CHEMICAL ENGINEERING TRANSACTIONS

VOL. 52, 2016

A publication of

The Italian Association
of Chemical Engineering
Online at www.aidic.it/cet

Guest Editors: Petar Sabev Varbanov, Peng-Yen Liew, Jun-Yow Yong, Jiří Jaromír Klemeš, Hon Loong Lam
Copyright © 2016, AIDIC Servizi S.r.l.,

ISBN 978-88-95608-42-6; ISSN 2283-9216

Techno-Economic Sensitivity of Bio-Hydrogen Production

from Empty Palm Fruit Bunches under Colombian Conditions

Diana L. Perez Zúñigaa*, Emelin J. Luna Barriosa, Yeimmy Y. Peralta-Ruizb, Angel

D. González-Delgadoc

aIndependent consultant in Chemical Engineering, Blas de Lezo Mz 23 Lt 17 Etapa 4, Cartagena, Colombia.
bUniversidad del Atlantico, Agroindustrial Engineering Department, Km. 7 Vía a Puerto Colombia, Barranquilla, Colombia.
cUniversity of Cartagena, Chemical Engineering Department, Av. del Consulado #Calle 30 No. 48–152, Cartagena,

Colombia.

ingdlpz@gmail.com

Colombia is the fourth largest palm oil producer worldwide, and local research policies are favoring the study

of palm production chain in order to satisfy specific demands detected for the process, which includes the

increase of economic feasibility, this aim can be achieved via generation of valuable co-products as hydrogen

from residues obtained in different stages taking advantage of the biorefinery concept. This work presents an

economic sensitivity evaluation of the hydrogen production from empty fruit bunches (EFB) under Colombian

conditions. Economic feasibility was measured taking into account a processing capacity of Colombian to

process the EFB obtained from north, central and eastern zones with a hydrogen yield of 8747 t/y. Economic

parameters as Net Present Value, Payback Period and economic potentials were calculated. Results shows

that process presents a high sensitivity to the feedstock cost, in addition an increase of operating costs up to

1500 USD/t can affect significantly he payback period of the plant.

1. Introduction

Synthesis of hydrogen was carried out through the coal gasification until the replacement of this technology by

process as steam reforming, partial oxidation and autothermal reforming of natural gas when the decrease of

the oil prices diminished the price of gas (Miltner et al., 2009). In economic terms, reforming is highly efficient,

due to the low cost in which the natural gas is bought, and the high percentage of conversion which is

obtained in reforming furnaces. However, greenhouse gas emissions generated by this industry are alarming,

being one of the most contaminants around the world (Bianchini et al., 2015). Different pathways to produce

hydrogen have been studied (Garcia et al., 2016), among them, lignocellulosic biomass gasification presents

advantages related to diminishing of the greenhouse gas emissions and the use of agroindustrial wastes that

are source of environmental problems derived from its incorrect disposal in rural areas (Yao et al., 2016).

Nevertheless, in the synthesis of hydrogen from biomass gasification process, one of the main obstacles is

related to costs that have to be assumed to carry out the plant design and operation. On the other hand, the

biomass to syngas conversion is strongly associated to the percentage of fixed carbon in its composition,

which in many cases is only a little percentage of the elemental carbon, and whose influence on the efficiency

and operation cost represents a serious disadvantage due to the large quantity of biomass that has to be

bought in order to produce only one kilogram of gas, and utilities required. In this work, an economic and

profitability analysis was carried out in order to determine the cost of using the empty fruit bunches (EFB)

gasification process to produce hydrogen under economic Colombian conditions.

2. Materials and methods

Modeling and simulation of the process was previously developed by authors and is published in this journal

volume. The gasification system was modeled as an empiric model, applying for the mass balance the

DOI: 10.3303/CET1652187

Please cite this article as: Perez Zúñiga D. L., Luna Barrios E. J., Peralta-Ruiz Y. Y., González-Delgado A. D., 2016, Techno-economic
sensitivity of bio-hydrogen production from empty palm fruit bunches under colombian conditions, Chemical Engineering Transactions, 52,
1117-1122 DOI:10.3303/CET1652187

1117

entrained flow gasifier information given by Ogi et al. (2013). In order to diminish the cost related with the

biomass purchasing, the plant was designed as an expansion of a palm-oil extraction plant. Although EFB has

been gasified before, the syngas obtained is a low quality gas, with a low hydrogen percentage in its

composition due the absence of purification and adequation units. This gas is mainly used as fuel to generate

energy in IGCC process (Bell et al., 2013). In Table 1, assumptions and parameters implemented in the

economic analysis are summarized.

i i

DGP m C TAC  (1)

 1PAT DGP itr  (2)

v RM

i i j j

i j

EP m C m C   (3)

v RM

i i j j

i j

EP m C m C U    (4)
v

i i

m C AOC

CCF
TCI






(5)

FCI
PBP

PAT
 (6)

