Xyl/IA Sample Clauses

Xyl/IA. Effects of scale All scenarios have been developed for a capacity of 150,000 t dry matter, expect for the case of rice straw. In this case, the work of WP1 has revealed that also a capacity of 500,000 t could be feasible in the selected case study region in India. The effects of upscaling the plant’s capacity are therefore explored only by taking the example of rice straw in India. Figure 28 shows the results from changing the capacity in the Xyl/IA standard scenario from 150,000 t to 500,000 t of rice straw. Since the function for the estimation of the fixed capital costs (FCI) is non-linear (see section 3.1.1), costs do not increase at the same rate as the revenues do. The model therefore accounts for returns-to-scale. Due to these assumed returns-to-scale, when moving to a capacity of 500,000 t of rice straw, this may in fact lead to high annual profits as Figure 28 shows. Figure 28: Comparison of capacities in the rice straw scenario Source: nova 2013 In the inter-project harmonization document (Xxxxxxxxxx et al. 2012), it had been decided to apply the following scale relationship for capital costs: Cost B = Cost A (Scale B / Scale A)0.7. The default value of the scale factor (0.7) had been chosen in line with literature and engineering convention (Xxxxxx et al. 2003). When applying this formula to the FCI as estimated for a capacity of 150,000 t, the results indicate annual profits in the range of 30 mln EUR for the larger capacity of 500,000 t, compared to about 40 mln EUR as obtained from the current model. Apparently, the current model implies greater returns-to-scale. Evidently, the actual effects of upscaling the capacity could only be proven by empirical evidence.