### IPM Model

– Updates to Cost and Performance for APC Technologies

Wet FGD Cost Development Methodology

Final

March 201 3

Project 12847

- 002

Systems Research and Applications Corporation

Prepared by

55 East Monroe Street • Chicago, IL 60603 USA • 312

- 269

- 2000LEGAL NOTICE

This analysis ( "

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

of Systems Research and Applications Corporation ( " Client " ) in accordance with the agreement between

S&L and C lient. 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 d ata,

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 by the U.S. Environmenta l Protection Agency and reviewed by William A. Stevens,

Senior Advisor

– Power Technologies

.IPM Model

– Updates to Cost and Performance for

APC Technologies Project No. 12847

- 002

March 2013



### Wet FGD Cost Development Methodology

Page 1 

### Establishment of Cost Basis

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

and L adco ' s FGD and SCR C apacity and C ost A ssum ptions in the E valuation of

P roposed EGU 1 and EGU 2 E mission C ontrols " prepared for Midwest Ozone Group (MOG) were used by Sargent & Lundy LLC (S&L) to develop the wet FGD cost model

. In addition, S&L included data from “Current Capital Cost and Cost

- eff ectiveness of Power Plant Emissions Control Technologies” prepared by J. E. Cichanowicz for the Utility Air Regulatory Group (UARG) in 2010. The cost increases reported from 2007 to 2008 by G. W. Sharp in “Update: What’s That Scrubber Going to Cost?” publ ished in Power Magazine, March 2009 were also considered. The published data was significantly augmented by the S&L in

- house database of recent wet FGD projects.

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

Escala tion based on the CEPI was deemed acceptable. All data sources were combined so as to provide a representative wet FGD cost basis.

The data was converted to 2012 dollars based on the Chemical Engineering Plant Index (CEPI) data. Additional proprietary S &L in

- house data from 2007 to 2012 were included to confirm the index validity. Finally, the cost estimation tool was benchmarked against recent wet FGD projects to confirm the applicability to the current 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 SO 2 emission guarantees , from the original equipment manufacturers of wet FGD system s, are 0.04 lb/MMBtu. The typ ical wet FGD retrofit was based on:

Retrofit Difficulty =1 ( Average retrofit difficulty) ;
Gross H eat Rate = 9 5 00 Btu/kWh ;
SO 2 Rate = 3 .0 lb/MMBtu ; Type of Coal = Bit uminous ; Project Execution = Multiple lump sum contracts ; and

Recommended SO 2 emission flo or = 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 or conversion to natural

gas firing , dry sorbent injection, and/or a reduction in operating hours. Capital costs of approximately $ 9 00 /kW may be used for units below 100 MW under the premise that

these will be combined.IPM Model

– Updates to Cost and Performance for

APC Technologies Project No. 12847

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March 2013



### Wet FGD Cost Development Methodology

Page 2 

### Metho dology

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 variable s 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 ultimate ly the size of the absorber, reagent prep aration, waste handling, and balance of plant costs.

The SO 2 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 r esult 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.

The cost methodology is based on a unit located within 500 feet of sea level. The ac tual elevation of the site should be considered separately and factored into the cost due to the effects on the flue gas volume. The base absorber island and balance of plant costs are directly impacted by the site elevation. These two base cost modules should be increased based on the ratio of the atmospheric pressure between sea level and the unit location. As an example, a unit located 1 mile above sea level would have an approximate atmospheric pressure of 12.2 psia. Therefore, the base absorber isl and and balance of plant costs should be increased by:

14.7 psia/12.2 psia = 1.2 multiplier to the base absorber island and balance of plant costs

Outputs

Total Project Costs (TPC)

First the installed costs are calculated for each required base module

. The base module

installed costs include:

All equipment ;
Installation ; Buildings ;
Foundations ;
Electrical ;IPM Model

– Updates to Cost and Performance for

APC Technologies Project No. 12847

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March 2013



### Wet FGD Cost Development Methodology

Page 3 Minor physical and chemical wastewater treatment (WWT) ; and

R etrofit d ifficulty

.

The base modules are:

BMR = Base absorber island cost

BMF = Bas e reagent preparation cost

BMW = Base waste handling cost

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

ductwork and reinforcement

, minor WWT, etc

...

BMWW = Base wastewater treatment facility for future use.

BM = BMR + BMF + BMW + BMB + BMWW

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

Engineering and c onstruction management costs at 10% of the BM cost ; Labor adjustment for 6 x 10 ho ur 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% o f the

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

- year eng ineering 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 execut ed, the total project cost could be 10 to 15% higher than what is currently estimated.

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

CECC and the additional costs and financing expenditures

.IPM Model

– Updates to Cost and Performance for

APC Technologies Project No. 12847

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March 2013



### Wet FGD Cost Development Methodology

Page 4 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 a nd 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 shift operators are required for a 500 MW or smaller

installation. Unit s larger than 500 MW require a to tal of 16 additional shift 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 at 1.5% of the BM

.

The administrative labor is a function of the FOMO and FOMM at 3% of (FOMO + 0.4FOMM)

.

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 ; Makeup water required and unit water cost ; and

Future variable O&M cost category is included to account for an extensive wastewater treatment facility

.IPM Model

– Updates to Cost and Performance for

APC Technologies Project No. 12847

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March 2013



### Wet FGD Cost Development Methodology

Page 5 The following factors and assumptions underlie calculations of the VOM:

All of the VOM costs wer e tabulated on a per megawatt

- hour (MWh) basis

.

The reagent usage is a function of gross unit size, SO 2 feed rate, and removal efficiency. While the capital costs are based on a 98% sulfur removal design, the operating sulfur removal percentage can be ad justed to reflect actual variable operating costs.

A calcium

- to

- sulfur stoichiometric ratio of 1.03 was used as the basis for the

reagent use rate

. In addition, a limestone purity of 90% CaCO 3 with the balance being inert material was defined to establi sh the total reagent feed

rate

.

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. Th is requirement is a function of gross unit size (actual gas flow rate) and sulfur rate.

The additional power is reported as a percent of the total unit gross production. In addition, a cost associated with the additional power requireme nts can be included in the total variable costs.

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

and sulfur feed rate.

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 (V OMWW) is not estimated and is included at zero dollars.IPM Model

– Updates to Cost and Performance for

APC Technologies Project No. 12847

- 002

March 2013



### Wet FGD Cost Development Methodology

Page 6 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

.

The variables that cont ribute 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

The total VOM is the sum of VOMR, VOMW, VOMP, VOMM, and VOMWW. Table 1 is a complete capital and O&M cost estimate worksheet

.IPM Model

– Updates to Cost and Performance for A PC Technologies Project No. 12847

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March 2013



### Wet FGD Cost Development Methodology

Page 7 Table 1 . Example Complete Cost Estimate for the W et FGD SystemIPM Model

– Updates to Cost and Performance for A PC Technologies Project No. 12847

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March 2013



### Wet FGD Cost Development Methodology

Page 8