% 100%
PAT

ROI x
TCI

 (7)

 1
n

NPV ACF i


  (8)

max

BEP BEP
On stream

m



 (9)

The economic analysis was carried out using US Dollar as reference, and equations applied were taken from

the model of economic analysis proposed by El-Halwagi (El-Halwagi, 2012). FOB costs of equipment were

calculated using information of vendors (www.alibaba.com), costs indexes and correlations reported in

literature (Turton et al., 2009). Economic indicators were calculated, including the gross profit (depreciation not

included) (GP), Gross Profit (depreciation included) (DGP), profit after taxes (PAT), Economic Potentials (EP1,

EP2, EP3), cumulative cash flow (CCF), payback period (PBP), return of investment (ROI) and net present

value (NPV), also the efficiency On-stream was calculated; Eqs(1) - (9) describes detailed calculation of

economic indicators. Where 𝑚𝑗𝐶𝑗
𝑅𝑀 is the product of the flow of raw material and the selling price, 𝑈 are the

utilities costs and 𝐴𝑂𝐶 are annualized operating costs. 𝑚𝑖𝐶𝑖
𝑣 is the product of product flowrate and selling

price and 𝑇𝐴𝐶 is the sum of operating and fixed total annualized costs of the process, and itr is the tax ratem

𝑇𝐶𝐼 is the total capital investment, 𝐹𝐼𝐶 is the fixed capital investment, ACF is the net profit for the year n. 𝑚𝐵𝐸𝑃

is the production capacity on BEP and 𝑚𝑚𝑎𝑥 is the maximum production capacity.

3. Results

In Table 2, total capital investment for Biohydrogen production process is presented. Equipment represents

the highest costs compared to other factors that affect DFCI. In the process were used a dryer and hammer

mill for pretreatment stage; a gasifier to convert raw material into Biohydrogen; in heat recovery and cleaning

were mainly used heat exchanges and scrubbing for retrieve and use the heat and remove carbon dioxide

mixed with the Biohydrogen obtained in the gasification step, in the shift reactors system were used a high

and low pressure towers and for Acid gas removal (AGR) process for Biohydrogen flow purification, a physic

absorption process was implemented.

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Table 1: Techno-economic assumptions for EFB hydrogen production plant

Processing capacity (t/y) 1,630,000

Main product flow (t/y) 8,747

Raw material cost ($/t) 5

Final product cost ($/t) 3,000

Plant life (years) 20

Salvage value 5.76 % of depreciable FCI

Construction time of the plant (years) 2

Location Colombia

Tax rate 39 %

Discount rate 12 %

Subsidies 0

Type of process New and unproven

Process control Digital

Project type addition to an existing plant

Soil type Soft clay

Percentage of contingency 30 %

Tank design code ASME

Specification diameter vessels Internal diameter

Number of workers per shift 20

Salary per operator ($/h) 1.38

Utilities gas, steam, water, electricity

Process fluids solid-liquid-gas

Depreciation method MACRS-5 Years

Table 2: Total capital investment for Biohydrogen production process from empty fruit bunches.

Costs of capital investment Total (US$)

Delivered purchased equipment cost 10,008,811

Purchased equipment (installation) 2,001,762

Instrumentation (installed) 800,705

Piping (installed) 2,001,762

Electrical (installed) 1,301,145

Buildings (including services) 4,003,524

Services facilities (installed) 3,002,643

Total DFCI 23,120,353

Land 600,529

Yard improvements 4,003,524

Engineering and supervision 3,202,819

Construction expenses 3,402,996

Legal expenses 100,088

Contractors' fee 700,617

Contingency 3,002,643

Total IFCI 15,013,216

Fixed capital investment (FCI) 31,120,576

Working capital (WC) 5,601,704

Start up (SU) 3,112,058

Total Capital Investment (TCI) 39,834,337

In Table 3, direct operating costs, fixed charges and general costs are presented. Raw material used were

empty fruit bunches and Selexol™ solvent. Utilities costs used for the plant was gas, steam, water and

electricity; these costs in Colombia are higher in comparison to other palm producers. Equipment used in

production at the time of acquisition must be endorsed by the concessionaire so they can be used, for being

many the numbers of equipment, patents and royalties costs are considerably higher.

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Table 3: Annual total production cost at 100% capacity.

Operating costs Total (US$/y)

Raw materials 8,150,000

Utilities 595,298

Operating labor 216,000

Direct supervisory and clerical labor 38,880

Maintenance and repairs 720,634

Operating supplies 108,095

Laboratory changes 32,400

Patents and royalties 405,249

Total DPC 10,266,556

Depreciation 1,201,057

Local taxes and insurance 384,338

Plant overhead costs 585,309

Total FCH 2,170,704

Administration costs 146,327

Distribution and selling costs 2,971,826

GE 2,307,655

Total Operating Cost (OC) 13,508,299

Break-even analysis of production rate is shown in Figure 1(a). Production rate at the Break-even point is

approximately 1,800 t/y, compared to maximum production capacity of 8,747 t/y, the process is feasible

operating under the 100 % of installed capacity. Operational problems, preventive and responsive

maintenance activities result in turnaround periods during which the process is shut down partially or

completely, furthermore, market conditions may necessitate temporary reduction in the production rates to

maintain a certain selling price or to stay within the demand level (El-Halwagi, 2012).

