Guide · Layer 3

Operating Costs

Written for: seed / Series A scientist-founder

Start here — opex, the yearly cost to run the plant, builds straight on the mass flows from Layer 2. Think in cost per year: for each input, how much you consume × what a unit costs.

Variable costs

These scale with output, and for most commodity processes they’re dominated by feedstock and energy. Two steps get you each line:

1. Find good references for the unit prices — what a tonne of feedstock, a MWh of power, or a unit of reagent actually costs
2. Multiply through — units used per year (straight from Layer 2) × cost per unit (from your reference) = the annual cost for that item. Sum the items and you have the variable, cost-of-goods (COGS) side

Fixed operating costs

These run whether or not you make a unit, and they’re worth breaking out on their own: maintenance (a few % of ISBL per year), insurance, labor, and overheads. You factor them rather than build them from consumption.

The fixed half — including the annualized capital from the next sub-layer — spreads over what you actually produce, so it scales as 1 ÷ capacity factor. For a capital-heavy or intermittent route, the capacity factor can move cost per tonne more than any equipment detail.

🧭 Coach’s Read

Feedstock and energy is usually the whole game — get the dominant input and its price range right before anything else. You can usually bound the consumption tightly, but the price swings more and faster, so it’s your largest operating uncertainty and the natural thing to sensitize. And watch the word free: a “free” waste feedstock — produced water, tailings, waste CO₂ — rarely stays free once you make it valuable. Model it as a revenue split with the waste owner, not a zero.