A Veterans Administration (VA) hospital isto decide which type of boiler fuel system will mostefficiently provide the required steam energy outputfor heating, laundry, and sterilization purposes. Thecurrent boilers were installed in the early 1950s andare now obsolete. Much of the auxiliary equipmentis also old and in need of repair. Because of thesegeneral conditions, an engineering recommendationwas made to replace the entire plant with a new boilerplant building that would house modern equipment.The cost of demolishing the old boiler plant wouldbe almost a complete loss, as the salvage value of thescrap steel and used brick was estimated to be onlyabout $1,000. The VA hospital’s engineer finallyselected two alternative proposals as being worthyof more intensive analysis. The hospital’s annualenergy requirement, measured in terms of steam output, is approximately 145,000,000 pounds of steam.As a rule of thumb for analysis, 1 pound of steam isapproximately 1,000 Btu, and 1 cubic foot of naturalgas is also approximately 1,000 Btu. The two alternatives are as follows.• Proposal 1. Replace the old plant with a newcoal-fired boiler plant that costs $1,770,300. Tomeet the requirements for particulate emissionas set by the Environmental Protection Agency,this coal-fired boiler, even if it burned low-sulfurcoal, would need an electrostatic precipitator,which would cost approximately $100,000. Theplant would last for 20 years. One pound of drycoal yields about 14,300 Btu. To convert the145,000,000 pounds of steam energy to the common denominator of Btu, it is necessary to multiply by 1,000. To find the Btu input requirements,it is necessary to divide by the relative boiler efficiency for the type of fuel. The boiler efficiencyfor coal is 0.75. The price of coal is estimated tobe $65.50 per ton.• Proposal 2. Build a gas-fired boiler plant withNo. 2 fuel oil and use the new plant as a standby.This system would cost $889,200 and have anexpected service life of 20 years. Since smallhousehold or commercial gas users that are entirelydependent on gas have priority, large plants musthave an oil switch-over capability. It has been estimated that 6% of 145,000,000 pounds of steamenergy (or 8,700,000 pounds) would come aboutas a result of the switch to oil. The boiler efficiencywith each fuel would be 0.78 for gas and 0.81 foroil, respectively. The heat value of natural gasis approximately 1,000,000 Btu/MCF (thousandcubic feet), and for No. 2 fuel oil, it is 139,400 Btu/gal. The estimated gas price is $6.50/MCF, and theprice of No. 2 fuel oil is $2.85 per gallon.(a) Calculate the annual fuel costs for each proposal.(b) Determine the unit cost per steam pound for eachproposal. Assume that i = 10%.(c) Which proposal is the more economical?
A Veterans Administration (VA) hospital is
to decide which type of boiler fuel system will most
efficiently provide the required steam energy output
for heating, laundry, and sterilization purposes. The
current boilers were installed in the early 1950s and
are now obsolete. Much of the auxiliary equipment
is also old and in need of repair. Because of these
general conditions, an engineering recommendation
was made to replace the entire plant with a new boiler
plant building that would house modern equipment.
The cost of demolishing the old boiler plant would
be almost a complete loss, as the salvage value of the
scrap steel and used brick was estimated to be only
about $1,000. The VA hospital’s engineer finally
selected two alternative proposals as being worthy
of more intensive analysis. The hospital’s annual
energy requirement, measured in terms of steam output, is approximately 145,000,000 pounds of steam.
As a rule of thumb for analysis, 1 pound of steam is
approximately 1,000 Btu, and 1 cubic foot of natural
gas is also approximately 1,000 Btu. The two alternatives are as follows.
• Proposal 1. Replace the old plant with a new
coal-fired boiler plant that costs $1,770,300. To
meet the requirements for particulate emission
as set by the Environmental Protection Agency,
this coal-fired boiler, even if it burned low-sulfur
coal, would need an electrostatic precipitator,
which would cost approximately $100,000. The
plant would last for 20 years. One pound of dry
coal yields about 14,300 Btu. To convert the
145,000,000 pounds of steam energy to the common denominator of Btu, it is necessary to multiply by 1,000. To find the Btu input requirements,
it is necessary to divide by the relative boiler efficiency for the type of fuel. The boiler efficiency
for coal is 0.75. The price of coal is estimated to
be $65.50 per ton.
• Proposal 2. Build a gas-fired boiler plant with
No. 2 fuel oil and use the new plant as a standby.
This system would cost $889,200 and have an
expected service life of 20 years. Since small
household or commercial gas users that are entirely
dependent on gas have priority, large plants must
have an oil switch-over capability. It has been estimated that 6% of 145,000,000 pounds of steam
energy (or 8,700,000 pounds) would come about
as a result of the switch to oil. The boiler efficiency
with each fuel would be 0.78 for gas and 0.81 for
oil, respectively. The heat value of natural gas
is approximately 1,000,000 Btu/MCF (thousand
cubic feet), and for No. 2 fuel oil, it is 139,400 Btu/
gal. The estimated gas price is $6.50/MCF, and the
price of No. 2 fuel oil is $2.85 per gallon.
(a) Calculate the annual fuel costs for each proposal.
(b) Determine the unit cost per steam pound for each
proposal. Assume that i = 10%.
(c) Which proposal is the more economical?
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