United States Environmental Protection Agency Industrial Environmental Research Laboratory Research Triangle Park NC 27711 Research and Development EPA-600/S2-82-070 Dec. 1982 Project Summary Acid Rain Mitigation Study: Volumes I and II. J. G. Ball and W. R. Menzies The U.S. EPA has initiated a multi- phased study of the acid rain problem. As part of Phase I, Radian Corporation investigated SO2 emissions and con- trols in the industrial sector. The primary objective of this work was to provide a consistent set of capital investment and operating costs for flue gas desulfurization (FGD) sys- tems applied to both industrial and electric utility boilers. Retrofit factors and the cost of FGD systems applied to new boilers were addressed. Wet limestone scrubbing and lime spray drying FGD systems were evaluated. In conducting the work to provide a consistent set of capital investment and operating costs for FGD systems retrofitted to existing boilers, the following issues were investigated: Apparent discontinuities in both FGD system capital investment and operating costs as a func- tion of boiler capacity in the region between industrial boil- ers and small utility boilers. FGD retrofit factors applied to existing boilers based on published reports. Differences between PEDCo Environmental, Inc. and TVA cost estimates for utility boiler FGD systems. These costing issues were examined on the bases of design scope, costing factors (for equipment installation, indirect investment, etc.), year of costs, inherent strengths and weak- nesses, and published data of actual system costs. Recommendations are made for the cost bases to use in further acid rain studies. This Project Summary was devel- oped by EPA '$ Industrial Environmen- tal Research Laboratory, Research Triangle Park, NC, to announce key findings of the research project that is fully documented in a separate report of the same title (see Project Report ordering information at back). Introduction There is a growing concern about the acidity of precipitation in the north- eastern United States and Canada. Many scientists think that acidic precip- itation kills aquatic and plant life, damages crop-growing soil, and accel- erates erosion and damage to buildings. Although the mechanisms producing acid rain are not clearly understood, sulfur dioxide (S02) and oxides of nitrogen (NOX) are thought to be the precursors of the chemicals that cause acid rain. Large quantities of SO2 and NOx are produced by various combus- tion and non-combustion processes in both the utility and industrial sectors. Reducing these S02 and NOX emissions to the atmosphere should reduce the potential for acid rain. Because this concern is increasing, the U.S. EPA initiated a multi-phased study of the acid rain problem. As one part of Phase I, Radian Corporation investigated SOa emissions and con- trols in the industrial sector; Teknekron, Inc. made a similar study of the utility sector. The results of these studies would provide direction for additional phases. The objectives of the later phases are to investigate S02 sources in more detail than Phase I, to investigate ------- NOx sources, and to model source/ receptor relationships. In support of the Phase I efforts, Radian Corporation was asked to provide a consistent set of capital investment and operating costs for flue gas desulfunzation (FGD) systems applied to both industrial and electric utility boilers. Since existing S02 sources are the primary targets for reducing the impacts of acid rain, retrofit factors as well as the cost for FGD systems applied to new boilers were addressed This report summar- izes the results of that cost work. The cost estimates used as the basis for this study are: Utility boiler FGD systems by TVA and PEDCo Environmental, Inc. Industrial boiler FGD systems by Radian Corporation. Wet limestone scrubbing and lime spray drying FGD systems were evaluated. The U S EPA has recognized that there appear to be discrepancies in these published cost estimates in two areas: Utility boiler limestone FGD sys- tem costs prepared by TVA and PEDCo Environmental, Inc. FGD system costs in the capacity transition from industrial boilers to small utility boilers. To achieve the primary objective of the study (provide a consistent set of capital investment and operating costs for FGD systems retrofitted to existing boilers), the following issues were investigated' Apparent discontinuities in both FGD system capital investment and operating costs as a function of boiler capacity in the region between industrial boilers and small utility boilers. FGD retrofit factors applied to existing boilers based on pub- lished reports. The differences between PEDCo Environmental, Inc. and TVA cost estimates for utility boiler FGD systems. The