UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

REGION 10

1200 Sixth Avenue, Suite 900

Seattle, WA 98101-3140

OFFICE OF

ENVIRONMENTAL ASSESSMENT

October 15, 2012

MEMORANDUM

SUBJECT: Revisions to Healy Unit 1 SCR Cost Effectiveness Calculations

FROM:

Zach Hedg eth, PE

Environmental Engineer, ESU, OEA

TO: Keith Rose, Environmental Scientist

State and Tribal Air Programs Unit, OAWT

Based on comments received during the public comment period on the proposed approval

of the Alaska Regional Haze SIP, I have prepared revised cost effectiveness calculations for

selective catalytic reduction (SCR) as applicable to the Healy Unit 1 coal fired boiler. The

revised calculations are included as Attachment 1 to this memo and reduce the cost

effectiveness to between $5,335 and $5,924/ton. This range is developed based on

specified variability in certain elements of the cost analysis, as detailed below.

As you have requested, I've also included a comprehensive table for NOx controls on Healy

1 which includes cost effectiveness numbers for the control technologies considered within

the BART analysis submitted by Alaska at 8, 10, 15, 20, and 30 year lifetimes. This table

summarizing NOx control technology cost effectiveness is included as Attachment 2 to this

memo.

The primary changes made to the SCR calculations are described below:

1. Annual Operating & Maintenance Cost - Comments were submitted stating that the

annual operating and maintenance (O&M) costs as conducted by previous analyses

do not conform to the methodology outlined in the EPA Control Cost Manual. Based

on additional review of the calculations submitted as part of Alaska's SIP, I see that

the methodology used to calculate the annual O&M costs for SCR installed on Unit 1

were not performed in accordance with the Control Cost Manual. Specifically, the

previous analysis estimated annual O&M costs using an abbreviated method based

on assumptions which were not clearly described and supported. Using information

contained within the various consultant reports (as cited in the attached), I

calculated the annual O&M costs for SCR on Healy 1 using the Control Cost Manual
2 

methodology.		This	reduced	the	estimate	of	annual	O&M	costs	from	$1,125,172	to	

$463,273.	

2. NOX	Emission	Rate	–	The	design	basis	for	SCR	at	Healy	1	has	been	a	75%	reduction	

in	NOX	emissions	from	a	baseline	emission	rate	of	0.28	lb/MMBtu.		This	is	the	origin	

of	the	0.07	lb/MMBtu	NOX	emission	rate	used	in	previous	calculations.		However,	as	

discussed	throughout	the	various	BART	analyses,	the	0.28	lb/MMBtu	boiler	

emission	rate	could	be	reduced	to	0.23	lb/MMBtu	via	optimization	of	the	existing	

low‐	NOX	burner	(LNB)	and	overfire	air	system	for	$20,000	in	capital	costs.		

Applying	this	low	cost	optimization	reduces	the	SCR	inlet	concentration	to	0.23	

lb/MMBtu.		An	SCR	system,	if	designed	to	achieve	a	75%	reduction	in	NOX,	would	

achieve	an	emission	rate	of	less	than	0.058	lb/MMBtu.		Based	on	these	

considerations,	I’ve	conducted	cost	calculations	using	both	the	0.07	and	0.058	

lb/MMBtu	emission	rates	in	order	to	illustrate	the	impact	on	cost	effectiveness.		I	

consider	0.058	lb/MMBtu	to	be	a	reasonably	achievable	emission	rate	based	on	

tiered	implementation	of	the	LNB/overfire	optimization	and	SCR	as	designed.			

Despite	the	information	submitted	in	the	comments,	I	do	not	agree	that	a	more	

stringent	emission	rate,	such	as	that	required	for	other	projects	cited	in	the	

comments,	can	be	considered	in	these	cost	analyses	for	Healy	1.		The	SCR	unit	sized	

and	quoted	for	Healy	1	was	designed	to	achieve	75%	NOX	reduction.		A	more	robust	

SCR	unit	would	be	required	to	achieve	the	lower	emission	rates	cited	in	the	

comments,	and	would	reasonably	be	expected	to	cost	more	than	the	unit	quoted	by	

Fuel	Tech.		Site	specific	cost	information	for	a	more	efficient	SCR	unit	was	not	

provided	by	the	commenters.	

3. Expected	Equipment	Lifetime	–	Based	on	information	submitted	and	cited	within	

the	comments,	I	agree	that	consideration	of	a	30‐year	control	equipment	lifetime	is	

reasonable	for	SCR	on	Healy	1.		I	have	revised	my	calculations	to	reflect	a	30‐year	

lifetime.	

