Costing of products based on exergy rather than energy is adjudged rational because it is a commodity of value and provides for accurate prices of products. In this paper, using an absorption chiller system as an example, a set of algorithms is presented that determines specific unit costs of internal flows and products at each component. The absorption chiller has different components that are broadly classified as productive and dissipative types. The methodology of second law of thermodynamics is used to define the productive components as well as for measuring their performance and the formulation of objective function for the determination of unit cost of the desired products. A utility-based exergetic evaluation technique is preferred because it offers the possibility of identifying and quantifying irreversibility as well as assigning available useful exergy among the productive components. Results from the study indicate that total purchase costs of productive components are as follows: €209.1/kW; €4.617/kW; €0.1619/kW; and €3.542/kW for generator, solution heat exchanger, pump and evaporator assembly, respectively. With these parameters, the various unit costs were calculated. It is hoped that information obtained here would be helpful in managing Independent Power Production plants through effective product pricing.
