Existing methods of exergoeconomic analysis and optimization of energy systems operate with single average or marginal cost values per exergy unit for each material stream in the system being considered. These costs do not contain detailed information on (a) how much exergy, and (b) at what cost each exergy unit was supplied to the stream in the upstream processes. The cost of supplying exergy, however, might vary significantly from one process step to the other. Knowledge of the exergy addition and the corresponding cost at each previous step can be used to improve the costing process. This paper presents a new approach to exergy costing in exergoeconomics. The monetary flow rate associated with the thermal, mechanical and chemical exergy of a material stream at a given state is calculated by considering the complete previous history of supplying and removing units of the corresponding exergy form to and from the stream being considered. When exergy is supplied to a stream, the cost of adding each exergy unit to the stream is calculated using the cost of product exergy unit for the process or device in which the exergy addition occurs. When the stream being considered supplies exergy to another exergy carrier, the last-in-first-out (LIFO) principle of accounting is used for the spent exergy units to calculate the cost of exergy supply to the carrier. The new approach eliminates the need for auxiliary assumptions in the exergoeconomic analysis of energy systems and improves the fairness of the costing process by taking a closer look at both the cost-formation and the monetary-value-use processes. This closer look mainly includes the simultaneous consideration of the exergy and the corresponding monetary values added to or removed from a material stream in each process step. In general, the analysis becomes more complex when the new approach is used instead of the previous exergoeconomic methods. The benefits of using the new approach, however, significantly outweigh the increased efforts. The new approach, combined with some other recent developments, makes exergoeconomics an objective methodology for analyzing and optimizing energy systems.

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