SEMINAR
SUBJECT: PROCESS ECONOMICS
TOPIC: ECONOMIC BALANCE FOR
INSULATION
Done By
Lokanesh A [20BTCE008]

ESSENTIALS OF ECONOMIC BALANCE
◦ A study of the costs in design of equipment and processing operations will show in most cases
that there are certain costs that increase whereas others decrease when the costs are related to
some common variable.
◦ Thus, we can define the term ECONOMIC BALANCE as the design ofequipment or the selection
of operation conditions whereby the increasingcosts are balanced by the decreasing costs to
give the greatest economicreturn.
◦ In general, economic balance requires an understanding of how the fixed costs vary with the
common variable which is selected as a basis for the analysis. The variable costs must then also
be related to this common variable.
◦ The general problem of economic balance in process engineering is shown in figure above,
where some independent variable can be related to the fixed costs and the direct costs.

ECONOMIC BALANCE FOR INSULATION
◦ The economic balance for insulations is based on the common variable, the insulation thickness.
◦ As the thickness of insulation increases, the fixed cost associated with thematerial cost of
insulation increases linearly.
◦ For example,
The annual fixed costs for insulating a certain steampipe installation can
be expressed as:
C_{F} = 30S + 40 Rs. per year eqn.1
Where
S = thickness of insulation, in inches
C_{F} = Annual fixed cost, in Rs.

◦ On the other hand, as the thickness of insulation increases, the direct cost decreases linearly.
◦ This is because the direct cost in insulation is the energy cost. Since the insulation of the steam
pipe results in energy savings, the direct cost associated with energy decreases with increase in
the thickness of the insulation.
◦ For example,
The annual direct cost of energy lost by providing insulation over the steam pipe can be
expressed as:
C_{D} = 100 / S Rs per year. eqn 2
Where
S = thickness of insulation, in inches
C_{D} = Annual direct cost, in Rs.
ECONOMIC BALANCE FOR INSULATION

◦ The optimum insulation thickness for economic balance over insulation can be determined by
two methods, as follows:
1. Determination of the optimum insulation thickness by GRAPHICAL METHOD.
2. Determination of the optimum insulation thickness by ANALYTICAL (ALGEBRAIC) METHOD.
ECONOMIC BALANCE FOR INSULATION

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