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Environmental equipment cost analysis: optimum size of a biocoal briquette machine

Author

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  • Satoshi Nakano
  • Takanobu Nakajima
  • Kanji Yoshioka

Abstract

For developing countries that consume coal as their primary energy source, the method of desulfurization is a major issue. We installed experimental biocoal briquette production machines as a simple, inexpensive technology for desulfurization in China. Biocoal briquettes are a high-pressured mixture of powdered coal and biomass, with powdered lime added as a desulfurizer. In order to spread the use of these machines, it is important to consider the market size and with that knowledge determine the size of biocoal briquette machines. The objective of this study was to quantitatively evaluate the optimum size of biocoal briquette machines. There are two principal effects of economies of scale that need to be considered when evaluating briquette machine size with respect to market size. One effect is that the average marginal briquette cost decreases as the machine size increases. The other consideration is the mass production effect of manufacturing a large number of machines. As a result, below a given market size we should manufacture more machines that have a capacity less than 15t/h, which is the optimum machine size for briquette cost. Copyright Springer Japan 2005

Suggested Citation

  • Satoshi Nakano & Takanobu Nakajima & Kanji Yoshioka, 2005. "Environmental equipment cost analysis: optimum size of a biocoal briquette machine," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 6(4), pages 249-266, December.
    • Handle: RePEc:spr:envpol:v:6:y:2005:i:4:p:249-266
    DOI: 10.1007/BF03353939
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