Tetra Tech, Inc.

10306 Eaton Place, Suite 340 Fairfax, VA 22030 phone 703
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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
Th is 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 t yp es 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 b y 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

E stimate 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 anal ys is are sized to replace the power plant energy penalty associated with converting a once

- through cooling s ys tem to a closed Table 1 below presents the estimated total energy penalty for different t yp es of power penalty is based on a condenser ∆ T of 15 o F 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 b y EIA in their modeling for the 2009 Annual Energy

As sumed Plant Efficiency Turbine

Efficiency Penalty gpm/M W 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 t yp es of power F and uses the

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

turbine that are used b y 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. D ollar per K w costs decrease with increasing generating unit size and since the units for this anal ys is 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 ty pe
. The capital costs for an “average” difficulty closed cycle cooling retrofit are also shown for compariso n. 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 offs et the energy penalty . These costs will be highl y dependent on the capacity utilization rate (CUR), the fuel costs, and the wholesale price of electricity sold which are difficult to predict . The cost s presented in Table 4 are rough estimates that are base d on data shown in Table 2 and the following assumptions:

 CUR is 15%;

 Fuel cost of natural gas is $5.00/1,000 c f 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 B PJ value based on the 95 th percentile value from a table of the EIA 2009 dail y “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 relativel y high fuel cost is the reason combustion turbines are generall y 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. En ergy

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 Com bined Cycle 15% 17,168 $953,928 $61,291 $158,225 $1,390,631 $217,187 Fuel Cost $55.56 $$/MW h Variable O&M $3.57 $$/MW h Fixed O&M $12.11 $$/Kw Ave Peak W holesale Price $81 $$/MW h