is there... if it seems out of place, leave it out or add a new paragraph explaining it - headings are often overlooked, but can be used to make a very clear and understandable presentation (introduction or background is fine but make sure most of the headings are descriptive) - Minimum of 3 HYSYS models -> we want you to have a firm grasp of how to modify the parameters to achieve the best result (we are not saying what the best result is and there is no single right answer) and although many optimized simulations may be compared, try to limit the explanations to the most significant and explanatory models (not 10 models showing slightly different changes to 1 parameter) - a nice concluding section can make or break the report -> while repetition is not needed in the rest of the report, it is fine to repeat things here in order to make a clear final statement (there is no right answer, just the best one you find with the knowledge and tools you have) - justify...justify...justify :) If you chose to change a whole bunch of things in your HYSYS model...why? If you decided to use a certain type of condenser...why? If you size the column in HYSYS, what equations/ correlations are being used by HYSYS? etc...

2 General Report Ideas Note: This is a guideline, please do not exactly copy these sections as this is not the rubric and this does not include everything. Summary of the Report: executive summary type thing Table of Contents, Figures and Tables: a Table of contents is always useful Introduction: Overview of why this project is important and what the goal is as well as any background you want to include. Small Scale Testing Section: McCabe-Thiele diagram and related information Pilot Plant Results (flows, compositions, etc.) Tray Efficiencies Scale-up: Requirements for the production and scale-up (azeotrope, flows) Thermodynamic model choice (justify) HYSYS models Model choice (justify - duties? - parameters explored?) Economics and Feasibility Parameters for pricing explored and justified (explore ChemEcon and see what the parameters are for estimating these costs) Materials of construction (prices, chemical compatibility) Capital Cost Annual Cost Cumulative discounted cash flow The Internal Rate of Return (IRR) Any other things that can be used to analyze profitability of column Environmental, Health and Safety Considerations Do your best to give a reasonable section here that includes plant workers, and local considerations as well sustainability Conclusions

3 Chem Econ The purpose of this handout is to help CHEE332 groups understand the portion of Chem Econ that relates to the profitability and risk analysis. This handout is meant to link the finance and risk analysis theory to the outputs generated by Chem Econ. It is assumed that all the chemical plant equipment (column) has been sized and entered into the sheet Equipment and Utilities and that price estimates for raw materials and products have been found and entered into the sheet Materials. The following sections give relevant information about the worksheet profitability. It is not required that you use all sections for your report. Tips for using Chem Econ In the Parameters tab, you will need to use/change the following values: - Determine the current Chemical Engineering Plant Cost Index (CEPCI) by extrapolating the annual index in the section of the Chemical Engineering Magazine. - example 95% x 24h x 365 days) - Minimal Acceptable Rate of Return (MARR) or Discount Rate = 15% -> many companies will use a MARR of 12%, however companies seeking to operate in a more volatile market may choose to have a higher MARR In the Materials tab: - Liquid waste disposal fee of $60/1000m 3 Assume: - Plant life of 15 years There is no easy way to correct for construction labour efficiency in ChemEcon. The rumor has it that this value is about 1.3 x of gulf coast hours for Kingston (for Fort McMurray it is about 1.7). Thus, we should state in the report that capital costs are based on gulf coast labour rates and efficiencies, and that the true capital cost will be slightly higher. A website that provides heating values for different fuels The pdf of the heating values will also be posted on the website. Some information on government subsidies for biofuel production in Canada.link Annual Revenues and Costs The excel sheet named profitability shows the revenues and costs on an annual basis. The costs are divided into different categories. Students do not need to change any of the annual revenues or costs. Revenues and costs are in dollars for the given year and have not been discounted to year 1 dollars.

4 Total Capital Cost (cell G39) This is the sum of the total fixed capital. It does not include the working capital (cell D41). The total capital cost is split over the firs three years of operation. Cash Flow (row 48) This row gives the sum of all the revenues and costs for a given year. These values are in dollars for the given year. Discounted Cash Flow (row 50) This is row gives the cash flow for each year in year 1 dollars. The discounted cash flow is calculated using the discount factors in row 49. Accumulated Discounted Cash Flow (row 51) The Accumulated Discounted Cash Flow is the sum of the discounted cash flows. The Accumulated Discounted Cash Flow in any year is equal to the Net Present Value of all cash flows up to that year. This row is plotted on the chart Cumulative Discounted Cash Flow. It lets the user see if and when the Net Present Value of the project becomes positive. Net Present Value (cell F3) This cell is calculated by summing the Discounted Cash Flows in row 50. If the project has a life of eight years, then only the first eight discounted cash flow should be summed. The Net Present Value in cell F3 should match the Accumulated Discounted Cash Flow (row 51) in the year of project termination. Payback Period (cell F4) This is the amount of time it takes a project to recover its initial capital cost ignoring the time value of money. In Chem Econ year 1 is not included as part of the payback period. Also note that the capital cost is distributed over the first three years.

5 Discount Rate, i, MARR, Hurdle Rate (cell E12, Parameters worksheet) The discount rate is also known as the interest rate (i), MARR or hurdle rate. The Internal Rate of Return can be found by changing the discount rate until the NPV equals zero. In more specific terms, the IRR of an investment is the discount rate at which the net present value of costs (negative cash flows) of the investment equals the net present value of the benefits (positive cash flows) of the investment. The higher a project's IRR, the more desirable it is to undertake the project. Assuming all projects require the same amount of up-front investment, the project with the highest IRR would be considered the best and undertaken first. Tornado Plot The Tornado Plot is generated when the Click to do Sensitivity Analysis button is pressed. The years selected in the Net Present Value calculation (cell F3) are used to generate the Tornado Plots. There is an error with the Tornado plot generator. The plot will not draw bars that pass through the axis at NPV=0. This means that if the minimum NPV for a variable is less than zero but the maximum NPV is greater than zero the bar on the tornado plot will be incorrect. If you use Tornado Plots in your risk analysis this error should be corrected. The variables Sales Revenue actually means Product Price. This is because Revenue = Product Price * Amount. Our plant will produce a constant amount of product each year therefore if the Revenue increases by 10% the only way to cause this 10% increase in Revenue is to increase Product Price by 10%. Cumulative Probability Distribution The Cumulative Probability Distribution is the result of a Monte Carlo simulation using the uncertainty ranges from the Sensitivity Analysis Section. This simulation is equivalent to running thousands of random cases and calculating the NPV for each case. Figure 1 can be interpreted as follows: The probability of having a NPV less than 0 is 20%. Or alternatively: The probability of having a NPV greater than 5000 is 32%.

6 Percent Probability Cumulative Probability Distribution NPV Figure 1. Sample Cumulative Probability Distribution from Chem Econ

7 CHEE 332 Final Project Column Reboiler and Condenser Both the reboiler and condenser are heat exchangers in the distillation column and use Fourier s equation: Q Duty (from HYSYS) U overall heat transfer coefficient (from Perry s) A surface area ΔT lm - log mean temperature difference (LMTD) F LMTD correction factor for non-counter current flow (=1 if isothermal, worst case scenario design =0.8) Reboiler Condenser Efficiency Individual tray efficiencies can be found as follows: where E MV is the Murphree vapour efficiency, n is the stage being examined, n+1 is the stage below and is the stage below and y n * is hypothetical composition of the stage in equilibrium