APPENDIX C

EMISSION REDUCTION STUDY 

VOLUME 1 

ADDENDUM AUGUST 20, 2007 

PSC REF#:81031 Public Service Commission of Wisconsin

RECEIVED: 08/24/07, 10:51:33 AM
WE ENERGIES 

SOUTH OAK CREEK UNITS 5, 6, 7 AND 8 

NOx AND SO2 EMISSIONS REDUCTION STUDY 

VOLUME 1 

TECHNICAL AND APPENDICES 

ADDENDUM AUGUST 20, 2007 

Washington Group International, Inc. 

510 Carnegie Center 

Princeton, New Jersey 08540 
SOUTH OAK CREEK UNITS 5-8 

 NOX AND SO2EMISSIONS REDUCTION STUDY

REPORT REVISION PAGE

Project Name: South Oak Creek Units 5 – 8 Discipline: All 

Client: We Energies 

Latest Revision: 4 

Status 

Rev. 

No. Date Prepared By Pages Description of Changes 

Draft 0 09/08/06 T. Tsui Draft Report for Client Review 

Final 1 09/25/06 T. Tsui Final Report 

Revision 2 10/12/06 T. Tsui Final Report 

Revision 3 04/26/07 A. Crawford Final Report 

Addendum 4 8/20/07 T. Tsui Addendum 

 

 

 

 

APPENDIX C, EMISSIONS REDUCTION STUDY 1
SOUTH OAK CREEK UNITS 5-8 

 NOX AND SO2EMISSIONS REDUCTION STUDY

ADDENDUM SUMMARY 

Background 

In March, 2007, Washington Group International (WGI) was retained by We Energies to perform 

interim Engineering, Procurement, and Construction activities for the South Oak Creek Air Quality 

Control System Project. As part of that work, detailed design basis engineering is being performed, 

in part to validate conceptual studies and estimates performed under the original Emission Reduction 

Study. That study concludes that the base case General Arrangement should be Wet Flue Gas 

Desulphurization (WFGD) followed by Selective Catalytic Reduction (SCR) (tail end design), with 

Gas-Gas Heat Exchangers (GGH) across the SCR modules, as the lowest Total Evaluated Cost 

(TEC) solution. The Study also recommended that a more detailed evaluation of all possible FGDSCR arrangements be performed, since the relative difference in TEC was reasonably close. 

Contracts for Engineering Services were also executed between We Energies and Riley Power 

Incorporated (RPI), the preferred SCR supplier, and Wheelabrator Air Pollution Control (WAPC), 

the preferred FGD supplier, to assist in the development of the overall Project design. A priority for 

the engineering teams was identifying the impacts of different operating conditions and 

arrangements on each of the suppliers’ performance, along with validating the initial assumptions of 

capital and operating costs that were used in the Study. 

Detailed design efforts started with the tail end design. The original assumption for the FGD GGH 

was a regenerative design. The leakage inherent in this design indicated challenges to WAPC in 

meeting SO2 removal requirements, so a zero leakage design was evaluated. Both designs also 

required steam reheat to maintain the minimum inlet temperature required by the absorber to 

maintain the water balance in the absorber, as well as maintaining sufficient temperature 

downstream of the FGD to minimize corrosion in the ductwork and fans. The zero leakage design is 

also significantly more expensive than the base regenerative heater design. Since there were now 

significant new costs identified, both in process capital for the different heater design, and in 

operating costs for the significantly higher steam consumption, an evaluation of SCR before the 

WFGD (cold side design) was started. 

The study already recognized that the FGD GGH would not be required, and that a larger SCR 

reactor would be required, so the capital cost evaluation for this arrangement did not change 

significantly. A major catalyst manufacturer (CERAM) was contacted to provide a detailed technical 

evaluation of catalyst issues with a cold side design, as well as tail end design. CERAM has world 

wide experience with both styles of SCR arrangement. The study originally assumed that cold side 

catalyst had a total life cycle cost similar to the standard hot side catalyst. The CERAM experience 

indicated that the total life cycle catalyst cost was closer to a tail end design, especially when in 

service on Powder River Basin fuel. Several other catalyst manufacturers were contacted, who 

confirmed the new relative life cycle cost assumption. 