above costing issues are exam- ined on the bases of design scope, costing factors (for equipment installa- tion, indirect investment, etc.), year of costs, inherent strengths and weak- nesses, and published data of actual system costs Recommendations are made for the cost bases to use in further acid rain studies. Summary of Results The results of the investigations of each issue are summarized below. Utility and Industrial Boiler FGD System Costs Significant discontinuities in both the FGD system capital investment and operating cost areas as a function of boiler capacity have been observed in the capacity transition from industrial to small utility boiler systems. This study attempts to determine the causes of these discontinuities and to provide a consistent set of costs (capital and operating) for both types of FGD systems applied to new boilers. Cost estimates by TVA (for utility boilers) and Radian Corporation (for industrial boilers) were used for this analysis since these estimates are current and well-documented. In order to properly compare the TVA and Radian estimates, the costs were adjusted to the same economic and technical bases, which include: Identical design scope. Same year of construction basis. Same indirect investment algo- rithm basis. Same unit cost basis for labor, raw materials, utilities, etc. In addition, major components of industrial boiler FGD systems are usually shop-fabricated whereas utility systems are field-erected. The capital and operating costs developed after accounting for the differences de- scribed above were compared to deter- mine if the discontinuities were real or a result of inaccuracies in one or both sets of cost data. Wet limestone scrubbing and lime spray drying FGD systems are the only processes evaluated in this study. For electric utility plants, wet lime and limestone systems dominate the oper- ating units; wet lime/limestone scrub- bing and lime spray drying processes are the prevalent systems being planned for future facilities. For industrial boilers, dual alkali and sodium (once- through) systems dominate operating and planned units, although spray drying systems are beginning to be applied. The dual alkali is more typical of the FGD system that will be applied to large industrial boilers Sodium (once- through) will most likely be applied to small boilers where the high TDS (total dissolved solids) liquid waste can be easily disposed of (such as on steam generators used in oil field injection where the liquid waste can be disposed of by well injection or in evaporation ponds) To simplify the basis of this and other studies, only the wet lime/limestone FGD costs are recommended for use in developing cost impacts of FGD con- trol for acid ram mitigation. The reasons for this recommendation are: The capital and operating costsfor wet limestone and dual alkali FGD systems are comparable for in- dustrial boiler FGD applications over the capacity range of 30 - 200 x 106 Btu/hr. boiler heat input. Due to the large amounts of data on existing utility boiler FGD systems, the cost estimates for limestone systems should be more accurate than for lime spray dryer systems. In addition, the cost estimates supplied by TVA for utility boiler spray dryer FGD systems were preliminary and had not been finalized prior to completing this report. Only the costs for wet limestone FGD systems are presented and discussed in this summary. However, the analysis of spray drying in the report points out the major factors that affect the costs for these systems. The capital and annual first year operating and maintenance (O&M)* costs for FGD systems applied to new industrial boilers are derived from the cost data developed by Radian Corpora- tion. These costs are for limestone FGD systems, however, Radian found that dual alkali and limestone FGD costs were comparable (within 10 percent)for the capacity range evaluated. These cost data are part of the background information document which was developed to support new source performance standards for industrial boilers. Table 1 presents a complete breakdown of the capital investment costs (1980 dollars) for FGD systems applied to new industrial boilers ranging in capacity from 30 to 200 million Btu per hour. Table 2 shows the first year O&M costs for those same FGD systems These costs are recommended for use in the acid rain study. TVA has performed a similar cost analysis for limestone FGD systems applied to new utility boilers Their costing work is part of an on-going Includes raw materials, labor, maintenance, utilities, solid waste disposal (if applicable), and overhead Does not include capital-related costs such as depreciation, income taxes, interest, and return-on equity ------- Table 1. Industrial Boiler Limestone FGD System