Techno-Economic Analysis (TEA)¶
In this tutorial you will perform a TEA on a simulated process using DWSIM's Classic UI. TEA combines simulation results (capacity, energy use, equipment list) with economic data (capital costs, utility prices, product prices) to evaluate project feasibility.
What you will learn
- How to enable TEA on an existing flowsheet
- How to enter equipment costs, utility prices, and product prices
- How to compute CAPEX, OPEX, NPV, IRR, and payback period
Prerequisites
- Completed at least one tutorial from the Advanced Track
- DWSIM Plus / Patreon Edition (TEA module is part of Plus)
Plus feature
The TEA module requires DWSIM Plus / Patreon Edition. Without activation, the TEA menu items are hidden or disabled.
Overview¶
Typical TEA workflow:
- Build the process flowsheet (use any tutorial as a starting point)
- Estimate equipment costs (DWSIM uses correlations or vendor quotes)
- Add CAPEX overhead (installation, contingency, working capital)
- Estimate utility costs (from energy/material flows)
- Estimate revenue (product flows × prices)
- Compute economic metrics: NPV, IRR, payback
We use the Methanol Synthesis flowsheet as the basis.
Step-by-Step in the Classic UI¶
1. Open or build the process¶
Open the methanol synthesis simulation you saved earlier (or build it fresh following the Methanol Synthesis tutorial). The flowsheet must be solved (all green).
2. Open the TEA setup¶
In the FlowsheetForm menu: Tools > Techno-Economic Analysis (or it may appear under Utilities > TEA depending on your DWSIM Plus version).
The TEA Configuration Window opens. It has multiple tabs:
- General: project lifetime, discount rate, tax rate, operating hours/year, currency
- Equipment: cost estimates per unit operation
- Utilities: prices for electricity, cooling water, steam, fuel
- Materials: prices for raw materials and products
- Results: computed metrics
3. Set general parameters¶
On the General tab:
- Currency:
USD - Project lifetime:
15 years - Discount rate:
10 % - Tax rate:
25 % - Operating hours per year:
8000
4. Set utility prices¶
On the Utilities tab, enter typical prices (override DWSIM defaults if needed):
- Electricity:
0.08 USD/kWh - Cooling Water:
0.05 USD/m³ - Steam (HP):
25 USD/tonne - Natural Gas:
4.5 USD/MMBtu
DWSIM links each unit operation's energy stream to a utility automatically (e.g., compressors → electricity; coolers → cooling water).
5. Set material prices¶
On the Materials tab:
- For the Syngas feed: role =
Feed, price =100 USD/tonne - For the Crude-Methanol product: role =
Product, price =350 USD/tonne
6. Review equipment costs¶
The Equipment tab lists all unit operations with estimated CAPEX values. DWSIM calculates these from sizing correlations (Guthrie, Towler, etc.). You can override individual values if you have vendor quotes.
7. Compute and view results¶
Click Compute (or Calculate) at the bottom of the TEA window. The Results tab updates with:
- Total CAPEX (M USD)
- Annual OPEX (M USD/year)
- Annual Revenue (M USD/year)
- NPV (Net Present Value)
- IRR (Internal Rate of Return)
- Payback period (years)
A bar chart shows the breakdown of CAPEX and OPEX by category, and a cash flow chart shows year-by-year cumulative cash flow.
8. Export the report¶
Click Generate Report to export a PDF or Markdown summary that you can include in design documents.
Understanding the Metrics¶
| Metric | Meaning | Decision Rule |
|---|---|---|
| CAPEX | Total upfront investment | Compare against budget |
| OPEX | Annual operating cost | Should be much less than annual revenue |
| NPV | Discounted sum of cash flows | Project viable if NPV > 0 |
| IRR | Discount rate for which NPV = 0 | Project viable if IRR > hurdle rate (10-15%) |
| Payback | Years to recover CAPEX | Shorter is better; typically < project lifetime |
Automating This Tutorial¶
Files in this repository
- Python script:
examples/features/tea_methanol.py
See examples/features/tea_methanol.py in the DWSIM.Tutorials repository.
dwsim.tea.configure, dwsim.tea.set_utility_prices, dwsim.tea.set_material_prices, dwsim.tea.compute.
Output may vary
Results depend on the LLM's reasoning quality and tool-use accuracy. Always verify the simulation matches your intent before relying on the numbers.
Use DWSIM (via the MCP server) to do the following on the solved
methanol synthesis flowsheet:
- Configure a TEA study with:
- currency = USD
- project lifetime = 15 years
- discount rate = 10%
- tax rate = 25%
- operating hours per year = 8000
- Set utility prices:
- Electricity = 0.08 USD/kWh
- Cooling Water = 0.05 USD/m³
- Steam (HP) = 25 USD/tonne
- Natural Gas = 4.5 USD/MMBtu
- Set material prices:
- Syngas (Feed) = 100 USD/tonne
- Crude-Methanol (Product) = 350 USD/tonne
- Use DWSIM's built-in correlations for equipment CAPEX
- Compute the TEA
- Report total CAPEX, annual OPEX, annual revenue, NPV, IRR and
payback period, plus the equipment-level CAPEX breakdown
Exercises
- Reduce methanol price to
250 USD/tonne. Does the project still have NPV > 0? - Increase project lifetime to 20 years. How does NPV change?
- Use Tools > Sensitivity Analysis to vary feed price ±20% and chart the IRR response.
Further Reading¶
Selected references from the DWSIM technical bibliography. Click the DOI link to access each paper.
- Richard Turton, Joseph A. Shaeiwitz, Debangsu Bhattacharyya & Wallace B. Whiting. (2018). Analysis, Synthesis, and Design of Chemical Processes. Prentice Hall
- Gavin Towler & Ray Sinnott. (2022). Chemical Engineering Design: Principles, Practice and Economics of Plant and Process Design. Butterworth-Heinemann
- Max S. Peters, Klaus D. Timmerhaus & Ronald E. West. (2003). Plant Design and Economics for Chemical Engineers. McGraw-Hill
- Hans J. Lang. (1948). Simplified Approach to Preliminary Cost Estimates. Chemical Engineering
- Warren D. Seider et al.. (2017). Product and Process Design Principles: Synthesis, Analysis and Evaluation. John Wiley & Sons
- Chemical Engineering. (2024). Chemical Engineering Plant Cost Index. Chemical Engineering
Next Steps¶
In Life Cycle Assessment, you will quantify the environmental impact of the same process.