Environmental Engineering Reference
In-Depth Information
1.
Pipes: the first cost (FC) is proportional to the diameter. Linear or exponential approach
can be applied where
FC
=
aD
, or
FC
=
b
+
cD
n
, with
D
representing the pipe diameter,
say, in millimetres.
2.
Storage: the first cost of network storage will be proportional to its volume. Hence,
FC
=
aV
n
, where
V
is the storage volume, say, in m
3
.
3.
Pumping stations: Similar as for the storage,
FC
=
aQ
n
, where
Q
is the maximum
installed pumping capacity, say, in m
3
/h.
Factors
a
,
b
,
c
, and
n
in the above equations will depend on the type of materials and local
manufacturing conditions, and units of measure used for
D
,
V
and
Q
.
Annual operation and maintenance costs are normally planned as a certain percentage of the
investment costs. From the practice of developed countries, these costs can be roughly
budgeted in the order 0.5% for pipes, 0.8% for storage and 2.0% for pumping stations, per
annum. This does not include the energy used for pumping, which is calculated based on the
actual water quantity pumped in the system.
Various design alternatives may consider phased investment. A preliminary cost comparison
can be carried out using the
Present Worth
method (also known as the
Annual Worth
method). Applying this method, all actual and future investments are calculated back to a
reference year, which in general is the year of the first investment. The basic parameter used
in the calculation is the
single present worth factor
, p
n/r
:
1
1
p
=
=
8.1
n
/
r
n
s
(
+
r
)
n
,
r
where s
n/r
is the
single compound amount factor
, which represents the growth of the present
worth (PW) after
n
years with a
compounded interest rate
of
r
. If the first cost,
FC
, has been
made in the future, after
n
years, the present worth,
PW
, of the future sum becomes
PW
=
p
n/r
FC
.
A loan taken for the investment has to be repaid after
n
years. The annual sum,
A
, which is to
be allocated for that purpose will be calculated as:
n
r
(
+
r
)
A
=
PW
=
a
PW
8.2
n
/
r
(
+
r
)
n
−
1
where,
a
n/r
represents the
capital recovery factor (annuity).
The
ideal interest rate
,
i
, can replace the true interest rate,
r
, in Equations 8.1 and 8.2, if the
annual inflation rate,
f
, is to be taken into consideration. This is done in the following way:
r
−
f
8.3
i
=
1
+
f
The above equations are commonly applied while comparing various design alternatives. The
field of Engineering Economy offers more detailed cost evaluations that can be further
studied in appropriate literature, e.g. in De Garmo et al. (1993).
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