Results 

Several significant cost differences were identified in the preliminary design basis engineering 

effort. The IECCOST estimating program was rerun with the new cost estimate information. The 

APPENDIX C, EMISSIONS REDUCTION STUDY 2
SOUTH OAK CREEK UNITS 5-8 

 NOX AND SO2EMISSIONS REDUCTION STUDY

appropriate tables from Sections 2,4,5 and 7 from the Study were updated with the new cost 

information, and are attached with this Addendum. 

The current evaluation shows that SCR followed by FGD (cold side design) has a significant Total 

Evaluated Cost advantage over the tail end design, primarily driven by the significant increase in 

steam consumption in the tail end design to maintain FGD water balance, as well as the significantly 

lower than originally assumed life cycle cost of catalyst in the cold side design. 

APPENDIX C, EMISSIONS REDUCTION STUDY 3
SOUTH OAK CREEK UNITS 5-8 

 NOX AND SO2EMISSIONS REDUCTION STUDY

 

Summary Evaluation 

 System 

Cost $M 

SCR 

Hot Side 7 & 8*

Cold Side 5 & 6 

SCR 

Cold Side 

(All Units) 

SCR 

Tail End 

(All Units) 

Capital Cost 193.4 190.5 178.6 

Levelized O&M 13.8 12.8 14.3 

 Total Evaluated Cost 327.5 315.0 317.4 

Evaluated Rank 19 22 20 

*Including $18M power penalty. 

APPENDIX C, EMISSIONS REDUCTION STUDY 4
SOUTH OAK CREEK UNITS 5-8 

 NOX AND SO2EMISSIONS REDUCTION STUDY

 Table 2-4. Economic Criteria 

Variable Units Value 

Economic Criteria 

 Discount Rate (MAR) % 7.5 

 AFUDC Rate % 10.3 

 Construction Period Years 3 

 First Year Fixed Charge Rate % 19.2 

 Levelized Fixed Charge Rate (FCR) % 14.4 

 Levelized Fixed Charge Rate (FCR, constant $) % 10.5 

 Service Life For Units 5 & 6 Years 17 

 Service Life For Units 7 & 8 Years 17 

 Start-Up Date Year 2009 

 Inflation Rate % 3.0 

 Land Cost (@ Start-Up Date) $ 0 

 Power Outage Days(1) Days 0 

 Cost Basis Year 2006 

 Construction Labor Rate $/hr 50.00 

 Prime Contractor's Markup (% of equip. cost) % 10 

 Reagent Bulk Storage Days 30 

Operating Cost Data 

 FGD Operating Labor Rate $/hr 33.0 

 Power Cost Mills/kWh 40.0 

 Replacement Power Cost Mills/kWh 40.0 

 Steam Cost - high pressure $/1000 lbs 5.50 

 Methane Cost $/1000 scf 8.00 

 Activated Coke Cost $/ton 600 

 Sulfuric Acid Byproduct Price $/ton 30 

 Limestone Delivered Cost $/ton 15 

 Pebble Lime Delivered Cost $/ton 60 

 Ammonia Delivered Cost (as 29% aqueous solution) $/ton 180 

 Hydrogen Peroxide (as 50% aqueous solution) $/ton 318 

 ATS (as 60% aqueous solution) $/ton 180 

 Ammonia Sulfate By Product Credit $/ton 190 

 Gypsum Revenue $/ton 2 

 Waste Disposal (landfill) $/ton 35 

 Water Cost: 

 Fresh Water $/1000 gal 0.40 

 Blowdown Water $/1000 gal 0.00 

 Cooling Water $/1000 gal 0.16 

 (1) Power Outage Days – For this study it has been assumed that the tie-ins of wet or dry FGD equipment and 

NOx equipment can be completed during a future scheduled 5 to 6 weeks outage period (no power 

generation lost during construction). 

