IPM Model – Revisions to Cost and Performance for APC Technologies

SCR 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 APC Project No. 12301-007 

Technologies August 20, 2010 

SCR Cost Development Methodology – Final 

1 

Establishment of Cost Basis 

The formulation of the SCR cost estimating model is based upon two data bases of actual 

SCR projects. The data bases used were those of the 2004 to 2006 industry cost 

estimates for SCR units published in 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” report prepared for 

Midwest Ozone Group (MOG) and a Sargent & Lundy LLC (S&L) proprietary in-house 

database. The available data was analyzed in detail regarding project specifics such as 

coal type, NOx reduction efficiency and air pre-heater requirements, and updated to 

include the cost of SCR projects available with both data sets. 

The data sets were escalated to update the MOG information to 2009 and all of the data 

was cross referenced with current 2009 projects. The MOG and S&L cost data were 

updated to reflect the changes in equipment and labor rates. The CEPCI index for power 

plants was used to escalate the costs. The Handy-Witman index was also used to escalate 

the project costs to account for regional effects; the results were compared with the 

CEPCI index and were within 2% for total project costs. 

The comparison between the two sets of data was refined by fitting each data set with a 

least squares curve to obtain an average $/kW project cost as a function of unit size. The 

data set was then collectively used to generate an average least-squares curve fit. The 

curve fit indicated that both sets of data produced similar average costs (within 4%) at the 

200 MW range, but deviate as the unit size increases to approximately 11% at 600 MW 

and 13% at 900MW. The costs for retrofitting a plant smaller than 100 MW increase 

rapidly due to the economy of size. The older units which comprise a large proportion of 

the plants in this range generally have more compact sites with very short flue gas ducts 

running from the boiler house to the chimney. Because of the limited space, the SCR 

reactor and new duct work can be expensive to design and install. Additionally, the 

plants might not have enough margins in the fans to overcome the pressure drop due to 

the duct work configuration and SCR reactor and therefore new fans may be required. 

The least squares curve fit was based upon an average of the SCR retrofit projects. 

Retrofit difficulties associated with an SCR may result in capital cost increases of 30 to 

50% over the base model. The least squares curve fits were based upon the following 

assumptions: 

• Retrofit Factor =1 

• Gross Heat Rate = 9880 

• SO2 Rate = < 3 lb/MMBtu 

• Type of Coal = Bituminous 

• Project Execution = Multiple lump sum contracts 
IPM Model – Revisions to Cost and Performance for APC Project No. 12301-007 

Technologies August 20, 2010 

SCR Cost Development Methodology – Final 

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Methodology 

Inputs 

To predict future SCR retrofit costs several input variables are required. The unit size in 

MW is the major variable for the capital cost estimation followed by the type of fuel 

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

the moisture content. The fuel type also affects the air pre-heater costs if ammonium 

bisulfate or sulfuric acid deposition poses a problem. The unit heat rate factors into the 

amount of flue gas generated and ultimately the size of the SCR reactor and reagent 

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

be defined. The NOx rate and removal efficiency will impact the amount of catalyst 

required and size of the reagent handling equipment. The elevation of the site must be 

considered separately and factored into the unit MW size accordingly due to its effects on 

the flue gas volume. 

The inputs that impact the variable O&M costs are based primarily on the plant capacity 

factor and the removal efficiency. The NOx removal efficiency specifically affects the 

SCR catalyst, reagent and steam costs. The lower level of NOx removal is recommended 

as: 

• 0.07 NOx lb/mmBtu – Bituminous 

• 0.05 NOx lb/mmBtu – PRB 

• 0.05 NOx lb/mmBtu – Lignite 

Outputs 

Total Project Costs (TPC) 

First the bare costs are calculated for each required module (BM). The bare module costs 

include: 

• Equipment 

• Installation 

• Buildings 

• Foundations 

• Electrical 

• Retrofit factor 

The bare module costs do not include: 

• Engineering and Construction Management 

• Owner's cost 

• AFUDC 
IPM Model – Revisions to Cost and Performance for APC Project No. 12301-007 

Technologies August 20, 2010 

SCR Cost Development Methodology – Final 

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The modules are: 

BMR = Base module SCR cost 

BMF = Base module reagent preparation cost 

BMA = Base module air pre-heater cost 

BMB = Base module balance of plan costs including: ID or booster fans, piping, etc... 

BM = BMR + BMF + BMA + BMB 

The total bare module 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. 

• 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 6% of the 

CECC and owner's costs. The AFUDC is based on a two-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 

of the capital cost estimation. 

Fixed O&M (FOM) 

The fixed operating and maintenance cost is a function of the additional operations staff 

(FOMO) and maintenance labor and materials (FOMM) associated with the SCR 

installation. The FOM is the sum of the FOMO and the FOMM. 
IPM Model – Revisions to Cost and Performance for APC Project No. 12301-007 

Technologies August 20, 2010 

SCR Cost Development Methodology – Final 

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In general, 1 additional operator is required for all installations. The FOMO is based on 

the number of additional operations staff required. 

The fixed maintenance materials and labor is a direct function of the bare module cost 

(BM) at a retrofit factor of 1.0. 

Variable O&M (VOM) 

Variable O&M is a function of catalyst required and disposal costs, reagent consumption, 

and steam consumption. All of the VOM costs must be adjusted for plant capacity factor. 

The reagent consumption rate is a function of unit size, NOx feed rate and removal 

efficiency. The steam usage is based upon reagent consumption rate. 

The power required for the SCR system was not included in the variable O&M costs. 

The power requirements include increased fan power to overcome the added pressure 

drop across the catalyst and ductwork and the reagent supply system. 

The variables that contribute to the overall VOM are: 

VOMR = Variable O&M costs for urea reagent 

VOMW = Variable O&M costs for catalyst replacement & disposal 

VOMM = Variable O&M costs for steam 

VOM = VOMR + VOMW + VOMM. 
IPM Model – Revisions to Cost and Performance for APC Project No. 12301-007 

Technologies August 20, 2010 

SCR Cost Development Methodology – Final 

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Table 1. Example of the Capital Cost Estimate Work Sheet. 
IPM Model – Revisions to Cost and Performance for APC Project No. 12301-007 

Technologies August 20, 2010 

SCR Cost Development Methodology – Final 

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Table 2. Example of the Fixed and Variable O&M Estimate Work Sheet.