Steps in using CAPCOST from the CD in Turton et al

Wilcox home × ChE design home × Profession × General × Properties × Equipment × Separation × Aspen + × HYSYS & UniSim × Costs × Safety × Case studies × Excel × MATLAB × Experiment Design

Steps in using CAPCOST from the CD in the 2^nd edition of Turton et al.

Tutorial videos: UVW site ; From the CD in the text

1. Develop a list of all equipment specifications and utilities requirements. Include only real equipment and not fictional equipment required for simulation, e.g. using HYSYS. For a reactor, include both its total volume and its heat transfer surface area. (For a tubular packed bed reactor, assume that the total volume is twice the volume inside the tubes. The heat transfer area is the number of tubes X tube length X tube circumference.) Select the material of construction for each piece of equipment using Materials Selection.

2. Make a list of the flow rates of all feed streams, product streams, and waste streams. Note that these must all be above 1-atm pressure. Liquids must be above their freezing points and below their flash points.

3. Find the latest value of the Chemical Engineering Chemical Plant Index (CEPCI) at the end of the latest issue of Chemical Engineering (Magazine): TP1.C3.

4. Find the current costs of industrial quantities of your raw materials, products, electricity, natural gas, and fuel oil using the sources given at costs reference page. Note that CAPCOST requires utility costs in $/GJ. Also find the current salary + benefits for operators (http://www.bls.gov).

5. Open CAPCOST in Excel. Note that its macros must be operational. Save often while working, as there have sometimes been bugs in CAPCOST that can cause problems. Because it may be necessary to start over, it is also a good idea to rename the file each time you save it, e.g., acetone1.xls, acetone2.xls, acetone3.xls, etc.

6. Go to the Equipment Summary page in CAPCOST (far left tab at bottom).

7. Enter the value of CEPCI found in step 2.

8. Add all of the equipment from step 1. Note that all pressures are in barg or psig, i.e. gauge pressure. (To convert from bar to barg, subtract 1.013. To convert from atm to psig, subtract 1 and multiply by 14.7.) If CAPCOST doesn’t have a desired type of equipment, you will have to estimate its price separately and enter it into CAPCOST as User Defined. Note the definitions. For its built-in equipment and materials, CAPCOST automatically calculates the purchase price and the bare module factor corrections for pressure and materials, as in Turton Appendix A. For materials not included in CAPCOST, use the cost data at Materials Selection to estimate materials factors. Give both a number and a name to each piece of equipment, by clicking on the cell in column A and replacing CAPCOST’s default designation. For example, if E-302 is actually E-304, the reactor feed heater, then rename it something like “304: reactor feed heater”. It may be necessary to use your mouse to make column A wider and to narrow the margins to accommodate a long name when printing. (Some students have reported that when they attempted to delete equipment with such a new designation by Edit Equipment / Remove this caused CAPCOST to crash. Apparently, this can be avoided by adding the new designation after that assigned by CAPCOST.)

Reactors: If your reactor type is not listed, enter both a vessel with its volume and a heat exchanger with its heat transfer surface area. That is, each reactor will be listed twice in the list of equipment.
Distillation columns: In addition to the column itself, include a reboiler, condenser, reflux pump, and reflux accumulator. Make certain you include safety factors. For tray columns, divide the number of theoretical trays by an efficiency, e.g. from heuristics. For packed columns, multiply the number of theoretical trays by HETP. If the resulting height-to-diameter ratio exceeds that recommended by heuristics, divide the column into two parts with a pump in between for the liquid.
Pumps: Don’t forget to specify a spare. Drivers (motors) are included with the pump in CAPCOST, so do not list separate drivers as you will be counting them twice.
Compressors require drivers (motors), but usually not spares. The motor power must exceed the compressor power because the motor and drive efficiency are not 100%. Warning: If a compressor power exceeds those available for the type selected, CAPCOST will warn you that 2 are needed. It may then enter the cost for only 1, but a motor power large enough for both; check by entering a smaller compressor that does not give this warning. If you do get this error, you must delete those entries and insert two separate compressors instead.
Heat exchangers: If you split a heat exchanger in order to model it, combine the two areas for the real heat exchanger. I believe the “Multiple Pipe” heat exchanger offered by CAPCOST is actually the “Multitube Hairpin” exchanger described on p 11-46 of Perry's Chemical Engineers' Handbook (7th Edition). An on-line search reveals that this consists of multiple double-pipe hairpin (U-shaped) exchangers in a bundle incorporated in a protective shell. It is NOT a shell and tube exchanger, even though tubes are contained in a shell. Unlike a shell and tube exchanger, the flow is truly countercurrent as in a single double-pipe exchanger.
To edit or delete any piece of equipment, save and then click on Edit Equipment. Do not highlight and delete or change as you would in a usual Excel file.

