Net Present Value Analysis of Modular Chemical Production Plants

Abstract Modular plants consist of modules that autonomously operate parts of the plant. These modules are technically and organizationally limited areas of the plant that fulfill defined tasks. Starting with these modules, companies can create capacity either by equaling up modules from general structures or by numbering up equipment. Here, the economics of a modular chemical plant are compared with those of a traditional large‐scale plant by investigating the net present value. The modular plant presents a more efficient concept for fast growing products or products with volatile demands. This is because the market impact during operation is more important than the preceding influence of the investment. In those cases, the effects of flexibility surpass the effects of scale.