EVALUATING THE ENERGY COST BENEFIT OF A BIOMASS FIRED COMBINED HEAT AND POWER PLANT

U.P Onochie, Egware H. O, C.C. Kwasi-Effah & O.O Ighodaro

Abstract

The feasibility of a proposed project is essentially determined by the economic savings accruing to the project in other to justify the huge capital investment to be made. This study investigated the economic potential of incorporating a back pressure steam turbine, steam generator and other auxiliary components into a process system in the Nigerian Institution of Oil Palm Research (NIFOR). Data from a proposed project with electricity generation capacity of 3.625MW reported in a research work was used. From the economic/financial analysis conducted in this study, it was observed that with an estimated capital investment of $2, 000,000, there would be a cash inflow of $388, 990.362 per annum. It was also observed that electricity demand by NIFOR from the National Grid would drop from 1443200kWh to 1051380.8kWh per month, consequently reducing the cost of electricity and savings to $488, 990.362 per annum. The internal rate of return is 36.42% while the simple payback period for which the project would payback itself is 5.14yrs after which the plant would continue to generate more revenue for the Institution. The Net Present Value (NPV) is also positive which ultimately indicates that the proposed project is essentially valuable based on the financial analysis and therefore should be adopted by the Nigerian Government and the private investors. Read full PDF

Keywords: Energy Cost, Economic Viability, Electricity, Oil Palm Residues, Fuel Pellets, Heat and Power

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