Economics

Estimated project costs

The economy of any technology, and in particular of those in the renewable energy business is of primary importance. In our case however, we want to look first at the actual costs of the project. I have done a fairly detailed costing, including all components, assembly, engineering design, overheads, running costs and costs for a laboratory. Here is the overview cost breakdown in Euros (project duration is 18 months):

  1. Engine:

1.1 Main engine:                                                              9,030

1.2 Power take-off, control and measurement:    2,355

1.3 Other components:                                                 3,180

  1. Assembly:                                                               1,500
  2. Overheads:                                                                 375
  3. Engineering Design and drawings:               11,000
  4. Rent for workshop (18 months)                     19,800
  5. Running costs for tests:                                     9,000

TOTAL:                                                                               56,240 €

The interesting thing is of course, that the actual engine construction costs 16,440, i.e. only 29% of the total project costs.

For a real application, these costs would increase by around 2,000 since a grid connection board would need to be added.

Production costs

We have also done a study on the engine costs and Return-On-Investment (ROI) in order to assess the market potential of the technology. Here, we made the following assumptions:

  1. Cylinder and piston are made of plastic (this promises a cost reduction factor of 5 to 7 compared with metal).
  2. The engine has two cylinders
  3. 6000 hr run time per year
  4. Electricity can be saved with a value of 15 c/kWhr (it is assumed, that the engine runs in a company and reduces the total electricity consumption).
  5. Maintenance is 5% of initial investment per year

roi-power

Fig. 1: power rating and ROI

Fig. 1 shows the ROI as function of the power rating. Two things can be observed immediately:

(a) The unit costs reduce with increasing power rating, as could be expected.

(b) from 5 kW onwards, the ROI is less than five years which makes this technology a rather interesting proposition.

Detailed costing of engine:

The following table shows the cost details for the engine:

cost-details