4. New	Induced	Draft	Fan	–	Capital	costs	for	the	SCR	unit	within	the	GVEA	cost	analysis	

included	a	new	1,500	horsepower	(hp)	induced	draft	fan.		This	reflects	an	increase	

of	600	hp	over	the	existing	fan.			GVEA	has	presented	the	fan	replacement	as	

necessary	solely	due	to	the	SCR.		However,	based	on	information	in	the	various	

consultant	reports	(as	cited	in	my	calculations)	and	using	the	methodology	from	the	

Control	Cost	Manual,	I	calculated	an	estimated	SCR	power	usage	of	approximately	

130	hp.		This	includes	consideration	of	additional	system	pressure	drop	introduced	

by	the	SCR	unit	and	is	significantly	less	than	the	increase	in	the	fan	power	output	of	

600	hp.		This	suggests	that	the	remaining	470	hp	of	additional	power	is	required	for	

some	other	reason.		If	any	other	project	is	planned	(made	possible	by	the	increased	

fan	size),	all	capital	costs	associated	with	the	larger	fan	should	be	pro‐rated	

proportionally	between	the	SCR	and	other	projects	based	on	the	newly	introduced	

pressure	loss	to	the	system.		No	explanation	has	been	provided	for	why	the	
3 

installation	of	a	new	SCR	using	about	130	hp	requires	a	fan	that	is	600	hp	more	

powerful.		If	fan	upgrade‐related	costs	are	attributed	proportionately	to	the	hp	with	

cost	multiplied	by	a	factor	of	130/600	attributed	to	SCR,	cost	effectiveness	is	

improved	by	approximately	$300/ton.		Since	it	is	unclear	whether	the	entire	

increase	in	fan	size	is	necessary	solely	due	to	the	new	SCR	unit,	I’ve	conducted	cost	

calculations	using	both	assumptions	in	order	to	illustrate	the	impact	on	cost	

effectiveness.	

5. Interest	Rate	–	Based	on	information	submitted	and	cited	within	the	comments,	I	

agree	that	the	cost	analyses	should	be	conducted	using	an	interest	rate	of	7%,	and	

have	revised	my	calculations	accordingly.	

The	cost	spreadsheet	in	Attachment	1	named	“Low”	is	based	on	assuming	an	emission	rate	

of	0.058	lb/MMBtu	and	pro‐rated	fan	costs.		The	cost	spreadsheet	in	Attachment	1	named	

“High”	is	based	on	assuming	an	emission	rate	of	0.07	lb/MMBtu	with	all	fan	costs	attributed	

to	the	SCR	unit.	

If	you	have	any	questions	about	this	memo,	please	call	me	at	3‐1217.		

Attachments

Attachment	1	........................................................................................	SCR	Cost	Effectiveness	Calculations	

Attachment	2	...................................	NOX	Control	Technologies	Cost	Effectiveness	Summary	Table	

C:	 Mark	Filippini,	Unit	Manager,	ESU,	OEA	

	 Debra	Suzuki,	Unit	Manager,	STAPU,	OAWT	

	 Juliane	Matthews,	ORC	
Attachment 1 ‐ SCR Cost Effectiveness Page 1 of 2

% multiplier Cost Note

Capital Costs

SCR system purchase 13,300,000 $        Fuel Tech

New ID fan purchase 151,667 $             Stan McHugh

New fan motor switchgear 86,667 $                Flint Goodrich

Ductwork baghouse support stiffeners 350,000 $             Flint Goodrich

relocation of existing Unit 1 equipment 300,000 $             Flint Goodrich

optimize LNB & OFA 20,000 $                Enviroplan, 2010, pg 6‐179

project contingency 15% 2,131,250 $          CC Manual

Total Capital Investment Cost (TCIC) 16,339,583 $       

Capital Recovery

Interest rate 7%

Equipment lifetime 30                  

Capital cost recovery factor 0.0806 CC Manual Eq 1.34

Annual Capital cost 1,316,748 $         

EPA (ZTH) ‐‐ Healy 1 SCR ‐‐ "Low"

