IPM Model – Revisions to Cost and Performance for APC Technologies

SNCR 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

SNCR Cost Development Methodology – Final 

1 

Establishment of Cost Basis 

The formulation of the SNCR cost estimating model is based upon a proprietary Sargent 

& Lundy LLC (S&L) in-house data base of recent (2009) quotes for both lump sum 

contracts and EPC. The S&L data was analyzed in detail regarding project specifics such 

as coal type, boiler type, and NOx reduction efficiency. The S&L in-house data includes 

projects that involved cyclone boilers, T-fired and wall fired systems with multiple levels 

of injection. The cyclone boiler costs include rich reagent injection (RRI). The data was 

the basis for the cost estimate formulations developed. 

The S&L data was fitted with a least squares curve to establish the trend in $/kW as a 

function of gross MW. The EPA/IPM SNCR cost model parameters were adjusted to 

account for market changes and escalation, and then the model output was compared to 

the S&L data. The EPA/IPM model output followed a $/kW correlation very similar to 

the S&L in-house data, once the adjustments were made to the model. 

The rapid rise in project costs at the lower end of the MW range is due primarily to 

economies of scale. Additionally, older power plants in the 50 MW range tend to have 

plant sites that are more compact and therefore difficult to accommodate the reagent 

storage areas and piping, injection mixing/dilution equipment and construction activities. 

The smaller power plants also tend to have older control systems which may require 

upgrades to accommodate the new SNCR control system. 

The S&L data includes SNCR projects with various types of boilers, coals, sulfur levels 

and retrofit complexities. The data represents an average of boiler effects, such as 

cyclone, wall fired or CFB. The least squares curve fits were based upon the following 

assumptions: 

• Retrofit Factor =1 

• Gross Heat Rate = 10,000 

• SO2 Rate = < 3 lb/MMBtu 

• Type of Coal = PRB 

• Project Execution = Multiple lump sum contracts 

Methodology 

Inputs 

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

and NOx levels are the major variables for the capital cost estimation followed by the 

type of fuel (high sulfur Bituminous). The fuel type affects the air pre-heater costs if 

sulfuric acid or ammonium bisulfate deposition poses a problem. In general, if the level 

of SO2 is above 3 lb/MMBtu, it is assumed that air heater modifications will be required. 

The unit heat rate factors into the amount of NOx generated and ultimately the size of the 
IPM Model – Revisions to Cost and Performance for Project No. 12301-007 

APC Technologies August 20, 2010

SNCR Cost Development Methodology – Final 

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SNCR reagent preparation system. 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 urea required and size of the reagent handling equipment. 

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 

reagent and dilution water costs. 

Outputs 

Total Project Costs (TPC) 

The base module costs are calculated for each required module (BM). The base module 

costs include: 

• Equipment; 

• Installation; 

• Buildings; 

• Foundations; 

• Electrical; and 

• Retrofit factor. 

The base module costs do not include: 

• Engineering and Construction Management 

• Owner's cost; and 

• AFUDC. 

The base modules are: 

BMS = Base module SNCR cost. 

BMA = Base module air pre-heater cost. 

BMB = Base module balance of plant costs including: piping, electrical, site 

upgrades, etc... 

BM = BMS + BMA + BMB 

The total base module cost (BM) is 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. 
IPM Model – Revisions to Cost and Performance for Project No. 12301-007 

APC Technologies August 20, 2010

SNCR Cost Development Methodology – Final 

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

the BM and the additional engineering and construction fees. 

Additional expenditures for the project are computed based on the CECC. The additional 

project costs include: 

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

procurement) at 5% of the CECC. 

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 Owner’s home office costs. An example of the capital cost estimation is 

included in Table 1. 

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 SNCR 

installation. The FOM is the sum of the FOMO and the FOMM. 

The following factors and assumptions underlie calculations of the FOM: 

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

based on the number of additional operations staff required; and 

• The fixed costs for maintenance materials and labor are a direct function of the 

base module cost (BM) at a retrofit factor of 1.0. 

Variable O&M (VOM) 

Variable O&M is a function of: 

• Reagent consumption; 

• Dilution water consumption. 

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

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

efficiency. A utilization factor of 15% is used for units with an inlet NOx of 0.3 

lb/MMBtu or lower and 25% for units with an inlet NOx greater than 0.3 lb/MMBtu. For 

CFB boilers a utilization factor of 25% is used. A reagent cost of $620 per ton of 100% 
IPM Model – Revisions to Cost and Performance for Project No. 12301-007 

APC Technologies August 20, 2010

SNCR Cost Development Methodology – Final 

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urea is used in the model. The dilution water usage is based upon reagent consumption 

rate. 

The auxiliary power required for the SNCR system is not included in the VOM. The 

major systems that impact the power requirements are compressed air or blower 

requirements for the urea injection system and the reagent supply system. 

The variables that contribute to the overall VOM are: 

VOMR = Variable O&M costs for urea reagent. 

VOMM = Variable O&M costs for dilution water. 

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

APC Technologies August 20, 2010

SNCR Cost Development Methodology – Final 

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

APC Technologies August 20, 2010

SNCR Cost Development Methodology – Final 

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Table 2. Example of the Fixed and Variable O&M Cost Estimate Work Sheet (for T-fired b
IPM Model – Revisions to Cost and Performance for Project No. 12301-007 

APC Technologies August 20, 2010

SNCR Cost Development Methodology – Final 

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Table 3. Example of the Capital Cost Estimate Work Sheet (for CFB boilers). 
IPM Model – Revisions to Cost and Performance for Project No. 12301-007 

APC Technologies August 20, 2010

SNCR Cost Development Methodology – Final 

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Table 4. Example of the Fixed and Variable O&M Cost Estimate Work Sheet (for CFB bo