IPM Model – Revisions to Cost and Performance for APC Technologies

Wet FGD Cost Development Methodology

FINAL

August 2010

Project 12301-007 

Perrin Quarles Associates, Inc.

Prepared by

55 East Monroe Street • Chicago, IL 60603 USA • 312-269-2000
 

LEGAL NOTICE 

This analysis ("Deliverable") was prepared by Sargent & Lundy, L.L.C. ("S&L"), expressly for the sole use 

of Perrin Quarles Associates, Inc. ("Client") in accordance with the agreement between S&L and Client. 

This Deliverable was prepared using the degree of skill and care ordinarily exercised by engineers 

practicing under similar circumstances. Client acknowledges: (1) S&L prepared this Deliverable subject to 

the particular scope limitations, budgetary and time constraints, and business objectives of the Client; (2) 

information and data provided by others may not have been independently verified by S&L; and (3) the 

information and data contained in this Deliverable are time sensitive and changes in the data, applicable 

codes, standards, and acceptable engineering practices may invalidate the findings of this Deliverable. Any 

use or reliance upon this Deliverable by third parties shall be at their sole risk. 

This work was funded and reviewed by the U.S. Environmental Protection Agency under the supervision of 

William A. Stevens, Senior Advisor – Power Technologies. Additional input and review was provided by 

Dr. Jim Staudt, President of Andover Technology Partners. 
IPM Model – Revisions to Cost and Performance for Project No. 12301-007

APC Technologies August 20, 2010

Wet FGD Cost Development Methodology – Final 

Page 1 

Establishment of Cost Basis 

The 2004 to 2006 industry cost estimates for wet FGD units from the "Analysis of MOG and 

Ladco's FGD and SCR Capacity and Cost Assumptions in the Evaluation of Proposed EGU 1 

and EGU 2 Emission Controls" prepared for Midwest Ozone Group (MOG) were compared to 

the Sargent & Lundy LLC (S&L) in-house database. Agreement of the data was confirmed 

between the industry estimates and the S&L data. 

The MOG and S&L cost data from 2004 to 2006 were converted to 2007 dollars based on the 

Chemical Engineering Plant Index (CEPI) data. Additional proprietary S&L in-house data from 

2007 were included to confirm the index validity. 

Cost data from the various sources showed similar trends versus generating capacity. Escalation 

based on the CEPI was deemed acceptable. All three data sources were combined so as to 

provide a representative wet FGD cost basis. 

The 2004 through 2007 data were escalated to 2009 to represent market conditions. 

The least squares curve fit of the data was defined as a "typical" wet FGD retrofit for removal of 

98% of the inlet sulfur. It should be noted that the lowest available SO2 emission guarantees, 

from the original equipment manufactures of wet FGD systems, are 0.04 lb/MMBtu. The typical 

wet FGD retrofit was based on: 

• Retrofit Difficulty =1 (Average retrofit difficulty) ; 

• Gross Heat Rate = 9500 Btu/kWh; 

• SO2 Rate = 3.0 lb/MMBtu; 

• Type of Coal = Bituminous; 

• Project Execution = Multiple lump sum contracts; and 

• Recommended SO2 emission floor = 98% removal efficiency or 0.06 lb/MMBtu. 

Units below 100 MW will typically not install a wet FGD system. Sulfur reductions for the 

small units would be accomplished by; treating smaller units at a single site with one wet FGD 

system, switching to a lower sulfur coal, repowering with natural gas, dry sorbent injection, 

and/or a reduction in operating hours. Capital costs of approximately $750/kW may be used for 

units below 100 MW under the premise that these will be combined. 
IPM Model – Revisions to Cost and Performance for Project No. 12301-007

APC Technologies August 20, 2010

Wet FGD Cost Development Methodology – Final 

Page 2 

Methodology 

Inputs 

Several input variables are required in order to predict future retrofit costs. The gross unit size in 

MW (equivalent acfm) and sulfur content of the fuel are the major variables for the capital 

estimation. A retrofit factor that equates to difficulty in construction of the system must be 

defined. The costs herein could increase significantly for congested sites. The gross unit heat 

rate will factor into the amount of flue gas generated and ultimately the size of the absorber, 

reagent preparation, waste handling, and balance of plant costs. The SO2 rate will have the 

greatest influence on the reagent handling and waste handling facilities. The type of fuel 

(Bituminous, PRB, or Lignite) will influence the flue gas quantities as a result of the different 

typical heating values. 

The evaluation includes a user selected option for a wastewater treatment facility. The base 

capital cost includes minor physical and chemical wastewater treatment. However, in the future 

more extensive wastewater handling may be required. Although an option for wastewater 

treatment is provided, no logic has been developed to accommodate the additional wastewater 

treatment costs. 

Outputs 

Total Project Costs (TPC) 

First the base installed costs are calculated for each required module (BM_). The base installed 

costs include: 

• All equipment; 

• Installation; 

• Buildings; 

• Foundations; 

• Electrical; 

• Minor physical and chemical wastewater treatment (WWT); and 

• Average retrofit difficulty. 

The modules are: 

BMR = Base absorber island cost 

BMF = Base reagent preparation cost 

BMW = Base waste handling cost 

BMB = Base balance of plan costs including: ID or booster fans, new wet chimney, piping, 

ductwork, minor WWT, etc. 

BMWW = Base wastewater treatment facility for future use. 

BM = BMR + BMF + BMW + BMB 
IPM Model – Revisions to Cost and Performance for Project No. 12301-007

APC Technologies August 20, 2010

Wet FGD Cost Development Methodology – Final 

Page 3 

The total base installed cost (BM) is then increased by: 

• Engineering and construction management costs at 10% of the BM cost; 

• Labor adjustment for 6 x 10 hour shift premium, per diem, etc., at 10% of the BM 

cost; and 

• Contractor profit and fees at 10% of the BM cost. 