Annual Costs ‐‐ EPA CC Manual

Annual Maintenance Cost 1.5% 245,094 $             Equation 2.46

Annual Reagent Cost 46,844 $                Equation 2.47

Reagent volume flowrate (gal/hr): 10.9 Equations 2.33 & 2.34

Reagent mass flowrate (lb/hr): 24.1 Equation 2.32

Nox inlet concentration (lb/MMBtu): 0.23 Enviroplan, 2010 pg 7 / pg 6‐74

Coal sulfur content (wt. %): 0.17% CH2M Hill, 2009 pg 2‐2

Flue gas temp at SCR inlet (F): 725 Fuel Tech, 2009

Ammonia slip (ppm): 2 Fuel Tech, 2009

Boiler heat input (MMBtu/hr): 340 CH2M Hill, 2009 pg 2‐1

NH3:Nox typical stoichiometric ratio: 1.05 CC Manual pg 2‐13

MW of NH3 (g/mole): 17.03 CC Manual pg 2‐39

MW of NO2 (g/mole): 46.01 CC Manual pg 2‐39

Capacity Factor (hrs/yr): 8640 Fuel Tech, 2009

Reagent cost ($/gallon): $0.50

Reagent cost ($/ton NH3): 450 $                                   Fuel Tech, 2009

NH3 solution concentration: 29.4% CC Manual page 2‐53

NH3 solution density (lb/ft3): 56 CC Manual page 2‐53

NH3 solution specific volume (gal/ft3): 7.481 CC Manual page 2‐53

Annual Electricity Cost 88,719 $                Equation 2.49

SCR Power Usage (kw): 95.8 Equation Equation 2.48

SCR Power Usage (hp): 128.4

Total pressure drop due to SCR (in w.c.): 5 Fuel Tech, 2009

Cost of power ($/kw): 0.10723 GVEA, 2009

Annual operating hours (hrs/year): 8640 Fuel Tech, 2009

Annualized Catalyst Replacement Cost 67,754 $               

Catalyst replacement cost ($/ft3): 227 $              Fuel Tech, 2009 ‐‐ $8,000/m3

Operating life of catalyst (hrs): 16000 Fuel Tech, 2009

Catalyst term (Y, years): 1.9 CC Manual equation 2‐53

Future Worth Factor (FWF): 0.5 CC Manual equation 2‐52

Catalyst Volume (ft3): 1140.2 CC Manual equation 2‐19

Nox efficiency factor: 1.122 CC Manual equation 2‐20

Nox adjustment factor: 0.926 CC Manual equation 2‐21

Ammonia slip adjustment factor: 1.170 CC Manual equation 2‐22

Sulfur in coal adjustment factor: 0.964 CC Manual equation 2‐23

Temperature adjustment factor: 1.019 CC Manual equation 2‐24

Number of SCR chambers: 1

Total Annual O&M Costs 448,410 $            

Total Annual Costs $          1 765 158 1,765,158

lb/MMBtu

0.28 0 0% 417

0.07 313 75% 104

0.058 331 79% 86

NOX Reduction 331

$/ton of NOX $                  5,335

References

1 CH2M Hill, 2009.  BART Analysis for Healy Power Plant. CH2M Hill, January 2009.

2

3

4 GVEA, 2009.  GVEA Comments attachments submitted to Alaska DEC, 6/15/09.

Enviroplan, 2010.  Final BART Determination Report, Golden Valley Electric Association (GVEA) Best Available Retrofit (BART) Evaluation.  

Enviroplan Consulting, Fairfield, NJ.  Dated January 19, 2010, revised June 1, 2010.

Fuel	Tech,	2009.		Golden Valley Electric Association, Healy Station Unit 1, Conceptual Application of Selective Catalytic

Reduction (SCR) Technology. 		Fuel	Tech,	Inc.		Warrenville,	Illinois.		June,	2009.

Nox Reduced

tpy Nox Emissions tpy

Nox Removal

Efficiency

, , / /
Attachment 1 ‐ SCR Cost Effectiveness Page 2 of 2

% multiplier Cost Note

Capital Costs

SCR system purchase 13,300,000 $        Fuel Tech

New ID fan purchase 700,000 $             Stan McHugh

New fan motor switchgear 400,000 $             Flint Goodrich

Ductwork baghouse support stiffeners 350,000 $             Flint Goodrich

relocation of existing Unit 1 equipment 300,000 $             Flint Goodrich

optimize LNB & OFA 20,000 $                Enviroplan, 2010, pg 6‐179

project contingency 15% 2,260,500 $          CC Manual

Total Capital Investment Cost (TCIC) 17,330,500 $       

Capital Recovery

Interest rate 7%

Equipment lifetime 30                  

Capital cost recovery factor 0.0806 CC Manual Eq 1.34

Annual Capital cost 1 $          ,396,603

EPA (ZTH) ‐‐ Healy 1 SCR ‐‐ "High"

