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Cost analyses and predictions for a fuel ethanol plant in a rural and landlocked African country: Lang factor approach

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  • Amigun, B.
  • von Blottnitz, H.

Abstract

Research on improving ethanol production as an alternative to petroleum based fuel has been accelerating for both ecological and economical reasons. A simplified procedure for rapid ball-park cost estimate that can be used as a research tool by energy policy makers for targeting area of cost reduction in a project, for comparing alternative design and for reviewing achieved costs on completed projects is described. In this study, an operating, commercial scale fuel-ethanol plant annexed to a sugar industry and based on molasses in a poorly accessible rural and landlocked African country was used to determine the cost structure. Analysis of the breakdown of the fixed capital investment (FCI) cost, based on the principle of factorial method of capital cost estimation and using Lang factor (fL) analysis was used to create an econometric model for calculating FCI cost. The model suggests a Lang factor of 2.40 and 2.81 for outside and inside battery limits plant, respectively.

Suggested Citation

  • Amigun, B. & von Blottnitz, H., 2009. "Cost analyses and predictions for a fuel ethanol plant in a rural and landlocked African country: Lang factor approach," International Journal of Production Economics, Elsevier, vol. 119(1), pages 207-216, May.
    • Handle: RePEc:eee:proeco:v:119:y:2009:i:1:p:207-216
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    1. Montaner, Maria Ines & Gadaleta, Liliana & Parin, Maria Amelia & Zugarramurdi, Aurora, 1995. "Estimation of investment costs in fish processing plants," International Journal of Production Economics, Elsevier, vol. 40(2-3), pages 153-161, August.
    2. Tiffany, Douglas G. & Eidman, Vernon R., 2003. "Factors Associated With Success Of Fuel Ethanol Producers," Staff Papers 14155, University of Minnesota, Department of Applied Economics.
    3. Amigun, B. & Sigamoney, R. & von Blottnitz, H., 2008. "Commercialisation of biofuel industry in Africa: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 12(3), pages 690-711, April.
    4. Zhang, Cheng & Han, Weijian & Jing, Xuedong & Pu, Gengqiang & Wang, Chengtao, 2003. "Life cycle economic analysis of fuel ethanol derived from cassava in southwest China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 7(4), pages 353-366, August.
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