Engineering and economic optimization of energy production

This paper presents the concept of cost, quality ratio as an optimization criterion for the production of energy, goods and services. The starting point is the observation that in electricity production the taxation is expressed in $/kWh, a ratio in which the nominator comes from the cost of energy, while the denominator represents the quality of electricity, expressed by its voltage and frequency. The same situation prevails in heat production, where the taxation is done in $/kJ. Here we see in the denominator the quality of energy, expressed by its exergy. A graph is presented showing the quality scale of energy, the sum of exergy and anergy. The general case of goods and services production is presented using a graph where the cost and the quality of any product or service are closely connected. This cost-quality graph supports further the concept of cost quality ratio as the main optimizing criterion. All the ideas presented here are based on the general concepts of extended exergy analysis and of thermoeconomics, developed during the last twenty years by several authors. The last section of the paper presents two solutions of the cost, quality ratio (CQR) reduction. These show that the engineers' efforts to improve any technical solutions are in fact contributions to the decrease of CQR. Copyright (C) 2002 John Wiley Sons, Ltd.