srgr UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

REGION 10

1200 Sixth Avenue, Suite 900

° Ilt ,rc Seattle, WA 98101-3140

September 18, 2013

MEMORANDUM

SUBJECT: Alcoa Wenatchee Works Cost Analysis for Limestone Slurry Forced Oxidation

(LSFO) Scrubbing - Wenatchee, Washington

OFFICE OF

ENVIRONMENTAL ASSESSMENT

FROM:

TO: Steve Body, Environmental Scientist

Air Planning Unit, OAWT

As you requested, I've prepared a cost estimate for a limestone slurry forced oxidation

(LSFO) scrubber to control emissions of sulfur dioxide (SO2) from Potline #5 at Alcoa's

Wenatchee Works primary aluminum smelter. This memo provides a brief description of

the attached calculations.

1. The cost estimate is primarily based on the cost analysis I prepared in 2012 for a

similar scrubber at Alcoa's Intalco Works smelter in Ferndale, WA. The Intalco cost

analysis for LSFO is described in a technical memo dated November 16, 2012 which

was prepared as part of our evaluation of Best Available Retrofit Technology at that

facility.

2. Two primary changes to the Intalco analysis were necessary in order to produce a

cost analysis which reasonable reflects study level costs (± 30%) for a Potline #5

scrubber at the Wenatchee smelter:

a. Certain capital and operating costs were scaled proportionally based on key

size and/or operating parameters. The Potline #5 scrubber would be

approximately one third the size of the Intalco scrubber evaluated in 2012

based on the volumetric flow rate of the exhaust gas requiring treatment. I

believe proportional scaling of costs results in a general underestimate of

costs for the Wenatchee smelter due to economies of scale. Specifically, a

larger scrubber would be expected to cost marginally less per unit of exhaust

gas than a smaller scrubber. Assuming these costs are equal per unit of

exhaust gas likely underestimates the costs associated with the Wenatchee

Potline #5 scrubber.

*

Pflnfed on Aetycfed Paper
b. The capital equipment cost provided by the scrubber manufacturer has been

adjusted to account for inflation over the 7 years that have passed since the

original equipment cost estimates were prepared in 2006. Alcoa provided

information from one equipment vendor that provided a cost estimate in

2006 stating that expected 2013 costs would be 20-25% higher.

Examination of the Chemical Engineering Plant Cost Index (CEPCI) over the

period 2006-2012 suggests an increase of 17% 1 in terms of general chemical

process industry plant costs. Based on this information, my cost analysis

assumes an increase of 20% for the capital equipment cost.

3. Incorporating these adjustments, I estimate the cost effectiveness of LSFO for

Potline #5 at the Wenatchee Works smelter at approximately $7,500 - $8,500 per

ton of S02 removed. Please see the attached spreadsheet for the detailed

calculations.

If you have any questions about these comments, please call me at 3-1217.

C: Mark Filippini, Unit Manager, ESU, OEA

Debra Suzuki, Unit Manager, APU, OAWT

Juliane Matthews, ORC

1 2006 Annual Index = 499.6. 2012 Annual Index = 584.6. 084.6-499.611499.6 = 0.17. The CEPCI is published by

Chemical Engineering Magazine.

2
Attachment Page 1/2

Wenatchee Potline 5 Wet LSFO Scrubber

Zach Hedgpeth, PE

Updated 8/28/2013

% multiplier Cost Note

Capital Costs

Purchased Equipment Costs

capital costs $ 38,728,612

CEMS $ 40,000 one SO2 CEM system

instrumentation 5% $ 1,938,431 scaled back from 10% CC Manual since basic inst is included in proposal

sales tax 8.20% $ 3,179,026 State 6.5% plus local 1.7%

freight 5% $ 1,938,431 CC Manual

PEC $ 45,824,499

Installation Costs

foundations 12% $ 5,498,940

erection 80% $ 36,659,600 Cost manual default is 40%.

electical 1% $ 458,245

piping 30% $ 13,747,350

inslulation 1% $ 458,245

field painting 1% $ 458,245

TIC $ 57,280,624

Indirect Costs

engineering 5% $ 2,291,225 Cost manual 10%, but bid includes some engineering expenses

construction 10% $ 4,582,450

contractor fees 5% $ 2,291,225

start-up 1% $ 458,245

performance test 1% $ 458,245

contingencies 3% $ 1,374,735

aquatic/environmental studies $ 235,000 Assumed similar to Intalco

PUD water connection fee $ 300,000 Assumed similar to Intalco

Total Indirect Cost $ 11,991,125

Total Capital Investment Cost (TCIC) $ 115,096,249

Capital Recovery

Interest rate 7%

Equipment lifetime 30

Capital cost recovery factor 0.0806 Calculated via Equation 1.34 in the EPA CC Manual

Annual Capital cost $ 9,275,193

Annual Costs

Direct Annual Costs

Operating labor

Operator $ 37.00 $ 324,120

Supervisor 15% $ 48,618

Water

Cost $ 0.00070 $/gal Assumed same as Intalco.

Quantity 157,067 Gal/day Scaled from Intalco based on volumetric flowrate.

Annual cost $ 40,131

Limestone usage, tons/yr 4,803.00

Limestone cost/ton $ 33.00

Annual Limestone cost $ 158,499

Compressed air

Plant cost $ 0.24 $/1000 scfm

Quantity 47.12 scfm Scaled from Intalco based on volumetric flowrate.