Capital Investment Boiler Heat Input Capacity, 706 Btu/hr Direct Investment Raw Materials Handling SOz Scrubbing Fans Solids Separation Utilities & Service Total Direct Investment (TDI) Indirect Investment Engineering Construction & Field Expense Construction Fees Start-up Performance Test Total Indirect Investment (Til) Contingencies Total Turnkey Investment (TTI) Land Working Capital Total Cap. Investment (TCI} 1978$ TCI x 1.21 = 7350$ TCI (1980$) 103$/106 Btu/hr Capital Investment*, 103 $ 30 59 149 20 160 23 -477 98 41 41 8 4 -192 121 ~724 0.6 52 777 940 31.3 75 99 244 40 189 34 ~~665 98 61 61 12 6 238 169 1073 0.8 72 1.086 1,314 17.5 150 147 368 69 227 49 ~860 98 86 86 17 9 296 231 1357 1 106 1.494 1,808 12.1 200 171 401 76 275 55 ~sn 98 98 98 19 10 ~32~3 260 T$6J 1 126 1.688 2.042 10.2 program to develop detailed and accu- rate costs for utility-sized FGD systems. Table 3 presents the capital investment costs; Table 4 shows the first year annual O&M costs. These costs are also recommended for use in the acid ram study. The industrial and utility boiler FGD system capital investments, shown in Tables 1 and 3, respectively, should exhibit some discontinuity in the capacity transition from large industrial boilers to small utility boilers due to: 1. Design scope Utility Boiler *Bases given in Tables 2.1.2-4 and 2.1.2-5 of full report. Includes spare absorber modules, stack gas reheat, and on-site sludge disposal pond Industrial Boiler Does not include spare absorbers, stack gas reheat, or an on-site pond 2. Method of installation Table 2. Industrial Boiler Limestone FGD System First Year Operating and Maintenance Costs Boiler Heat Input Capacity. 106 Btu/hr Direct Costs Raw Material Limestone Conversion Costs Operating Labor Supervision Utilities Process Water Power Maintenance Labor & Materials Solid Waste Disposal TOTAL DIRECT COSTS Indirect Costs Payroll Overhead Plant Overhead G&A TOTAL INDIRECT COSTS Total First Year O&M, 1978$ 1981 $ (1978$ x 1.285) $/10* Btu{1978$) $/10e Btu (1981$) Annual 30 10 105 21 0.2 7 33 28 ~2~04~ 38 40 31 ~JOS 313 402 1.99 2.56 O&M Cost,* 103 75 24 105 21 0.7 18 48 71 ~~2~55 38 44 43 -J75 413 531 1.05 1.35 $/yr (1978$) 150 49 105 21 1 36 68 143 ~32~3~ 38 48 60 -TUB 569 731 0.72 0.33 200 65 105 21 2 42 78 190 ~W5 38 50 68 ~T56 659 847 0.63 0.81 Utility Boiler Field-erection Industrial Boiler Shop-fabrication of major components . Indirect investment plus other capital requirements Utility Boiler a eases given in Tables 2.1.2-4, 2.1.2-5, and 2.1.3-3 of full report. 1.0 times direct investment Industrial Boiler ~0.75 times direct investment The analyses performed in this report illustrate that the three items listed above account for most of the discontinuity in the capital investment costs. As with the capital investment costs, the industrial and utility boiler annual O&M costs presented in Tables 2 and 4, respectively, are also likely to exhibit some discontinuity due to: ------- Table 3. Utility Boiler Limestone FGD System Capital Investment (1980$) Capital Investment* JO3 $ Utility Boiler Capacity M We Boiler Heat Input* (106 Btu/hr) Direct Investment Raw Materials Handling SOt Scrubbing Waste Disposal Total Direct Investment (TDI) Indirect Investment (II) Engr. Design & Supv. plus Architectural & Engr. (A&E} Construction Expenses Contractor Fees Contingency Fixed Investment (TDI + II) Other Capital Requirements Start-up & Modifications Interest During Construction Land Working Capital Total Capital Investment fTCIf $/kWe 103$/10* Btu/hr* WO 1,OOO 1,738 9,399 5,073 16,149 1,453 2,584 807 4,199 25, 192 1,938 3,779 634 820 32.363 323.6 32.4 250 2,500 1,875 16,070 8,859 26,805 2,412 4,289 1.340 6.969 41.816 3.217 6,272 1.247 1.388 53.932 215.7 21.6 500 5,000 3,844 26.764 14,058 44,666 4.020 7,147 2,233 11,613 69,679 5,360 10.452 2,107 2,349 89.947 179.9 18.0 1,000 10,000 4,541 53,272 22.743 80,556 7.250 12,889 4.028 20.945 125.667 9.667 18,850 3.573 4,270 162,027 162.0 16.2 1. Design scope Utility Boiler Stack gas reheat steam used; sludge disposed of in pond on-site Industrial Boiler No stack gas reheat steam used; sludge disposed of by outside contractor at $15/ton 2. Unit costs for raw materials, labor, utilities, etc. Utility Boiler See Table 2.1.3-1 in full report Industrial Boiler See Table 2.1.3-3 in full report 3 Ppnantw ntili7atinn fa^trvr "Bases given in Tables 2.1.2-1 and 2.1.2-2 of full report. "Assumes 10,000 Btu/kWh. CTCI = TDI + 11 + Other Capital Requirements. Table 4. Utility Boiler Limestone FGD System First Year Operating and Maintenance Costs (1981$) Annual OSMCosf, JO3 $/yr Boiler Capacity MWe Boiler Heat Inpuf (10* Btu/hr) Direct Costs Raw Material Limestone Conversion Costs Operating Labor & Supervision Utilities Process Water Electricity Steam Maintenance Labor & Materials Analyses TOTAL DIRECT COSTS Indirect Costs Overheads Plant & Administrative Total First year O&M Costs0 Mil/s/kWh $/10BBtu" WO 1,000 174 172 3 264 166 1.109 52 1.940 800 2.740 5.79 0.58 250 2,500 436 260 9 604 414 1,785 52 ' 3,560 1.258 4.818 4.07 0.41 500 5.000 872 356 18 1,201 829 2,970 78 6.324 2.042 8,366 3.53 0.35 1,000 10,000 1.744 486 38 2.343 1.657 5,428 104 1 1.800 3.611 15.411 3.26 0.33 a Bases given in Tables 2.1.2-1, 2.1.2-2, and 2.1.3-1 of full report. b Assumes 10,000 Btu/kWh. 0 Direct plus indirect costs. d Based on boiler heat input. Utility Boiler 0~54 Industrial Boiler 060 In addition to these factors, O&M costs that are estimated based on capital investment (such as maintenance and sometimes overhead) will be signifi- cantly different for the two systems because of factors which cause discon- tinuities in the capital investment (see previous discussion on capital invest- ment). The analyses performed illus- trate that the items identified above account for most of the cost discon- tinuity The discontinuities are shown graph- ically by plotting the data presented in Tables 1 through 4. Figure 1 is a plot of the capital investment costs and Figure 2 is a plot of the first year O&M costs. Also shown on these graphs is a plot of the normalized cost values which result from elimination of the differences in design scope, installation and indirect investment algorithms, capacity utiliza- tion factors, and unit costs mentioned above The final normalized curves eliminate most of the discontinuities in both sets of data. The rationale for developing the normalized curve is ------- 50- § So ro- - re i S. Normalized Capital Investment Curve Limestone FGD System 3.35-3.5% Sulfur Coal 90% S02 Removal Utility FGD Systems Capital Investment Costs (Table 3) Industrial FGD Systems Capital Investment Costs (Table 1) Cost Data from Tables 1 and 3 Resulting curve when industrial and utility cost are adjusted to same basis. This includes: (1) Design scope (2) Indirect investment algorithms (3) Method of installation (shop-fabricated or field-erected} 10 50 100 500 1000 5000 10000 Boiler Heat Input, 106Btu/hr i 5 i 10 50 100 For Utility Boilers, MWe Boiler Capacity 500 1000 NOTE: Utility boiler FGD unit investment estimates are provided for boiler capacities of 100-500 MWe and are expressed as dollars per 1O6 Btu/hr of capacity assuming a plant heat rate of 10,000 Btu/kWh. Industrial boiler FGD system estimates are also expressed as dollars per 106 Btu/hr of boiler capacity. The utility and industrial boiler investment and capacity scales are interchangeable if the same 10,000 Btu/kWh conversion factor is assumed. This is a close approximation of the heat rate for most utility plants. Figure 1. Capital investment for industrial and utility boiler wet limestone FGD systems. discussed in detail in Section 2 of the full report However, due to the environmental regulations and economy of scale, the design scope is likely to be considerably different for industrial and utility boiler FGD systems as discussed previously. Many components of industrial boiler FGD units are likely to be shop- fabricated; whereas, utility systems are field-erected. In addition, unit costs for raw materials, utilities, and solid waste disposal are likely to be considerably different due to volume or quantity considerations. Different capacity utili- zation factors may also be expected The factors affecting capital investment and, therefore, certain O&M costs (such as maintenance and overhead), are also important. Therefore, discontinuities in the capital investment and O&M curves similar to those shown in Figures 1 and 2 should be expected. In summary, the annual O&M and capital investment cost estimates for wet limestone FGD systems presented in this study* should be considered as valid consistent data Therefore, it is recommended that the cost data shown in Tables 1 through 4 be used in later acid ram studies as the basis for assessing cost impacts for FGD con- trols.** Of course, adjustment to the bases (such as design scope, start-up date, and site-specific unit costs for raw *For FGD systems applied to new industrial and utility boilers "Retrofit factors will have to be used to adjust these costs to reflect the costs of applying FGD systems to existing boilers materials, utilities, etc.) may be required by a particular reader. The data in this report is documented so that these adjustments can be made, if desired. FGD System Retrofit Factor Evaluation A retrofit factor is defined as the ratio of the capital investment or operating cost for installing a process in an existing plant to the capital investment or operating cost for the same process in a new installation. This factor is often applied to new installation costs to