IPM Model – Updates to Cost and Performance for APC Technologies

SNCR Cost Development Methodology

Final

March 2013

Project 12847-002

Systems Research and Applications Corporation

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 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, 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 by the U.S. Environmental 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

SNCR Cost Development Methodology

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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 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 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 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 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 that 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 typical SNCR retrofit was based on:

Retrofit Difficulty = 1 (Average retrofit difficulty);

Gross Heat Rate = 9800 Btu/kWh;

SO2 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 size in MW 

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

type of fuel. 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 SNCR reagent 
IPM Model – Updates to Cost and Performance for 

APC Technologies

Project No. 12847-002

March 2013

SNCR Cost Development Methodology

2

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. Finally, the boiler type will

influence the capital costs of the SNCR system and balance 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. The 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 ratio 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;

Electrical; 

Water treatment for the dilution water; and

Retrofit difficulty.

The base modules are:

BMS = Base SNCR system

BMA = Base air heater modifications, as required

BMB = Base balance of plant costs including: piping, site upgrades, water treatment for the 

dilution water, etc...

BM = BMS + BMA + BMB
IPM Model – Updates to Cost and Performance for 

APC Technologies

Project No. 12847-002

March 2013

SNCR Cost Development Methodology

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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., at 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 financing 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 Construction (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 

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 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 with 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

SNCR Cost Development Methodology

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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 operators 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)

Variable 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 factor (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 utilization factor of 25% is 

used.

The dilution water usage is based on creating a 5% dilute reagent 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 

production. 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

SNCR Cost Development Methodology

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Impacts on the unit heat rate due to injection of liquid water into the boiler are 

accounted for by additional coal costs to provide 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 options 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 the 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

VOMB = Variable O&M costs for additional coal

The total VOM is the sum of VOMR, VOMM, VOMP, and VOMB. 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 Methodology

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Table 1. Example Complete Cost Estimate for an SNCR System Installed on a T-fired boiler
IPM Model – Updates to Cost and Performance for APC Technologies Project No. 12847-002

March 2013

SNCR Cost Development Methodology

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IPM Model – Updates to Cost and Performance for APC Technologies Project No. 12847-002

March 2013

SNCR Cost Development Methodology

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Table 2. Example Complete Cost Estimate for an SNCR System Installed on a CFB boiler
IPM Model – Updates to Cost and Performance for APC Technologies Project No. 12847-002

March 2013

SNCR Cost Development Methodology

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