Annual cost $ 5,944

Gypsum disposal

Generation rate

 9,149 ton/yr

Cost disposal $/ton nonhazardous solid waste, including transportation

Annual cost $ -

Maintenance Labor $ 45.00 $ 211,701

Materials $ 409,316

Elctricity

Required 2,324.59 KWh/hr Scaled from Intalco based on volumetric flowrate.

Cost $ 0.05 $/kWh Assumed same as Intalco.

Total Cost $ 1,071,114

Total Direct Annual costs $ 2,269,442

Indirect Annual Costs

Overhead 60% $ 596,253 CC Manual, section 2.5.5.7

General and Administrative 2% $ 2,301,925 CC Manual, section 2.5.5.7

Property Tax 1% $ 1,150,962 CC Manual, section 2.5.5.7

Insurance 1% $ 1,150,962 CC Manual, section 2.5.5.7

Total Indirect Annual Costs $ 5,200,103

Total Annual O&M Costs $ 7,469,544

Total Annual Costs $ 16,744,737

SOX Reduction 1,955

$/ton of SOX $ 8,566

Cost manual 10%, but assumes scrubber vendor will oversee scrubber 

installation and include in capital of equipment

EPA Region 10 - High

Vendor #1 dual-absorber capital cost, scaled to single absorber cost based on 

Vendor #2, 20% increase for inflation between 2006-2013

Assuming 95% reduction of SO2 PTE scaled proportionally from Intalco based on 

volumetric flowrate.

Scaled from Intalco based on volumetric flowrate.

one full time operator, 3 shifts/day

Scaled from Intalco based on volumetric flowrate.
Attachment Page 2/2

% multiplier Cost Note

Capital Costs

Purchased Equipment Costs

capital costs $ 38,728,612

CEMS $ 40,000 one SO2 CEM system

instrumentation 5% $ 1,938,431 scaled back from 10% CC Manual since basic inst is included in proposal

sales tax 8.20% $ 3,179,026 State 6.5% plus local 1.7%

freight 5% $ 1,938,431 CC Manual

PEC $ 45,824,499

Installation Costs

foundations 12% $ 5,498,940

erection 40% $ 18,329,800 Cost manual default is 40%.

electical 1% $ 458,245

piping 30% $ 13,747,350

inslulation 1% $ 458,245

field painting 1% $ 458,245

TIC $ 38,950,825

Indirect Costs

engineering 5% $ 2,291,225 Cost manual 10%, but bid includes some engineering expenses

construction 10% $ 4,582,450

contractor fees 5% $ 2,291,225

start-up 1% $ 458,245

performance test 1% $ 458,245

contingencies 3% $ 1,374,735

aquatic/environmental studies $ 235,000 Assumed similar to Intalco

PUD water connection fee $ 300,000 Assumed similar to Intalco

Total Indirect Cost $ 11,991,125

Total Capital Investment Cost (TCIC) $ 96,766,449

Capital Recovery

Interest rate 7%

Equipment lifetime 30

Capital cost recovery factor 0.0806 Calculated via Equation 1.34 in the EPA CC Manual

Annual Capital cost $ 7,798,060

Annual Costs

Direct Annual Costs

Operating labor

Operator $ 37.00 $ 324,120

Supervisor 15% $ 48,618

Water

Cost $ 0.00070 $/gal Assumed same as Intalco.

Quantity 157,067 Gal/day Scaled from Intalco based on volumetric flowrate.

Annual cost $ 40,131

Limestone usage, tons/yr 4,803.00

Limestone cost/ton $ 33.00

Annual Limestone cost $ 158,499

Compressed air

Plant cost $ 0.24 $/1000 scfm

Quantity 47.12 scfm Scaled from Intalco based on volumetric flowrate.

Annual cost $ 5,944

Gypsum disposal

Generation rate

 9,149 ton/yr

Cost disposal $/ton nonhazardous solid waste, including transportation

Annual cost $ -

Maintenance Labor $ 45.00 $ 211,701

Materials $ 409,316

Elctricity

Required 2,324.59 KWh/hr Scaled from Intalco based on volumetric flowrate.

Cost $ 0.05 $/kWh Assumed same as Intalco.

Total Cost $ 1,071,114

Total Direct Annual costs $ 2,269,442

Indirect Annual Costs

Overhead 60% $ 596,253 CC Manual, section 2.5.5.7

General and Administrative 2% $ 1,935,329 CC Manual, section 2.5.5.7

Property Tax 1% $ 967,664 CC Manual, section 2.5.5.7

Insurance 1% $ 967,664 CC Manual, section 2.5.5.7

Total Indirect Annual Costs $ 4,466,911

Total Annual O&M Costs $ 6,736,352

Total Annual Costs $ 14,534,412

SOX Reduction 1,955

$/ton of SOX $ 7,436

EPA Region 10 - Low

Vendor #1 dual-absorber capital cost, scaled to single absorber cost based on Vendor #2, 

20% increase for inflation between 2006-2013

Cost manual 10%, but assumes scrubber vendor will oversee scrubber installation and 

include in capital of equipment

one full time operator, 3 shifts/day

Scaled from Intalco based on volumetric flowrate.

Assuming 95% reduction of SO2 PTE scaled proportionally from Intalco based on 

volumetric flowrate.

Scaled from Intalco based on volumetric flowrate.