### IPM Model

– Updates to Cost and Performance for APC Technologies

S N CR Cost Development Methodology

Final

March 2013

Project 12847

- 002

Systems Research and Applications Corporation

Prepared by

55 East Monroe Street • Chicago, IL 60603 USA • 31 2

- 269

- 2000LEGAL NOTICE

This analysis ( "

Deliverable " ) was prepared by Sargent & Lundy, L.L.C. ( " S&L " ), expressly for the sole use

of Systems Research and Applications Corporation ("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, budg etary 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 by the U.S. Enviro nmental Protection Agency and reviewed by William A. Stevens,

Senior Advisor

– Power Technologies.IPM Model

– Updates to Cost and Performance for

APC Technologies Project No. 12847

- 002

March 2013



### S N CR Cost Development Methodology

1 

### Establishment of Cost Basis

The formulation of the S N CR cost estimating model is based upon a proprietary Sargent & Lundy LLC (S&L) in

- house data ba se of recent ( 2009 to 2012 ) 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 cy clone boilers, T

- fired and wall fired systems with multiple levels of injection . The cyclone boiler costs inclu de rich reagent injection (RRI). The data was the basis for the cost estimate formulations developed.

The S&L data was fitted with a least sq uares curve to establish the trend in $/kW as a function of gross MW. The SNCR cost model parameters were adjusted to account for market changes and escalatio n, and then the model output was compared to the S&L data.

The model output follow ed a $/kW corr elation 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 activitie s. The smaller power plants also tend to have older control systems that may require upgrades to accommodate the new SNCR control system.

The S&L data include s S N CR projects with various types of boilers, coals, sulfur levels and retrofit complexities. The typical SNCR retrofit was based on :

Retrofit Difficulty = 1 (Averag e retrofit difficulty);

Gross Heat Rate = 9800 Btu/kWh ;
SO 2 Rate = < 3 lb/ MMBtu; Type of Coal = PRB ; and Project Execution = Multiple lump sum contracts

.



### Methodology

Inputs

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

and NOx levels are the major variable s for the capital cost estimation followed by the type of fuel. The fuel type affect s the air pre

- heater costs if sulfuric acid or ammonium

bisulfate deposition poses a problem

. In general, if the level of S O 2 is above 3

lb/ MM Btu, it is assumed that air heater modifications will be required. The unit heat rate

factor s into the amount of NOx generated and ultimately the size of the S NCR reagentIPM Model

– Updates to Cost and Performance for

APC Technologies Project No. 12847

- 002

March 2013



### S N CR Cost Development Methodology

2 preparation system

. A retrofit factor that equates to difficulty in construction of the system must be defined. The N O

x rate and removal efficiency will impact the amount of

urea required and size of the reagent handling equipment

. Finally, the boiler type will

influence the capital costs of the SNCR system and balan ce of plant considerations. It should be noted that water treatment facility for dilution water may not be required for small units which may lower the overall capital cost.

The cost methodology is based on a unit located within 500 feet of sea level. Th e actual elevation of the site should be considered separately and factored into the cost due to the effects on the flue gas volume. The base SNCR costs are directly impacted by the site

elevation. This base cost module should be increased based on the r atio of the atmospheric pressure between sea level and the unit location. As an example, a unit located 1 mile above sea level would have an approximate atmospheric pressure of 12.2 psia. Therefore, the base SNCR cost should be increased by:

14.7 psia/ 12.2 psia = 1.2 multiplier to the base SNCR cost

Outputs

Total Project Costs (TPC)

First the installed costs are calculated for each required base module. The base module

installed costs include:

All equipment;

Installation ; Buildings ;
Foundations ;
Elec trical ; Water treatment for the dilution water; and

R etrofit difficulty.

The base modules are:

BM S = Base SNCR system

BM A = Base air heater modifications, as required

BMB = Base balance of plan t costs including: piping, s ite u pgrades, water treatmen t for the

dilution water, etc...

