DESIGN OPTIMIZATION USING EXERGOECONOMICS G. TSATSARONIS Institute for Energy Engineering Technical University of Berlin Marchstr. 18, 10587 Berlin, Germany 1. Introduction Exergoeconomics, this common branch of mechanical and chemical engineering, represents a unique combination of an exergy analysis and a cost analysis, to provide the designer or the operator of an energy-conversion plant with information not available through conventional energy, exergy or cost analyses but crucial to the design and operation of a cost-effective plant. Exergoeconomics may be defined as an exergy-aided cost-reduction method. In addition, exergoeconomics is a very powerful tool for understanding the interconnections between thermodynamics and economics, and, thus, the behavior of an energy conversion plant from the cost viewpoint [1]. Design optimization of a thermal system means the modification of the structure and the design parameters of a system to minimize the total leveIized cost of the system products under boundary conditions associated with available materials, financial resources, protection of the environment, and government regulation, together with the safety, reliability, operability, availability and maintainability of the system. A truly optimized system is one for which the magnitude of every significant thermodynamic inefficiency (exergy destruction and exergy loss) is justified by considerations related to costs or is imposed by at least one of the above boundary conditions. A thermodynamic optimization, which aims at minimizing the thermodynamic inefficiencies, may be considered as a subcase of design optimization. Appropriate formulation of the optimization problem is usually the most important and sometimes the most difficult step of a successful optimization study. In optimization problems we distinguish among independent variables, whose values are amenable to change; these are the decision variables and the parameters whose values are practically fixed by the particular application. In optimization studies, only the decision variables may be varied. The parameters are independent variables that are each given one specific and unchanging value in any particular model statement. The variables whose values are calculated from the independent variables using a mathematical model are the dependent variables. We will initially consider an almost ideal case: A complete thermodynamic model and a complete economic model are available for the optimization of an energy system. In addition, the structure of the system might be considered as optimal, that is, either there are no alternative structures or each alternative structure is considered to be inferior to the present structure. Finally, we assume that an analytical or a numerical optimization technique (e.g., [2-4]) may be used to directly optimize the decision variables. Only in this ideal case, the calculation of exergy-based variables is unnecessary since the optimization can be conducted directly using the available models and techniques. In practical applications, however, thermal systems cannot usually be optimized as in this ideal case. The reasons include the following: Some of the input data and functions required for the thermodynamic and, particularly, the economic model might not be available or might not be in the required form. For 101 A. Bejan and E. Mamut (eds.), Thermodynamic Optimization of Complex Energy Systems, 101-115. © 1999 Kluwer Academic Publishers.