9. If your plant will have a large amount of some material that must be purchased initially in order for the plant to operate, this should be included as a capital expense. Examples would include catalyst, a liquid extraction agent that circulates, or a heat transfer fluid that circulates. Enter this in CAPCOST as User Defined equipment, giving your calculated cost as both Purchased Equipment Cost and Bare Module Cost with the Module Factors = 1. On the Utilities Summary page set its Module and Grass Roots costs to this same value. The amounts of this material lost or replaced every year (“make-up”) must also be included as raw materials on the COM Summary page. Suggest 1/10 of the total initial cost. It is a serious error to calculate the initial cost using any flowrate in the system. You need to estimate how much is required to fill pipes, reactors, heat exchangers, vessels, etc. Show all calculations in the appendix to your report.

10. The sum of the bare module costs, i.e. installed equipment costs, is commonly called the Inside Battery Limit (ISBL) plant cost.

11. Go to the User Options page in CAPCOST. The costs shown are from Turton’s Table 6.3, and are for 2001. These must be updated, using the information found in step 4 above. Note that not all items in Table 6.3 have been included in CAPCOST.

Put in the correct number of operating hours per year. For a plant operating continuously, this is NOT 365x24, because the plant must be shut down occasionally for maintenance.
Assume that the costs of cooling water, refrigerated water, refrigeration and waste disposal are proportional to the cost of electricity and update accordingly.
Assume that the costs of steam and thermal systems are proportional to the cost of the likely fuel, natural gas or fuel oil, and update accordingly.
Enter the operator salary found in step 4 as the cost of labor.

12. Go to the Utilities Summary page in CAPCOST and make certain all utilities have been entered. Steam generated in the process is a savings and so should be entered as a negative value on this page, using either the value of the steam from the Users Option page or the savings shown in Turton Table 6.3 updated by the cost of natural gas. (To make the cost negative, click on the cell, go to the formula bar, and insert a minus sign after =). Note the definitions of total module cost and grass roots cost, which are shown on this page for each piece of equipment. The sums of one of these will be used on the COM Summary page for FCI_L. (Make certain any items from step 9 have been carried over.

13. Go to the COM Summary page in CAPCOST.

Enter the Raw Material, Product and Waste stream information from steps 1 and 3 above. Also include the annual replacement (make-up) of costly materials such as catalyst, extraction solvents, or heat transfer liquids. For process water and waste-water treatment, you can use the values in Turton Table 6.3 updated using the cost of electricity. Better would be to use a method given at the cost information page. Waste gas is not built in to CAPCOST; use a method given at the cost information page. (In the appendix to your report, show all of your calculations.) After entering any item, you can change the contents of any cell. For makeup catalyst, for example, delete the price and consumption and enter just the estimated annual cost.
Enter the Cost of Land and Annual Interest Rate specified by your instructor (or appropriate for the planned location of the plant). Note that the “Annual Interest Rate” is NOT the interest charged by banks, but rather the minimum rate of return required by your company for investments in new facilities (sometimes called the Required Rate of Return).
Enter the Taxation Rate appropriate for the location of the plant. In the US, include both state and federal corporate income taxes.
Click on the salvage value shown. This will bring up a menu. For the FCI_L (total Fixed Capital Investment not including the cost of land, i.e. depreciable investment), select Grass Roots if the plant will be built on a totally new site, or Total Module Cost if it will be added to an existing site already used for related production operations. This will utilize the appropriate value from the Utility Summary. Alternately, you can use some other estimate for FCI_L, such as Equation (5.15) or (5.16) on p 177 of Turton et al. For Salvage Value Source Data, input the value specified. (If zero salvage value, click x to close the Economics Form and delete the content of the salvage value cell to leave it blank.) Select the calculate options for everything else, unless you wish to input values manually. Check the resulting Cost of Operating Labor to make certain it is reasonable (the number of operators per shift X 3.5 X the annual wages + fringe benefits of an operator).
If the Revenue from sale of product(s) comes up negative (with parentheses around it), this is an error and you must either change the product costs to positive or change the Revenue to positive.
Don’t change the Total Module Factor or the Grass Roots Factor unless you have a good reason to do so.
Enter values for Project Life, Construction Period, and Distribution of Fixed Capital Investment as directed by your instructor. Note that the project life is not the actual operating life expected for the plant, but rather a standard value used by your company to evaluate potential investments.
Make certain that CAPCOST has not reset anything to its initial value.