A capital, engineering, and construction cost subtotal (CECC) is established as the sum of the 

BM and the additional engineering and construction fees. 

Additional costs and financing expenditures for the project are computed based on the CECC. 

Financing and additional project costs include: 

• Owner's home office costs (owner's engineering, management, and procurement) at 

5% of the CECC; and 

• Allowance for Funds Used During Construction (AFUDC) at 10% of the CECC and 

owner's costs. The AFUDC is based on a three-year engineering and construction 

cycle. 

The total project cost is based on a multiple lump sum contract approach. Should a turnkey 

engineering procurement construction (EPC) contract be executed, the total project cost could be 

10 to 15% higher than what is currently estimated. 

Escalation is not included in the estimate. The total project cost (TPC) is the sum of the CECC 

and the additional costs and financing expenditures. Table 1 contains an example capital cost 

estimation.
IPM Model – Revisions to Cost and Performance for Project No. 12301-007

APC Technologies August 20, 2010

Wet FGD Cost Development Methodology – Final 

Page 4 

Table 1. Example Capital Cost Estimate for the Wet FGD System (Costs are all based on 2009 
IPM Model – Revisions to Cost and Performance for Project No. 12301-007

APC Technologies August 20, 2010

Wet FGD Cost Development Methodology – Final 

Page 5 

Fixed O&M (FOM) 

The fixed operating and maintenance (O&M) cost is a function of the additional 

operations staff (FOMO), maintenance labor and materials (FOMM), and administrative 

labor (FOMA) associated with the wet FGD installation. A future fixed O&M cost 

category is included to account for an extensive wastewater treatment facility. At this 

time, the wastewater treatment fixed O&M (FOMWW) is not estimated and is included at 

zero dollars. The FOM is the sum of the FOMO, FOMM, FOMA, and FOMWW. 

The following factors and assumptions underlie calculations of the FOM: 

• All of the FOM costs were tabulated on a per kilowatt-year (kW yr) basis. 

• In general, 12 additional operators are required for a 500 MW or smaller 

installation. Units larger than 500 MW require a total of 16 additional 

operators. The FOMO was based on the number of additional operations staff 

required as a function of generating capacity. 

• The fixed maintenance materials and labor is a direct function of the process 

capital cost (BM). 

• The administrative labor is a function of the FOMO and FOMM. 

Variable O&M (VOM) 

Variable O&M is a function of: 

• Reagent use and unit costs; 

• Waste production and unit disposal costs; 

• Additional power required and unit power cost; and 

• Makeup water required and unit water cost. 
IPM Model – Revisions to Cost and Performance for Project No. 12301-007

APC Technologies August 20, 2010

Wet FGD Cost Development Methodology – Final 

Page 6 

The following factors and assumptions underlie calculations of the VOM: 

• All of the VOM costs were tabulated on a per megawatt-hour (MWh) basis. 

• The reagent usage is a function of gross unit size, SO2 feed rate, and removal 

efficiency. The estimated reagent usage was based on a sulfur removal 

efficiency of 98% and a calcium-to-sulfur stoichiometric ratio of 1.03. The 

basis for the limestone purity was 90% CaCO3 with the balance being inert 

material. 

• The waste generation rate is directly proportional to the reagent usage and is 

estimated based on 10% moisture in the by-product. 

• The additional power required includes increased fan power to account for the 

added wet FGD pressure drop. This requirement is a function of gross unit 

size (actual gas flow rate) and sulfur rate. 

• The makeup water rate is a function of gross unit size (actual gas flow rate) 

and sulfur feed rate. 

Input options are provided for the user to adjust the variable O&M costs per unit. 

Average default values are included in the base estimate. The variable O&M costs per 

unit options are: 

• Limestone cost in $/ton; 

• Waste disposal costs in $/ton; 

• Auxiliary power cost in $/kWh; 

• Makeup water costs in $/1000 gallon; and 

• Operating labor rate (including all benefits) in $/hr. 
IPM Model – Revisions to Cost and Performance for Project No. 12301-007

APC Technologies August 20, 2010

Wet FGD Cost Development Methodology – Final 

Page 7 

The variables that contribute to the overall VOM are: 

VOMR = Variable O&M costs for limestone reagent 

VOMW = Variable O&M costs for waste disposal 

VOMP = Variable O&M costs for additional auxiliary power 

VOMM = Variable O&M costs for makeup water 

VOMWW = Variable O&M costs for wastewater treatment 

A future variable O&M cost category is included to account for an extensive wastewater 

treatment facility. At this time, the wastewater treatment variable O&M (VOMWW) is 

not estimated and is included at zero dollars. 

The total VOM is the sum of VOMR, VOMW, VOMP, VOMM, and VOMWW. Table 2 

contains an example O&M cost estimate, while Table 3 is a complete capital and O&M 

cost estimate worksheet.
IPM Model – Revisions to Cost and Performance for Project No. 12301-007

APC Technologies August 20, 2010

Wet FGD Cost Development Methodology – Final 

Page 8 

Table 2. Example O&M Cost Estimate for the Wet FGD System (Costs are all based on 2009 
IPM Model – Revisions to Cost and Performance for Project No. 12301-007

APC Technologies August 20, 2010

Wet FGD Cost Development Methodology – Final 

Page 9 

Table 3. Example Complete Cost Estimate for the Wet FGD System (Costs are all based on 200
IPM Model – Revisions to Cost and Performance for Project No. 12301-007

APC Technologies August 20, 2010

Wet FGD Cost Development Methodology – Final 

Page 10