From: Essential Information <ei@igc.apc.org>
Newsgroups: sci.energy
Date: 31 Dec 92 13:54 PST
Subject: Re: Energy Ideas - HVAC-2
Nf-ID: #R:cdp:1466300134:cdp:1466300140:000:3582
Nf-From: cdp.UUCP!ei    Dec 31 13:54:00 1992



LIFE-CYCLE COST ANALYSIS

While the calculation of the life-cycle cost of an electric
vapor-compression or a natural gas absorption air conditioning
system is highly site-specific, the following generalized
calculation demonstrates the issues surrounding a selection. As
shown below, economics weigh heavily against absorption systems.
Even considering a very low purchase price for natural gas, the
payback period for an absorption chiller is over 15 years.
However, a Demand-Side Management rebate, such as the $70,000
rebate given to the State University of New York at Buffalo for
300 tons of gas cooling (see p. 5), can drastically reduce this
payback period; that rebate cuts the payback perit over
one year. 

This calculation probably underestimates the cost of electricity
for a chiller. Many electric utilities charge a high rate for
electricity to facilities with a high demand, especially during
the day when demand is highest.

Life-cycle cost analysis should, where possible, include
so-called "external"costs, including environmental and social
costs. A few states have estimated the cost of reducing carbon
dioxide and sulfur dioxide emissions and have used these figures
as the costs of pollution in least-cost planning for utilities. 

In this calculation, the low coeffecient of performance (COP) of
the absorption chiller as compared to the electric chiller
minimizes the difference between burning natural gas and burning
coal to generate electricity. Including the reduction of
pollution does not enhance the economic attractiveness of an
absorption cooler. Other factors which do not have estimated
costs, such as the elimination of the use of CFCs and HCFCs,
would give absorption cooling a stronger advantage.

                                        Electric       Nat. Gas
Size (tons) [1]                         300            300
Purchase Price [2]                      $75,000        $150,000
Site COP [2]2                           5              1
Heat Removed Annually (therms) [3]      20,000         20,000
Energy Consumed Annually                4,000          20,000
  (Heat Removed/COP (therms))
Cost of Energy ($/therm) [4]            2.05           0.17
Annual Energy Cost                      $8,200         $3,400
  (Consumption * Cost)
20-Yr. Economic LCC                     $239,000       $218,000

Source Energy Consumption (therm) [5]   11,425         20,000
Annual CO2 Emissions [6]                120            116
Annual SO2 Emissions [7]                1,400          0
Cost of CO2 ($/ton) [8]                 23             23
Cost of SO2 ($/ton) [9]                 1,500          1,500
Total Annual Pollution Cost             $3,180         $2,668

Total 20-Year LCC                       $315,200       $271,360

1 - Same size as gas-engine-driven chiller described on p. 5.
2 - Mike Byars, Trane Company
3 - Estimated from performance data for chiller described on p.5.
4 - Electric price = average listed in Energy User News
  Gas price = district purchase price as described on p. 6.
5 - Assuming 35 percent efficiency for electricity generation and
transmission; site and source energy for natural gas are equal.
6 - According to U.S. EPA, coal combustion emits about 210 lbs.
CO2 per MMBtu and natural gas combustion emits about 116 lbs. CO2
per MMBtu.
7 - According to U.S. EPA, coal combustion emits about 1.2 lbs.
SO2 per MMBtu and natural gas does not emit sulfur dioxide.
8 - Cost as determined for State of Massachusetts by Tellus
Institute.
9 - Cost as determined for State of Massachusetts by Tellus
Institute.