14. Go to the Cash Flow Analysis page.

Click on Generate CFD (Cash Flow Diagram). On the menu, make the selections directed by your instructor. Recommend Discounted and Five-year MACRS depreciation (MACRS recovery period for chemical manufacturing). A discounted cash flow diagram takes into account the required rate of return. The project value (vertical axis) is the sum of all the discounted cash flows from the beginning of construction. The last project value, when production is stopped and the plant scrapped, is the Net Present Value (NPV). If this is positive, presumably the company would want to proceed with a more detailed design. If it is negative, you’d want to see if your design can be changed to make NPV > 0.
The Discounted Cash Flow Rate of Return is the rate of return for which NPV = 0. (If NPV is negative, you may wish, instead, to determine by trial-and-error the minimum required product selling price, i.e. for NPV = 0. Rather than trial-and-error, you can prepare a plot of NPV versus product selling price.)
The Discounted Payback Period is the time at which the FCI_L has been recovered, with all cash flows discounted to the present at the minimum required rate of return (“interest” rate).
In the table, d_k is the depreciation in year k, FCI_L-Sd_k is the book value of the fixed capital investment, and Sd_k is the sum of the depreciation for that year and for previous years. Make sure R, the revenue from sales of product(s), is positive (without parentheses). COM_d is the annual cost of manufacturing from the COM Summary page, the cash flow after subtracting income taxes is (R-COM_d-d_k)*(1-t)+d_k = (R-COM_d) - (R-COM_d-d_k)t (R-COM_d is the income before taxes, which are paid at income tax rate t on this quantity minus the depreciation for that year), the discounted cash flow is the cash flow divided by (1 + i)ⁿ, n is the number of years since the beginning of construction, and the cumulative discounted cash flow is the sum of all the discounted cash flows since the beginning of construction.

15. You can easily determine the influence of all parameters on your process economics by repeating the CFD calculations using other values. For example, by what percent would a 30% increase in raw materials costs have on your NPV?

16. Section 8.7 in Turton describes a systematic method to take all uncertainties into account in your analysis of profitability. CAPCOST’s Monte Carlo Simulation page is set up to help you do this. Select the percent uncertainties you believe there are in each parameter indicated, and then click on Run Economic Analysis. CAPCOST selects values at random from the ranges you selected and recalculates all of the economic results. It does this 1000 times. If you select 900 points, for example, on the NPV plot this tells you that there’s a 90% chance of the true NPV being below this and a 10% chance of NPV being greater.

Changing equipment

In some versions of CAPCOST, when you delete or change specifications for equipment on the Equipment Summary page in CAPCOST, errors may occur on the Utilities Summary page. It may be necessary to start over.

That’s it – you’ve done all you can do using CAPCOST. Make certain you know how it calculates all quantities, particularly NPV and DCFRR, as these make great questions for the final exam.

Clarkson University's Department of Chemical and Biomolecular Engineering

Last revised September 7, 2009. Please submit all questions, comments and suggestions to W.R. Wilcox