Figure 1: Break-even analysis of Biohydrogen production from palm EFB. a) Break even production capacity.

b) Effect of Biohydrogen selling price on Stream efficiency at the Break Even Point.

Table 4: Results of economic indicators for Hydrogen production from empty palm fruit bunches.

Gross Profit (depreciation not included) (GP) 9,950,324

Gross Profit (depreciation included) (DGP) 8,749,267

Profit After taxes (PAT) 5,337,053

Products (Revenues) 26,241,000

Economic Potential 1 ($/y) 18,091,000

Economic Potential 2 ($/y) 17,495,702

Cumulative Cash Flow (CCF) (1/yr) 0.32

Payback Period (PBP) (years) 5.8

Return of Investment (%ROI) 13.4

Net Present Value NPV ($) 19,553,400

In this case, the empty fruit bunches is a residue which depends on the palm plantation, this is influenced

mainly by climatic changes, so their growth is favored in the rainy season, therefore, it is possible that in arid

1120

times the amount of EFB available decrease and increase their acquisition cost; as a result the cost of the final

product may vary and can also be affected production. Economic indicators are presented in Table 4. In

general, the proposed plant has acceptable economic indicators despite being a new process and high tax

rate in Colombia; CCF is less than 1.0 which is attractive in a project. The use of EFB for Biohydrogen

production compared to other biomasses used to produce biofuels generates better economic benefits. In

comparison to biofuels from microalgae via transesterification (6.295 MM$/y) and hydrothermal liquefaction

(16.124 MM$/y) pathways (González-Delgado et al, 2015), biohydrogen production via gasification is more

profitable, generating an annual income of MM$ 19.553/y. Also, the EFB for obtaining bioethanol and jet fuel

was evaluated by Do et al., (2015), with annual sales revenues (ASR) of 10.65 MM$/y and 19.14 MM$/y, this

means that Biohydrogen production from this raw material is more economically efficient under assumptions

made in this study, with a revenues of 26.24 MM$/y. An important factor that favors the profitability of the

project is that it is not necessary to buy new land. A sensitivity analysis of on-stream efficiency versus selling

price of Biohydrogen is shown in Figure 1(b). there are a more pronounced effect to fluctuations in selling

price around of $ 2,000/t of hydrogen, being less pronounced after $ 4,000/t.

Figure 2: Sensitivity analysis of the cost of raw material and variation of ROI. a) Effect of costs of raw material

on process profitability. b) Effect of operating costs on the process ROI.

The effect of raw material costs on process profitability is shown in Figure 2(a). If the cost of EFB increases to

$ 7/t, the plant does not generate profits. Variable operating costs tend to change by raw material cost,

utilities, waste treatment, among others. The variation of ROI respect to changes in NVOC is shown in Figure

2(b). If variable operating costs come up over $ 2,100/t, there will be no return on investment; the plant can

only have a ROI of 60 % in the hypothetic scenario where NVOC are $ 0/t. The increase in operating costs

can make that the PBP increase by years, for that reason, it is important to observe the effect of NVOC on

PBP.

Figure 3: Sensitivity analysis for the payback period and Net present value. a) Effect of process operating

costs on the Payback Period b) Net Present Value of the project.

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According with Figure 3(a), the plant is sensitive to changes in variable operating costs, which are heavily

influenced by the variation in the cost of raw material, it is possible to observe that the payback period tends to

infinite when NVOC are approximately $ 2,000/t. Figure 3(b), shows the behavior of net present value.

Considering the NPV, the investment will produce profits above the required return, indicating that the project

is attractive. Finally, the internal rate of return (IRR) calculated was 21 %.

4. Conclusion

Evaluation of bio-hydrogen production from empty palm fruit bunches under Colombian conditions was

performed using technoeconomic sensitivity in order to achieve a future palm-based biorefinery. For a product

flowrate of 8,747 t/y under assumptions established the plant is attractive, and can be operated under

maximum production capacity, however, the cost of raw material is a critical variable and must be taken into

account, because an increase up to 50 % in empty bunches costs can affect the process profitability, so,

implementation is recommended only if is an extension of an existing plant (e.g. palm oil production plant).

Variable operating costs present a critical value around of 1,500 $/t of raw material, where a short increase

can affect significantly the payback period of the plant in years.

Acknowledgments

Authors thank to University of Cartagena and Universidad del Atlantico for the supply of equipment and

software necessary to conclude successfully this work.

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