Contemporary Engineering Economics 6th Edition by Chan Park

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Absorption chillers provide cooling to buildings by using heat. This seemingly paradoxical (but highly efficient) technology is most cost-effective in large facilities with significant heat loads. Not only do absorption chillers use less energy than conventional equipment does, but they also cool buildings without the use of ozone-depleting chlorofluorocar-bons (CFCs). Unlike conventional electric chillers, which use mechanical energy in a vapor compression process to provide refrigeration, absorption chillers primarily use heat energy with limited mechanical energy for pumping. Absorption chillers can be powered by natural gas, steam, or waste heat.
• The most promising markets for absorption chillers are in commercial buildings, government facilities, college campuses, hospital complexes, industrial parks, and municipalities.
• Absorption chillers generally become economically attractive when there is a source of inexpensive thermal energy at temperatures between 212°F and 392°F.
• An absorption chiller transfers thermal energy from the heat source to the heat sink through an absorbent fluid and a refrigerant. The absorption chiller accomplishes its refrigerative effect by absorbing and then releasing water vapor into and out of a hthium-bromide solution. Absorption chiller systems are classified by single-, double-, or triple-stage effects, which indicate the number of generators in the given system.
• The greater the number of stages, the higher is the overall efficiency of the system. Double-effect absorption chillers typically have a higher first cost (but a significantly lower energy cost) than single-effect chillers, resulting in a lower net present worth.
Some of the known economic benefits of the absorption chiller over the conventional mechanical chiller are as follows.
• In a plant where low-pressure steam is currently being vented to the atmosphere, a mechanical chiller with a coefficient of performance (COP) of 4.0 is used 4,000 hours per year to produce an average of 300 tons of refrigeration.
• The plant's cost of electricity is $0.05 per kilowatt-hour. An absorption unit requiring 5,400 lb/hr of 15-psig steam could replace the mechanical chiller, providing the following annual electrical cost savings:
Annual Savings = 300 tons × (12,000 Btu/ton/4.0) × 4.000 hrs/yr × $0.05/kWh × 1 Wh/3,413 Btu = $52,740
Suppose you plan to install the chiller and expect to operate it continuously for 10 years. What would be the maximum amount that can be invested in installing the chiller with the capacity as described above If the energy cost were expected to increase at an annual rate of 10%, how would your answer change Assume i = 10%.