APPENDIX C, EMISSIONS REDUCTION STUDY 5
SOUTH OAK CREEK UNITS 5-8 

 NOX AND SO2EMISSIONS REDUCTION STUDY

Table 4-2A. Technology Evaluation of SCR for Units 5&6 

Cold Side Tail End 

Ranking (0-5) 

Technology 4 3 

Constructability 5 5 

Operating and Maintenance 3 3 

Commercial Risk 5 4 

Performance Margin 5 5 

 Total 22 20 

Other Factors 

Scaling Required No No 

Can meet 0.07 lbs/MMBtu NOx Emission? Yes Yes 

Unconditional Commercial Guarantees Yes Yes 

Table 4-2B. Technology Evaluation of SCR For Units 7&8 

Hot Side Cold Side Tail End 

Ranking (0-5) 

Technology 5 4 3 

Constructability 1 5 5 

Operating and Maintenance 2 3 3 

Commercial Risk 3 5 4 

Performance Margin 5 5 5 

 Total 16 22 20 

Other Factors 

Scaling Required No No No 

Can meet 0.07 lbs/MMBtu NOx Emission? Yes Yes Yes 

Unconditional Commercial Guarantees Yes Yes Yes 

APPENDIX C, EMISSIONS REDUCTION STUDY 6
SOUTH OAK CREEK UNITS 5-8 

 NOX AND SO2EMISSIONS REDUCTION STUDY

Table 4.8A 

Cost Summary for Tail-End SCRs 

(Cost in Millions) 

Unit 7 & 8 

Unit 5 & 6 

Incremental Total 

Capital ($2006) $95.6 $83.0 $178.6 

First Year O&M Steam $2.8 $2.2 

Other $3.1 $2.9 

Total $5.9 $5.1 $11.0 

Levelized O&M Steam $3.5 $2.9 

Other $4.0 $3.9 

Total $7.5 $6.8 $14.3 

Capitalized O&M Steam $34.0 $28.3 

Other $38.5 $37.9 

Total $72.5 $66.2 $138.8 

Total Evaluated Cost $168.1 $149.3 $317.4 

Table 4.8B 

Cost Summary for Cold-Side SCRs 

(Cost in Millions) 

Unit 7 & 8 

Unit 5 & 6 

Incremental Total 

Capital ($2006) $101.5 $89.0 $190.5 

First Year O&M Steam $2.4 $1.8 

Other $3.0 $2.8 

Total $5.5 $4.6 $10.0 

Levelized O&M Steam $3.0 $2.4 

Other $3.8 $3.6 

Total $6.8 $6.0 $12.8 

Capitalized O&M Steam $29.4 $23.1 

Other $37.0 $34.9 

Total $66.5 $58.0 $124.5 

Total Evaluated Cost $168.0 $147.0 $315.0 

APPENDIX C, EMISSIONS REDUCTION STUDY 7
SOUTH OAK CREEK UNITS 5-8 

 NOX AND SO2EMISSIONS REDUCTION STUDY

Table 4.8C 

Cost Summary for Cold-Side SCRs (Units 5 & 6) and Hot Side SCRs (Units 7 & 8) 

(Cost in Millions) 

Unit 7 & 8 

Unit 5 & 6 

Incremental Total 

Capital ($2006) $104.4 $89.0 $193.4 

First Year O&M Steam $0.1 $1.9 

Other $6.1 $2.9 

Total $6.2 $4.8 $10.8 

Levelized O&M Steam $0.2 $2.4 

Other $7.7 $3.6 

Total $7.9 $6.0 $13.8 

Capitalized O&M Steam $1.7 $23.1 

Other $74.4 $34.9 

Total $76.1 $58.0 $134.1 

Total Evaluated Cost * $180.5 $147.0 $327.5 

Note (*) Including $18M power penalty 

Table 4.8D 

Cost Summary for Tail-End SCRs (Units 5 & 6) and Hot Side SCRs (Units 7 & 8) 

