An economic evaluation framework for membrane reactor modules in the presence of uncertainty: The case for process safety investment and risk reduction

A comprehensive Net Present Value (NPV) model has been developed to demonstrate the economic advantages of process safety and risk reduction investments on Pd/Au-based membrane reactors. In particular, the economic viability of Pd/Au-based membrane reactor modules incorporated into Integrated Gasification Combined Cycle (IGCC) plants is evaluated within the aforementioned framework by pro-actively following sound process safety design principles. Sources of irreducible uncertainty (market, technological, operational) as well as safety risk are explicitly recognized, such as the Pd/Au prices, membrane life-time and loss in the power plant capacity factor due to possible accidents. The effect of the above uncertainty drivers on the membrane module cost along with production disruption and associated revenue losses is elucidated using Monte-Carlo simulation techniques that enable the propagation of the above uncertain inputs through the NPV-model, and therefore, generate a more realistic distribution of the process system's value rather than a single-point/estimate that overlooks these uncertainties. Pre-investment on risk reducing measures, such as spare safety relief systems (cautionary redundancy) for membrane reactor modules operating at high pressures (e.g. 50 atm), is shown to be economically more attractive than cases where analogous safety measures are not implemented. Since accidents and possibly catastrophic events do happen in an uncertain world, additional investment on safety measures could ensure a safer and more profitable operation of the process system under consideration giving credence to the thesis that process safety investments may result in enhanced techno-economic performance in the presence of irreducible uncertainties. (c) 2012 Elsevier Ltd. All rights reserved.