Cost of Steam per ton
COSTS OF STEAM
Issue
The client expects a reduction in steam generation costs and does not care about energy consumption.
Learning
Objectives
Establishing a list of cost items of steam generation
Understanding the different methods of specific steam cost calculation
Knowing how to calculate the specific steam costs
Rating of the relative importance of cost items
Appreciation for specific steam generation costs sensitivity with respect to cost items
Recognition of negative influence of cost reduction of one cost item on the others
Working experience in the use of software to calculate steam costs
1. Establishing a list of cost items
The costs of generation of steam are conveniently split into
Fuel costs
Electricity for pumps, blowers, other equipment
Water
Feed water chemicals
Repair and maintenance (R+M)
_______________________________________
Depreciation of boiler and auxiliary equipment
Staff costs
Note 1: The first set of cost items are variable costs. They occur only if steam is generated.
Note 2: The second set of cost items are fixed costs. They occur no matter how many hours the boiler is operated.
Note 3: In the case of staff costs one could argue, that the staff may be assigned different tasks if the boiler is not operated at all or only intermediately. Consequently staff costs are not always entirely fixed. It depends on the case. However by staff we mean company employees that watch and monitor the boiler operation.
Note 4: In the case of R+M costs one could as well argue that part of the repair and maintenance costs are fixed and part are variable (incremental). A common method is to either express the fixed R+M part as a percentage of the investment or as an annual fixed fee and the incremental part in Baht/ton of steam. R+M costs usually refer to costs for spare parts and possible external costs to install the parts.
2. Understanding different methods of specific steam
Issue
The client expects a reduction in steam generation costs and does not care about energy consumption.
Learning
Objectives
Establishing a list of cost items of steam generation
Understanding the different methods of specific steam cost calculation
Knowing how to calculate the specific steam costs
Rating of the relative importance of cost items
Appreciation for specific steam generation costs sensitivity with respect to cost items
Recognition of negative influence of cost reduction of one cost item on the others
Working experience in the use of software to calculate steam costs
1. Establishing a list of cost items
The costs of generation of steam are conveniently split into
Fuel costs
Electricity for pumps, blowers, other equipment
Water
Feed water chemicals
Repair and maintenance (R+M)
_______________________________________
Depreciation of boiler and auxiliary equipment
Staff costs
Note 1: The first set of cost items are variable costs. They occur only if steam is generated.
Note 2: The second set of cost items are fixed costs. They occur no matter how many hours the boiler is operated.
Note 3: In the case of staff costs one could argue, that the staff may be assigned different tasks if the boiler is not operated at all or only intermediately. Consequently staff costs are not always entirely fixed. It depends on the case. However by staff we mean company employees that watch and monitor the boiler operation.
Note 4: In the case of R+M costs one could as well argue that part of the repair and maintenance costs are fixed and part are variable (incremental). A common method is to either express the fixed R+M part as a percentage of the investment or as an annual fixed fee and the incremental part in Baht/ton of steam. R+M costs usually refer to costs for spare parts and possible external costs to install the parts.
2. Understanding different methods of specific steam