(Cost in Millions) 

Unit 7 & 8 

Unit 5 & 6 

Incremental Total 

Capital ($2006) $104.4 $83.1 $187.5 

First Year O&M Steam $0.1 $2.2 

Other $6.2 $3.2 

Total $6.3 $5.4 $10.9 

Levelized O&M Steam $0.2 $2.8 

Other $7.7 $4.1 

Total $7.8 $6.8 $14.6 

Capitalized O&M Steam $1.7 $26.7 

Other $74.4 $39.5 

Total $76.1 $66.3 $142.4 

Total Evaluated Cost (*) $180.5 $149.5 $330.0 

Note (*) Including $18M power penalty 

APPENDIX C, EMISSIONS REDUCTION STUDY 8
SOUTH OAK CREEK UNITS 5-8 

 NOX AND SO2EMISSIONS REDUCTION STUDY

Table 5-2. Evaluation of LSFO System Based on Cold-Side SCR Selection 

(Cost in Millions) 

Units 7 & 8 

Units 5 & 6 

Incremental Total 

Cost ($2006) 

Capital Cost $148 $162.8 $310.8 

First Year O&M $10.5 $8.1 $18.6 

Levelized O&M $13.2 $13.8 $27.0 

Capitalized O&M $128.2 $134.0 $262.2 

 Total Evaluated Cost $276.3 $296.7 $573.0 

Ranking (0-5) 

Technology 5 5 5 

Constructability 5 5 5 

Operating and Maintenance 3 3 3 

Commercial Risk 5 5 5 

Performance Margin 5 5 5 

 Total 23 23 23 

Other Factors 

Scaling Required No No 

Unconditional Commercial Guarantees Yes Yes 

APPENDIX C, EMISSIONS REDUCTION STUDY 9
SOUTH OAK CREEK UNITS 5-8 

 NOX AND SO2EMISSIONS REDUCTION STUDY

Table 7-1 Evaluation results of Case 1 

(Cost in Millions) 

Total 

Technology NOx SO2 NOx + SO2

Tail End SCR LSFO 

Tail End SCR + 

LSFO 

Cost ($2006) 

Capital Cost $178.6 $360.8 $539.4 

First Year O&M $10.9 $20.6 $31.5 

Levelized O&M $14.3 $29.2 $43.5 

Capitalized O&M $138.8 $283.6 $422.4 

 Total Evaluated Cost $317.4 $644.3 $961.7 

Ranking (0-5) 

Technology 3 5 8 

Constructability 5 5 10 

Operating and Maintenance 3 3 6 

Commercial Risk 4 5 9 

Performance Margin 5 5 10 

 Total (Note 1) 20 23 43 

Other Factors 

Scaling Required No No No 

Can meet 0.07 lbs/MMBtu NOx Emission? Yes NA Yes 

Unconditional Commercial Guarantees Yes Yes Yes 

Chemical Used Ammonia Limestone 

APPENDIX C, EMISSIONS REDUCTION STUDY 10
SOUTH OAK CREEK UNITS 5-8 

 NOX AND SO2EMISSIONS REDUCTION STUDY

Table 7-2 Evaluation Results of Case 2 

(Cost in Millions) 

Total 

NOx SO2 NOx + SO2

Technology Cold Side 

SCR LSFO 

Cold Side SCR + 

LSFO 

Cost ($2006) 

Capital Cost $190.5 $310.8 $501.3 

First Year O&M $10.1 $18.6 $28.7 

Levelized O&M $12.8 $27.0 $39.8 

Capitalized O&M $124.5 $262.2 $386.7 

 Total Evaluated Cost $315.0 $573.0 $888.0 

Ranking (0-5) 

