Clean Technology (청정기술)

The Korean Society of Clean Technology (한국청정기술학회)
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Evaluation on Large-scale Biowaste Process: Spent Coffee Ground Along with Real Option Approach

  • Junho Cha (Department of Chemical Engineering, Gyeongsang National University) ;
  • Sujin Eom (Department of Chemical Engineering, Gyeongsang National University) ;
  • Subin Lee (Department of Chemical Engineering, Gyeongsang National University) ;
  • Changwon Lee (Department of Chemical Engineering, Gyeongsang National University) ;
  • Soonho Hwangbo (Department of Chemical Engineering, Gyeongsang National University)
  • Received : 2022.12.11
  • Accepted : 2023.01.17
  • Published : 2023.03.31
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Abstract

This study aims to introduce a biowaste processing system that uses spent coffee grounds and implement a real options method to evaluate the proposed process. Energy systems based on eco-friendly fuels lack sufficient data, and thus along with conventional approaches, they lack the techno-economic assessment required for great input qualities. On the other hand, real options analysis can estimate the different costs of options, such as continuing or abandoning a project, by considering uncertainties, which can lead to better decision-making. This study investigated the feasibility of a biowaste processing method using spent coffee grounds to produce biofuel and considered three different valuation models, which were the net present value using discounted cash flow, the Black-Scholes and binomial models. The suggested biowaste processing system consumes 200 kg/h of spent coffee grounds. The system utilizes a tilted-slide pyrolysis reactor integrated with a heat exchanger to warm the air, a combustor to generate a primary heat source, and a series of condensers to harness the biofuel. The result of the net present value is South Korean Won (KRW) -225 million, the result of the binomial model is KRW 172 million, and the result of the Black-Scholes model is KRW 1,301 million. These results reveal that a spent coffee ground-related biowaste processing system is worthy of investment from a real options valuation perspective.

Keywords

Acknowledgement

This work was supported by the project (NRF-2020M1A2A2080858) through the National Research Foundation of Korea (NRF) and also supported by the NRF grant funded by the Korea government (MSIT) (No. 2021R1F1A1059919).

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