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### UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION 10 1200 Sixth Avenue, Suite 900

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### Seattle, WA 98101-3140 ° 

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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.


## 2Attachment 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 $

SO X Reduction 1,955
$/ton of SO X 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 $

SO X Reduction 1,955
$/ton of SO X 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.