Tetra Tech, Inc.

10306 Eaton Place, Suite 340

Fairfax, VA 22030

phone 703-385-6000

fax 703-385-6007

TO: Paul Shriner and Jan Matuszko, EPA

FROM: John Sunda (SAIC) and Kelly Meadows

DATE: March 10, 2010

SUBJECT: Preliminary E

Plants to Generate Electricity to Replace Closed Cycle Cooling Energy

Penalty

This memo presents preliminary cost estimates for combustion turbines installed at power 

plants. The turbines used in the a

penalty associated with converting a once

Table 1 below presents the estimated total energy penalty for different types of power 

plants. The parasitic energy penalty is based on a condenser 

parasitic energy factor of 0.0000237

Table 1. Energy Penalty Estimates

Table 2 presents performance and costs assumptions for a 160 MW conventional 

combustion turbine that are used by EIA in their modeling for the 2009 Annual Energy 

Outlook.

Plant Type

Nuclear

Non-nuclear (Old & New)

Non-Nuclear 39%

Non-Nuclear 45%

Combined Cycle

MEMORANDUM

10306 Eaton Place, Suite 340

Paul Shriner and Jan Matuszko, EPA

John Sunda (SAIC) and Kelly Meadows

March 10, 2010

Preliminary Estimate of Costs for Combustion Turbines Installed at Power 

Plants to Generate Electricity to Replace Closed Cycle Cooling Energy

preliminary cost estimates for combustion turbines installed at power 

used in the analysis are sized to replace the power plant energy

penalty associated with converting a once-through cooling system to a closed

Table 1 below presents the estimated total energy penalty for different types of power 

penalty is based on a condenser ∆T of 15 oF and uses the 

of 0.0000237 MW/gpm used in EPA cost estimates.

Energy Penalty Estimates

Table 2 presents performance and costs assumptions for a 160 MW conventional 

turbine that are used by EIA in their modeling for the 2009 Annual Energy 

Assumed 

Plant 

Efficiency

Turbine 

Efficiency 

Penalty 

gpm/MW at 

Delta 15

Parasitic 

Penalty

33% 2.5% 910 2.2%

34% 1.5% 680 1.6%

39% 1.0% 590 1.4%

45% 0.80% 430 1.0%

57% 0.67% 270 0.6%

of Costs for Combustion Turbines Installed at Power 

Plants to Generate Electricity to Replace Closed Cycle Cooling Energy

preliminary cost estimates for combustion turbines installed at power 

power plant energy

closed-cycle one.

Table 1 below presents the estimated total energy penalty for different types of power 

F and uses the 

Table 2 presents performance and costs assumptions for a 160 MW conventional 

turbine that are used by EIA in their modeling for the 2009 Annual Energy 

Parasitic Total 

Penalty

4.7%

3.1%

2.4%

1.8%

1.3%
Table 2. EIA Model Technology Performance and Cost Assumptions for 

Conventional Combustion Turbines

Data Item Units Value

Size MW 160

Total Overnight Cost in 2008 2007 $/Kw $670

Variable O&M Million $/Kwh $3.57

Fixed O&M $ $12.11

Heat Rate BTU/Kwh 10,810

Source: EIA 2009

Two other sources cited capital cost values as high as roughly $1,000/Kw for smaller 

combustion turbines in the 15 to 40 MW range. Dollar per Kw costs decrease with 

increasing generating unit size and since the units for this analysis will not be as large as 

the one cited in Table 2, a midpoint value between $670 and $1,000/Kw of $850/Kw was 

selected for the combustion turbine capital cost estimate. 

Capital Costs

Table 3 provides combustion turbine generating capacity and capital costs for an example

1,000 MW plant for each plant type. The capital costs for an “average” difficulty closed 

cycle cooling retrofit are also shown for comparison.

Table 3. Capital Costs for Energy Penalty Combustion Turbines and Closed Cycle 

Cooling

O&M Costs and Revenue

O&M costs and revenue of the combustion turbine turbines are provided as a rough 

measure of the economic viability of this as an option to offset the energy penalty. These 

costs will be highly dependent on the capacity utilization rate (CUR), the fuel costs, and 

the wholesale price of electricity sold which are difficult to predict. The costs presented 

in Table 4 are rough estimates that are based on data shown in Table 2 and the following 

assumptions:

 CUR is 15%;

 Fuel cost of natural gas is $5.00/1,000 cf based on November 2009 EIA Electric 

Power Price;

Plant Type

Total 

Penalty

Total Initial 

Plant 

Generation 

(MW)

Combustion 

Turbine Size 

(MW)

Combustion 

Turbine 

Capital Cost

Circulating 

Flow (gpm)

"Average" 

Cooling Tower 

Retrofit Capital 

Costs

Nuclear 4.7% 1,000 47 $39,581,950 910,000 $226,590,000

Non-nuclear (Old & New) 3.1% 1,000 31 $26,448,600 680,000 $169,320,000

Non-Nuclear 39% 2.4% 1,000 24 $20,385,550 590,000 $146,910,000

Non-Nuclear 45% 1.8% 1,000 18 $15,462,350 430,000 $107,070,000

Combined Cycle 1.3% 1,000 13 $11,105,817 270,000 $67,230,000

Combustion Turbine Costs: $850 $$/KW

Cooling Tower Retrofit Cost: $249.00 $$/gpm
 Heat content of Natural gas is 1,028,000 BTU/cf

 Average peak wholesale power price of $81/MWh

Of particular importance to these costs are the costs of fuel and the wholesale cost of 

electricity during peak periods. The fuel cost is calculated to be $55.56 /MWh based on 

the above assumptions. The assumed average peak wholesale price of $81 is a BPJ value 

based on the 95th percentile value from a table of the EIA 2009 daily “Peak Wholesale 

Day Ahead Prices for the NEPOOL (New England) Hub. It is not clear how accurate this 

peaking power price is, so this value may require adjustment to get a more accurate 

measure. The revenue shown is simply the sales minus the fuel and O&M costs. The

relatively high fuel cost is the reason combustion turbines are generally reserved for peak 

power demand when the wholesale cost of power rises well above the combined fuel and 

variable O&M cost. In each of these example calculations the combustion turbine capital 

cost is 51 times as large as estimated annual revenue.

Table 4. O&M and Revenue Estimates for Natural Gas Combustion Turbines

References

EIA. Energy Information Administration/Assumptions to the Annual Energy Outlook 

2009. Table 8.2. Cost and Performance Characteristics of New Central Station Electricity

Generating Technologies. from EIA website: 

http://www.eia.doe.gov/oiaf/aeo/overview/electricity.html

Plant Type CUR

Annual 

Power 

(MWh) Fuel Cost

Variable 

O&M Fixed O&M Sales Revenue

Nuclear 15% 61,189 $3,399,871 $218,445 $563,926 $4,956,312 $774,070

Non-nuclear (Old & New) 15% 40,886 $2,271,789 $145,965 $376,815 $3,311,800 $517,232

Non-Nuclear 39% 15% 31,514 $1,751,006 $112,504 $290,434 $2,552,607 $398,663

Non-Nuclear 45% 15% 23,903 $1,328,131 $85,334 $220,293 $1,936,141 $302,384

Combined Cycle 15% 17,168 $953,928 $61,291 $158,225 $1,390,631 $217,187

Fuel Cost $55.56 $$/MWh

Variable O&M $3.57 $$/MWh

Fixed O&M $12.11 $$/Kw

Ave Peak Wholesale Price $81 $$/MWh