Technology 4 5 9 

Constructability 5 5 10 

Operating and Maintenance 3 3 6 

Commercial Risk 5 5 10 

Performance Margin 5 5 10 

 Total 22 23 45 

Other Factors 

Scaling Required No No No 

Can meet 0.7 lbs/MMBtu NOx Emission? Yes NA Yes 

Unconditional Commercial Guarantees Yes Yes Yes 

Chemical Used Ammonia Limestone 

APPENDIX C, EMISSIONS REDUCTION STUDY 11
SOUTH OAK CREEK UNITS 5-8 

 NOX AND SO2EMISSIONS REDUCTION STUDY

 Table 7-3 Evaluation Results of Case 3 

(Cost in Millions) 

Total 

NOx SO2 NOx + SO2

Technology Hot Side & 

Cold Side SCR LSFO SCR + LSFO 

Cost ($2006) 

Capital Cost $193.4 $313.3 $506.7 

First Year O&M $10.8 $18.8 $29.6 

Levelized O&M $13.8 $26.8 $40.6 

Capitalized O&M $134.1 $260.3 $394.4 

 Total Evaluated Cost* $327.5 $573.5 $901.0 

Ranking (0-5) 

Technology 4.5 5 9.5 

Constructability 3 5 8 

Operating and Maintenance 2.5 3 5.5 

Commercial Risk 4 5 9 

Performance Margin 5 5 10 

 Total 19 23 42 

Other Factors 

Scaling Required No No No 

Can meet 0.7 lbs/MMBtu NOx Emission? Yes NA Yes 

Unconditional Commercial Guarantees Yes Yes Yes 

Chemical Used Ammonia Limestone 

*Including $18M power penalty. 

APPENDIX C, EMISSIONS REDUCTION STUDY 12
SOUTH OAK CREEK UNITS 5-8 

 NOX AND SO2EMISSIONS REDUCTION STUDY

APPENDIX C, EMISSIONS REDUCTION STUDY 13

Table 7-4 Evaluation Results of Case 4 

(Cost in Millions) 

Total 

NOx SO2 NOx + SO2

Technology Hot Side & Tail 

End SCR LSFO SCR + LSFO 

Cost ($2006) 

Capital Cost $187.5 $338.1 $525.5 

First Year O&M $10.9 $19.5 $29.9 

Levelized O&M $14.8 $27.8 $42.6 

Capitalized O&M $142.4 $270.7 $413.1 

 Total Evaluated Cost* $329.9 $608.8 $938.6 

Ranking (0-5) 

Technology 4 5 9 

Constructability 3 5 8 

Operating and Maintenance 2.5 3 5.5 

Commercial Risk 3.5 5 8.5 

Performance Margin 5 5 10 

 Total 18 23 41 

Other Factors 

Scaling Required No No No 

Can meet 0.7 lbs/MMBtu NOx Emission? Yes NA Yes 

Unconditional Commercial Guarantees Yes Yes Yes 

Chemical Used Ammonia Limestone 

*Including $18M power penalty. 

Table 7-5. Summary of Cases 1 to 4 (Cost in Millions) 

Cases Unit # System Component 

Total 

Process 

Capital 

Total 

Evaluated 

Cost 

Power 

Outage 

Penalty 

Total 

Evaluated 

Cost + 

Penalty Ranking 

1 All Four LSFO +Tail End SCR $539 $962 $0 $962 43 

2 All Four LSFO + Cold Side SCR $501 $888 $0 $888 45 

3 Units 5 & 6 

Units 7 & 8 

LSFO +Cold Side SCR 

LSFO + Hot Side SCR 

$507 $901 $18 $919 42 

4 Units 5 & 6 

Units 7 & 8 

LSFO +Tail End SCR 

LSFO + Hot Side SCR 

$526 $939 $18 $957 41