Economic considerations in coverting from oil/gas firing to coal

Economic considerations involved in fuel conversion such as from oil and/or gas firing to coal are discussed including investments costs for new facilities and equipment (including air pollution control equipment), operation and maintenance costs, and purchased fuel costs. An analytical approach to assessing the cost effectiveness of fuel conversion in terms of the annual net cost of conversion, the equivalent annual number of barrels of oil saved, and the integral rate of return of the conversion investment is presented. Illustrative numerical examples are presented for typical utility boilers and industrial boiler facilities. A further consideration addressed deals with the impacts of these costs on the overall financial structure of the firm and the ability of the firm to raise the necessary investment captial.