Annual Capital cost $          1,396,603

Annual Costs ‐‐ EPA CC Manual

Annual Maintenance Cost 1.5% 259,958 $             Equation 2.46

Annual Reagent Cost 44,311 $                Equation 2.47

Reagent volume flowrate (gal/hr): 10.4 Equations 2.33 & 2.34

Reagent mass flowrate (lb/hr): 22.8 Equation 2.32

Nox inlet concentration (lb/MMBtu): 0.23 Enviroplan, 2010 pg 7 / pg 6‐74

Coal sulfur content (wt. %): 0.17% CH2M Hill, 2009 pg 2‐2

Flue gas temp at SCR inlet (F): 725 Fuel Tech, 2009

Ammonia slip (ppm): 2 Fuel Tech, 2009

Boiler heat input (MMBtu/hr): 340 CH2M Hill, 2009 pg 2‐1

NH3:Nox typical stoichiometric ratio: 1.05 CC Manual pg 2‐13

MW of NH3 (g/mole): 17.03 CC Manual pg 2‐39

MW of NO2 (g/mole): 46.01 CC Manual pg 2‐39

Capacity Factor (hrs/yr): 8640 Fuel Tech, 2009

Reagent cost ($/gallon): $0.50

Reagent cost ($/ton NH3): 450 $                                   Fuel Tech, 2009

NH3 solution concentration: 29.4% CC Manual page 2‐53

NH3 solution density (lb/ft3): 56 CC Manual page 2‐53

NH3 solution specific volume (gal/ft3): 7.481 CC Manual page 2‐53

Annual Electricity Electricity Cost $               88,393 Equation Equation 2.49

SCR Power Usage (kw): 95.4 Equation 2.48

SCR Power Usage (hp): 127.9

Total pressure drop due to SCR (in w.c.): 5 Fuel Tech, 2009

Cost of power ($/kw): 0.10723 GVEA, 2009

Annual operating hours (hrs/year): 8640 Fuel Tech, 2009

Annualized Catalyst Replacement Cost 65,014 $               

Catalyst replacement cost ($/ft3): 227 $              Fuel Tech, 2009 ‐‐ $8,000/m3

Operating life of catalyst (hrs): 16000 Fuel Tech, 2009

Catalyst term (Y, years): 1.9 CC Manual equation 2‐53

Future Worth Factor (FWF): 0.5 CC Manual equation 2‐52

Catalyst Volume (ft3): 1094.1 CC Manual equation 2‐19

Nox efficiency factor: 1.076 CC Manual equation 2‐20

Nox adjustment factor: 0.926 CC Manual equation 2‐21

Ammonia slip adjustment factor: 1.170 CC Manual equation 2‐22

Sulfur in coal adjustment factor: 0.964 CC Manual equation 2‐23

Temperature adjustment factor: 1.019 CC Manual equation 2‐24

Number of SCR chambers: 1

Total Annual O&M Costs 457,676 $            

Total Annual Costs 1,854,279 $         

lb/MMBtu

0.28 0 0% 417

0.07 313 75% 104

0.07 313 75% 104

NOX Reduction 313

$/ton of NOX $                  5,924

References

1 CH2M Hill, 2009.  BART Analysis for Healy Power Plant. CH2M Hill, January 2009.

2

3

4 GVEA, 2009.  GVEA Comments attachments submitted to Alaska DEC, 6/15/09.

Fuel	Tech,	2009.		Golden Valley Electric Association, Healy Station Unit 1, Conceptual Application of Selective Catalytic

Reduction (SCR) Technology. 		Fuel	Tech,	Inc.		Warrenville,	Illinois.		June,	2009.

Nox Reduced

tpy

Nox Removal

Efficiency Nox Emissions tpy

Enviroplan, 2010.  Final BART Determination Report, Golden Valley Electric Association (GVEA) Best Available Retrofit (BART) Evaluation.  

Enviroplan Consulting, Fairfield, NJ.  Dated January 19, 2010, revised June 1, 2010.
Attachment 2 ‐ NOx Control Technologies Cost Effectiveness Summary Table

NOx Cost Effectiveness Summary Table

Technology 8 years 10 years 15 years 20 years 30 years

Optimize LNB/OFA $45 $38 $30 $26 $22

SNCR @ 0.20 lb/MMBTU $4,606 $4,071 $3,375 $3,047 $2,752

SNCR @ 0.19 lb/MMBTU $4,090 $3,615 $2,998 $2,706 $2,444

ROFA $4,662 $4,071 $3,303 $2,940 $2,615

ROFA/Rotamix $5,711 $5,025 $4,135 $3,714 $3,337

SCR EPA Low $9,625 $8,386 $6,777 $6,016 $5,335

SCR EPA High $10,735 $9,346 $7,541 $6,689 $5,924

$/ton at Varying Equipment Life (7%)