buildings, warehouses, laboratories, instrumentation and piping<br>works, etc. The second one is the indirect costs of the first investment<br>such as engineering consulting fees and other contingency<br>allowances.<br>In this study, we adopted two techniques to estimate the capital<br>investment costs. Whenever possible, costs of machines and<br>equipments were estimated directly from manufacturers’ price<br>quotation, particularly those for special processing equipments<br>used only in this industry, e.g. molecular sieve, etc. The second technique<br>is to estimate costs of machines and equipments based on<br>their historical prices adjusted to the present prices in the reference<br>year. The second technique was adopted only when the first technique<br>was unavailable. We found that the total equipment costs<br>were about 413 million baht, or 10.325 million USD (values in year<br>2005).<br>The indirect costs were estimated from the certain average percentages<br>of the total direct cost of the plant, as recommended by<br>Garrett [4]. In this study, the total capital investment costs were<br>found to be 1208 million baht, or equivalent to 30.2 million USD,<br>for a project life of 20 years, with a capacity of ethanol production<br>of 150,000 l/day. All major items of the investment costs are<br>summarized and shown in Fig. 2.<br>A breakdown of the total capital investment cost of the ethanol<br>production as a unit cost (the capital cost per liter of the ethanol)<br>was then calculated by amortization, recovered over the life time<br>of the plant. This can be obtained by a common annualized capital<br>cost equation:<br>A = P<br><br>i (1 + i)n<br>(1 + i)n − 1<br><br>(2)<br>where A is the annual payments (baht or USD/year); P is the present<br>worth of the first investment cost (baht or USD); i is the annual<br>interest rate; and n is the project life in years.<br>The annualized capital investment cost is then divided by annual<br>amounts of ethanol produced to obtain the capital cost per liter of<br>the ethanol. In this study, the capital investment cost per liter of<br>the ethanol was found to be 2.13 baht or 5.33 cents, for the annual<br>interest rate of 6% and the project life of 20 years.
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