### IPM Model – Revisions to Cost a nd Performance for APC Technologies

SDA FGD Cost Development Methodology

FINAL

August 2010
Project 12301-007
Perrin Quarles Associates, Inc.

Prepared by

55 East Monroe Street • Ch icago, 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 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.Project No. 12301-007 IPM Model – Revisions to Cost and Performance for APC Technologies August 20, 2010 

### SDA FGD Cost Development Methodology – Final

Page 1 

### Establishment of Cost Basis Cost data for the SDA FGD systems was more li mited than that for the wet FGD systems. A similar trend with generating capacity is genera lly seen between the wet and SDA system. The same generating capacity relationship was used for the wet and SDA cost estimation.

A least squares curve fit of proprietary in-house cost data was defined as a " typical " SDA FGD retrofit for removal of 95% of th e inlet sulfur. It should be noted that the lowest available SO 2 emission guarantees, from the original equipm ent manufactures of SDA FGD systems, are 0.06 lb/MMBtu. The typical SDA FGD retrofit was based on:

• Retrofit Difficulty = 1 (Average retrofit difficulty);

• Gross Heat Rate = 9800 Btu/kWh;

• SO 2 Rate = 2.0 lb/MMBtu;

• Type of Coal = PRB; and

• Project Execution = Multiple lump sum contracts; and

• Recommended SO 2 emission floor = 0.08 lb/MMBtu.

Units below 50 MW will typically not install an SDA FGD system. Sulfur reductions for the small units would be accomplishe d by; treating smaller units at a single site with one SDA FGD system, switching to a lower sulfur coal, repower ing with natural gas, dry sorbent injection, and/or a reduction in operating hours. Capital costs of approximately $800/kW may be used for units below 50 MW under the premise that these will be combined.

Based on the typical SDA FGD performance, the t echnology should not be applied to fuels with more than 3 lb SO 2 /MMBtu and the cost estimator should be limited to fuels with less than 3 lb SO 2 /MMBtu.

An alternate dry technology, circulating dry sc rubber (CDS), can meet removals of 98% or greater over a large range of inle t sulfur concentrations. It sh ould be noted that the lowest SO 2 emission guarantees for a CDS FGD system are 0.04 lb/MMBtu.



### Methodology Inputs Several input variables are required in order to predict future retrof it costs. The gross unit size in MW (equivalent acfm) and sulfur content of th e fuel are the major variables for the capital estimation. A retrofit factor th at equates to difficulty in cons truction of the system must be defined. The costs herein could increase signific antly for congested sites. The unit gross heat rate will factor into the amount of flue gas generated and ultima tely the size of the absorber, reagent preparation, wast e handling, and balance of plant costs. The SO 2 rate will have the greatest influence on the reagent handling and wa ste handling facilities. The type of fuel (Bituminous, PRB, or Lignite) will influence the fl ue gas quantities as a result of the different typical heating values.Project No. 12301-007 IPM Model – Revisions to Cost and Performance for APC Technologies August 20, 2010 

### SDA FGD Cost Development Methodology – Final

Page 2 Outputs Total Project Costs (TPC)
First the base installed costs are calculated fo r each required module (BM_). The base installed costs include:

• All equipment;

• Installation;

• Buildings;

• Foundations;

• Electrical; and

• Average retrofit difficulty. The modules are:

BMR = Base absorber island cost BMF = Base reagent preparation and waste recycle/handling cost

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

BM = BMR + BMF + BMB

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 prem ium, per diem, etc., at 10% of the BM cost; and

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

A capital, engineering, and construc tion cost subtotal (CECC) is established as the sum of the BM and the additional engin eering 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 engine ering, management, and procurement) at 5% of the CECC; and

• Allowance for Funds Used During Constr uction (AFUDC) at 10% of the CECC and owner's costs. The AFUDC is based on a three-year engineer ing and construction cycle.Project No. 12301-007 IPM Model – Revisions to Cost and Performance for APC Technologies August 20, 2010 

### SDA FGD Cost Development Methodology – Final

Page 3 The total project cost is base d on a multiple lump sum contract approach. Should a turnkey engineering procurement constructio n (EPC) contract be executed, th e 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 fina ncing expenditures. Table 1 c ontains an example capital cost estimation.Project No. 12301-007IPM Model – Revisions toCost and Performance forAPC TechnologiesAugust 20, 2010SDA FGD Cost Development Methodology – FinalPage 4Table 1. Example Capital Cost Estimate for the SDA FGD System (Costs are all based on 2009 dollars)Project No. 12301-007 IPM Model – Revisions to Cost and Performance for APC Technologies August 20, 2010 

### SDA 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 SDA FGD installation. The FOM is the sum of the FOMO, FOMM, and FOMA.

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, 8 additional operators ar e required for a SDA FGD system. The FOMO was based on the number of additional operations staff required.

• The fixed maintenance materials and labor is a direct function of the process capital cost (BM).

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

Variable O&M (VOM) Variable O&M is a function of:

• Reagent use and unit costs;

• Waste production and un it disposal costs;

• Additional power required and unit power cost; and

• Makeup water required and unit water cost.

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 func tion of gross unit size, SO 2 feed rate, and removal efficiency. The estimated reagent usage was based on a sulfur removal efficiency of 95% with a flue gas temperature into the SDA FGD of 300°F and an adiabatic approach to satura tion of 30°F. The calcium-to-sulfur stoichiometric ratio varies based on inlet sulfur. The variation in stoichiometric ratio was accounted fo r in the estimation. The economic estimation is only valid up to 3 lb SO 2 /MMBtu inlet. The basis for the lime purity was 90% CaO with the ba lance being inert material.Project No. 12301-007 IPM Model – Revisions to Cost and Performance for APC Technologies August 20, 2010 

### SDA FGD Cost Development Methodology – Final

Page 6 • The waste generation rate is a function of inlet sulfur and calcium to sulfur stoichiometry. Both variables are a ccounted for in the waste generation estimation. The waste disposal rate is based on 10% moisture in the byproduct.

• The additional power required includes increased fan power to account for the added SDA FGD pressure drop. This re quirement 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 ba se 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 (incl uding all benefits) in $/hr.

The variables that contribut e to the overall VOM are:

VOMR = Variable O&M costs for lime 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

The total VOM is the sum of VOMR, VOMW, VOMP, and VOMM. Table 2 contains an example O&M cost estimate, while Table 3 is a complete capital and O&M cost estimate worksheet.Project No. 12301-007IPM Model – Revisions toCost and Performance forAPC TechnologiesAugust 20, 2010SDA FGD Cost Development Methodology – FinalPage 7Table 2. Example O&M Cost Estimate for the SDAFGD System (Costs are all based on 2009 dollars)Project No. 12301-007IPM Model – Revisions toCost and Performance forAPC TechnologiesAugust 20, 2010SDA FGD Cost Development Methodology – FinalPage 8Table 3. Example Complete Cost Estimate for theSDA FGD System (Costs are all based on 2009 dollars)Project No. 12301-007IPM Model – Revisions toCost and Performance forAPC TechnologiesAugust 20, 2010SDA FGD Cost Development Methodology – FinalPage 9