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close this bookLow Cost Charcoal Gasifiers for Rural Energy Supply (GTZ, 1994, 49 p.)
close this folder9. Economics of gasifier operation
View the document9.1 How to compare gasifier costs
View the document9.2 Case study: Comparative costs of gasifier installations in Argentina and Malaysia

9.1 How to compare gasifier costs

It was previously said that the construction of gasifiers from ferrocement was promoted in order to enable a significant cost reduction. It is, however, not so easy to decide what "low cost" really means.

The common method to compare the investment costs of different gasifier systems is to divide the turn key equipment costs by the nominal power output in kW, resulting in "specific installation costs" (DM/kW, US $/ kW etc.). If, however, these specific installation costs are taken for comparison on an international scale, the result is often misleading. The conversion of national currencies by the conversion factors of the international financial market does not reflect the different level of production costs in different countries. If a 10 kW gasifier can be manufactured for 6000 US $ in a German workshop, an identical equipment can probably be offered by a workshop in India at a price of 1500 $, due to lower salaries of the workers as well as to lower prices for materials. The information "this gasifier costs 600 $ per installed kW" is therefore more or less meaningless: It is only valid under a given economic situation and is not compatible on an international scale.

Therefore, informations concerning the costs of gasifiers have to be used with great caution. Whereas low-cost conventional gasifiers (metal construction) are in the range of 200-600 US $/kW, R.Reines [9] gives a figure of 46 US $/kW for a ferrocement gasifier (without engine), and the World Bank monitoring report of the AIT gasifier [l0] estimates the costs for production in Indonesia even lower (28 US$/kW). It must be seen, however, that statements concerning costs of materials and labour are very site-specific.

The costs of the ferrocement gasifier, built in Bremen, may illustrate this: The expenses for construction materials, including metal parts, were US $ 1165. The man-power involved for ferrocement work was 420 hours. With an average salary of a construction worker of $ 10 per hour, this corresponds to labour costs $ 4200. The total costs for the ferrocement gasifier in Germany are thus $ 5365 or 563 $/kW-this is 12 times the costs in Thailand!

It is exactly the same system design, which results in totally different costs per kW. In Germany a ferrocement gasifier is not much cheaper than a conventional metal gasifier.

In India, a conventional metal gasifier of 5- 10 kW shaft power costs approximately between $ 1000 and 1500.

A metal gasifier in Thailand costs about 40 % of a correspondent German plant. Referred to the standard salary, however, this plant is much more expensive than the German plant.

Table 2 shows a comparison of system costs for ferrocement gasifiers as well as for compatible metal gasifiers in three countries (Thailand, Argentina, Germany).

Table 2: Comparative costs of gasifiers Ferrocement gasifier vs. metal gasifier I US $ = 2s Baht = 1.70 DM




1) Materials for ferrocement vessels ($)




2) External work (bunker, grate, filter bags) including labour ($)




(1 + 2) Total material and external labour ($)




(3) Labour for ferrocement work ($)




Total material and labour($)




Costs per kW, ferrocement




metal gasifier 10 kW ($)




Costs per kW, metal




The conclusions, drawn from table 2, are:

In countries with cheap labour the ferrocement construction allows to lower gasifier costs considerably. The investment costs finally approach the range which will become attractive to the potential user, even without external subsidies. Assuming that biomass fuel for gasifiers is far cheaper than the traditional liquid fuels, an economical application of gasifiers will then become realistic.

Thus a necessary prerequisite for the further dissemination of gasifiers is met.