# The other one regards all CCHP biomass ndash fuelled

4. Economic analysis

In this section the economic advantages that the plant can ensure are analysed. In particular, the payback ABT263 (PBP), the net present value (NPV) and the internal rate of return (IRR) are evaluated. To accomplish this task, it is necessary to quantify the periodic cash flow of the investment, in terms of annual costs and incomings.

4.1. Cost estimation

The main costs to be sustained are the overall cost for the realization of the plant and the annual cost required for the procurement of the necessary feedstock.

The cost of the plant, given by the sum of the costs of the components and the installation costs, amounts to 2900000 €.

The yearly cost due to the procurement of the necessary feedstock (Cfeedstock), expressed in €/year, can be calculated as follows:equation(8)Cfeedstock=m·b∗(Ch+Ct+Cc)where ?b is the fuel mass flow rate, Ch is the harvesting cost, Ct is the transportation cost and Cc is the chipping cost.

The cost of harvesting depends on the machines used for polymer purpose. In this analysis, a machine (referred to as the baler) capable of both collecting tree pruning residues and grouping them into cylindrical bales, as with the forage waste, is considered. This machine was constructed for forage and in a second time modified for olive tree pruning residues. A bale has a diameter of 1.50 m and a width of 1.20 m, the medium weight varies between 400 and 450 kg, and the time necessary to produce a bale is about 15 min. According to the specification provided by the manufacturer, the operation costs for the harvesting operation can be estimated to be Ch = 26 €/t.