BM = BM S + BM A + BMBIPM Model

– Updates to Cost and Performance for

APC Technologies Project No. 12847

- 002

March 2013



### S N CR Cost Development Methodology

3 The total base module 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 premium, per diem, etc., a t 10% of the BM cost; and Contractor profit and fees at 10% of the BM cost.

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

Additional costs and finan cing expenditures for the project are computed based on the CECC. Financing and additional project costs include:

Owner's home office costs (owner's engineering, management, and procurement) at 5% of the CECC; and Allowance for Funds Used During Construc tion (AFUDC) at 0 % of the

CECC and owner’s costs as these projects are expected to be completed in less than a year after the equipment is released for the fabrication

.

The total project cost is based on a multiple lump sum contract approach. Should a

tu rnkey engineering procurement construction (EPC) contract be executed, the total project cost c ould 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 financing expenditures.

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 w ith the SNCR installation. The FOM is the sum of the FOMO, FOMM, and FOMA.IPM Model

– Updates to Cost and Performance for

APC Technologies Project No. 12847

- 002

March 2013



### S N CR Cost Development Methodology

4 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, 0 additional operat or s are required a new SNCR system

.

The fixed maintenance materials and labor is a direct function of the process capital cost at 1.2% of the BM

.

The administrative labor is a function of the FOMO and FOMM at 3% of (FOMO + 0.4FOMM)

.

Variable O&M (VOM)

V ariable O&M is a function of :

Reagent use and unit costs;

Dilution water required and unit water cost ; Additional power required and unit power cost ; and Boiler efficiency reduction due to the added water in the boiler and unit replacement coal 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 function of the amount of NOx removed, NOx inlet rate, and boiler type. A utilization fac tor (UF) 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 util ization factor of 25% is

used.

The dilution water usage is based on creating a 5% dilute rea gent stream for injection into the boiler

.

The additional power required includes compressed air or blower requirements for the urea injection system and the reagent supply system.

The additional power is reported as a percent of the total unit gross

pro duction. In addition, a cost associated with the additional power requirements can be included in the total variable costs.IPM Model

– Updates to Cost and Performance for

APC Technologies Project No. 12847

- 002

March 2013



### S N CR Cost Development Methodology

5 Impacts on the unit heat rate due to injection of liquid water into the boiler are accounted for by additional coal costs to provi de added boiler heat input and

can be included in the total variable costs

.

Input options are provided for the user to adjust the variable O&M costs per unit. Average default values are included in the base estimate. The variable O&M costs per unit opti ons are:

Urea cost for a 50% by weight solution in $/ton; Auxiliary power cost in $/kWh;

Dilution water cost in $/1000 gallon ; Operating labor rate (including all benefits) in $/hr ; and Replacement coal cost in $/MMBtu.

The variables that contribute to t he overall VOM are:

VOMR = Variable O&M costs for urea reagent

VOMM = Variable O&M costs for dilution water

VOMP = Variable O&M costs for additional auxiliary power

VOM B = Variable O&M costs for additional coal

The total VOM is the sum of VOMR, VOM M

, VOMP, and VOM B . Table 1 shows a complete capital and O&M cost estimate worksheet for an SNCR on a T

- fired boiler

. Table 2 shows a complete capital and O&M cost estimate worksheet for an SNCR on a

CFB boiler

.IPM Model

– Updates to Cost and Performance for APC Technologies Project No. 12847

- 002

March 2013



### SNCR Cost Development Methodolog y

6 Table 1. Example Complete Cost Estimate f or an SNCR System Installed on a T

- fired boilerIPM Model

– Updates to Cost and Performance for APC Technologies Project No. 12847

- 002

March 2013



### SNCR Cost Development Methodolog y

7IPM Model

– Updates to Cost and Performance for APC Technologies Project No. 12847

- 002

March 2013



### SNCR Cost Development Methodolog y

8 Table 2. Example Complete Cost Estimate for an SNCR System Installed on a CFB boilerIPM Model

– Updates to Cost and Performance for APC Technologies Project No. 12847

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March 2013



### SNCR Cost Development Methodolog y

9