ingestion) with a reference pathway and found that the pioneering route optimized
the energy and environmental measures with a relatively high production cost for
economic viability (Delrue et al. 2012, 2013). This could be improved by integration
with a long-term assessment. Furthermore, research using gauges such as return on
investment (ROI) and net present value (NPV), will certainly foresee long-term
profits of microalgae-based biofuel industry, with more systematic consequences.
The precise objectives of this chapter are to investigate the bioeconomy of
large-scale microalgal biofuels production and to identify the key factors responsible for enhanced cost. To this end, the current chapter will provide valuable
information for scaling and commercialization of microalgae-based biofuels.
2 Methods
2.1 Cost and Revenue
According to Xin et al. (2016), the cost of algae-derived biofuels can be divided
into three categories: capital investment, total fixed operating cost (TFOC), and
total variable operating cost (TVOC). Both capital investment and TFOC may be
obtained directly through summation of their corresponding sub-items in dollars per
year. The revenue may be obtained in the similar way. However, as the units of
TVOC are usually MJ/d and kg/d, TVOC items are generally estimated based on
the operation time. Therefore, an estimate of the total theoretical cost could be
obtained from the sum total of capital investment, TFOC and TVOC. In case there
are byproducts in the production process, the actual cost equals to the difference of
theoretical cost and the economic value of the byproducts. Detailed information
with respect to costs and revenue is presented in the supplementary information.
Two economic indicators, namely the NPV and the ROI, are usually adopted for
the economic analysis. NPV is an indicator for analyzing the profitability of an
investment or a project. Alternatively, it measures the profit by computing the
costs and benefits for each period of an investment or a project. NPV may be
estimated as:
NPV ¼
X T
t¼0
C 1 À C 0
ð1 þ rÞ
t
ð1Þ
where T is the time of cash flow, representing the time span during which the
project is under operation and expected to have income; r stands for discount rate,
i.e., the required rate of return that could be earned each period on a project with
similar risk, which is set as 10% in this study; C 1 is the annual income (the benefits)
and C 0 stands for annual expenditure. A positive NPV value indicates that the
income brought by a project or investment has exceeded the anticipated costs,
suggesting that the project or investment is acceptable, and vice versa.
7 The Bioeconomy of Microalgal Biofuels
161
the energy and environmental measures with a relatively high production cost for
economic viability (Delrue et al. 2012, 2013). This could be improved by integration
with a long-term assessment. Furthermore, research using gauges such as return on
investment (ROI) and net present value (NPV), will certainly foresee long-term
profits of microalgae-based biofuel industry, with more systematic consequences.
The precise objectives of this chapter are to investigate the bioeconomy of
large-scale microalgal biofuels production and to identify the key factors responsible for enhanced cost. To this end, the current chapter will provide valuable
information for scaling and commercialization of microalgae-based biofuels.
2 Methods
2.1 Cost and Revenue
According to Xin et al. (2016), the cost of algae-derived biofuels can be divided
into three categories: capital investment, total fixed operating cost (TFOC), and
total variable operating cost (TVOC). Both capital investment and TFOC may be
obtained directly through summation of their corresponding sub-items in dollars per
year. The revenue may be obtained in the similar way. However, as the units of
TVOC are usually MJ/d and kg/d, TVOC items are generally estimated based on
the operation time. Therefore, an estimate of the total theoretical cost could be
obtained from the sum total of capital investment, TFOC and TVOC. In case there
are byproducts in the production process, the actual cost equals to the difference of
theoretical cost and the economic value of the byproducts. Detailed information
with respect to costs and revenue is presented in the supplementary information.
Two economic indicators, namely the NPV and the ROI, are usually adopted for
the economic analysis. NPV is an indicator for analyzing the profitability of an
investment or a project. Alternatively, it measures the profit by computing the
costs and benefits for each period of an investment or a project. NPV may be
estimated as:
NPV ¼
X T
t¼0
C 1 À C 0
ð1 þ rÞ
t
ð1Þ
where T is the time of cash flow, representing the time span during which the
project is under operation and expected to have income; r stands for discount rate,
i.e., the required rate of return that could be earned each period on a project with
similar risk, which is set as 10% in this study; C 1 is the annual income (the benefits)
and C 0 stands for annual expenditure. A positive NPV value indicates that the
income brought by a project or investment has exceeded the anticipated costs,
suggesting that the project or investment is acceptable, and vice versa.
7 The Bioeconomy of Microalgal Biofuels
161