estimate the costs of putting the sqme basic equipment into an existing facility. Retrofit factors were only evaluated for utility boilers because there was no published information on retrofit factors for industrial boilers. Therefore, there is no retrofit factor recommendation for industrial boiler FGD systems. Capital Investment Retrofit factor studies performed by TVA, PEDCo Environmental, Inc., M.W. Kellogg, and Radian Corporation were examined. Retrofit factors ranging from 0 9 to 3.0 were found in these studies. Space availability was identified as the principal factor affecting the capital investment associated with retrofitting FGD systems. For a preliminary evaluation, a retrofit factor of 1 2 is recommended for "average" retrofits for boilers less than 10 yearsold and with capacities greater than 200 MW. A retrofit factor range of 1.1 to 1.4 is also recommended. The lower end of the range is applicable when installation of the FGD system is relatively uninvolved and when avail- able space for FGD equipment is adequate. Retrofit factors in the upper range nearer 1.4 would be used when 'retrofitting is complex The retrofit factor 1.2 is recom- mended for use in a preliminary evalua- tion of FGDsystem retrofit costs for util- ity boilers. The reader should note that: (1) Retrofit of FGD systems to some boilers will be infeasible. (2) Retrofit factors greater than 1.4 are possible. Only a site-specific evaluation of the factors associated with retrofit can accurately quantify the costs. Annualized Costs No retrofit factor for annualized costs is recommended. Increased annualized costs for retrofits compared to new ------- 5- 8 5 o (Q <* o 2 C 5- Industrial FGD Systems First year O&M Costs (Table 2) Cost Data from Tables 2 and 4 Resulting curve when industrial and utility costs are adjusted to same basis. This includes: (1) Design scope (2) Indirect investment algorithms (3) Unit cost for labor and materials (4) Capacity utilization factor (5) Method of installation (shop-fabrication or field-erected) Normalized O&M Cost Curve Utility FGD Systems First Year O&M Costs (Table 4) 10 50 1000 Boiler Heat Input, 10eBtu/hr 5000 10000 1 10 50 100 For Utility Boilers MWe 500 1000 Boiler Capacity NOTE: Utility boiler FGD unit annual O&M estimates are provided for boiler capacities of 100 -500 MWe and are expressed as$/10eBtu assuming a plant heat rate of 10,000 Btu/kWh. Industrial boiler FGD system estimates are provided for boiler heat input capacities of 30-200 x 10s Btu/hr and are expressed as$/106 Btu. The utility and industrial boiler capacity scales are interchangeable if the same 10,000 Btu/kWh conversion fact or is assumed. This is a close approximation of the heat rate for most utility plants. Figure 2. First year O&M costs for industrial and utility wet limestone FGD systems. systems are primarily associated with the higher capital investment. There- fore an annualized cost retrofit factor would be a strong function of the capital investment retrofit factor, the load factor of the boiler, and the remaining useful life of the boiler. The results of the study show that capital investment and O&M costs for a lime wet scrubbing system prepared by both organizations are very similar when all bases (economical and tech- nical) are made identical. TVA and PEDCo Environ- mental. Inc. FGD System Cost Comparison Both TVA and PEDCo have developed cost estimating procedures for utility boiler FGD systems. In the past, estimates from the two organizations have shown significant differences. Cost estimates by TVA and PEDCo were evaluated to determine whether the differences are real or a function of such factors as design scope, indirect invest- ment algorithms, unit cost for raw materials, utilities, and other economic parameters. USGPO:1982-659-095-567 ------- J. G. Ball and W. R. Menzies are with Radian Corporation, Austin, TX 78766. P. P. Turner is the EPA Project Officer (see below). The complete report consists of two volumes, entitled "Acid Rain Mitigation Study:" "Volume I. FGD Cost Estimates (Technical Report)," (Order No. PB 83-101 329; Cost: $16.00, subject to change) "Volume II. FGD Cost Estimates (Appendices)," (Order No. PB 83-117 366; Cost: $20.50, subject to change) The above reports will be available only from: National Technical Information Service 5285 Port Royal Road Springfield, VA22161 Telephone: 703-487-4650 The EPA Project Officer can be contacted at: Industrial Environmental Research Laboratory U.S. Environmental Protection Agency Research Triangle Park. NC 27711 United States Environmental Protection Agency Center for Environmental Research Information Cincinnati OH 45268 Postage and Fees Paid Environmental Protection Agency EPA 335 Official Business Penalty for Private Use $300 AGENCY ------- |