session 9: estimating costs agenda homework discussion cost resources cost trends cost estimating...

32
Session 9: Estimating Costs Agenda • Homework Discussion • Cost Resources • Cost Trends • Cost Estimating • Cost Learning Curves • Supply Chain • Homework Assignment

Upload: bruno-cudworth

Post on 14-Dec-2015

220 views

Category:

Documents


2 download

TRANSCRIPT

Session 9: Estimating Costs

Agenda• Homework Discussion• Cost Resources• Cost Trends• Cost Estimating• Cost Learning Curves• Supply Chain• Homework Assignment

Trough Capital Cost Estimate

• Used ASPEN estimating software and Bechtel experience• 250 MWe Plant with 3 hours of storage• 735 deg F reheat Rankine steam power block, 38% efficiency• Therminol HTF and Molten Salt storage• $3500/kWe (2005 dollars) Overnight Capital Cost• $4400/kWe (2011 dollars) Overnight Capital Cost

2

3

Cost Trends• Commercial Off-the-Shelf (COTS) leads to low cost

• Development is amortized over the expected production run

• High temperature metal alloys are expensive

• Specialty items that are not part of the manufacturer’s main businessare often expensive and not always available

• Costs vary with supply and demand

• Quotes• ROM – Rough Order of Magnitude (+/- varies with supplier)• Quote good for a specific amount of time• Quote with inflation adjustments• Change orders

4

Cost Trends• Costs must be quoted in what year dollars

• Costs can be adjusted for inflation using Marshall and Swift Index

• Costs can be estimated from a quote at another size using a scalingexponent

• If exponent not known, use 0.6

5

Development Costs Production Costs

Prototype Cost

Estimate• Vendor Quotes• Supplier Catalogs• Engineering Judgment• Labor Estimates

Actual Cost• Labor hrs and rates• Invoices

•Project Management•Design•Testing•Documentation•Prototype

• Factory• Tooling• Unit Production Cost (UPC)

Unit Production Cost, nth Unit

Estimate for UPC• Learning Curve and Prototype Cost• Vendor Quotes• Supplier Catalogs• Engineering Judgment

Actual Cost• Factory labor hrs and rates• Invoices

LearningCurve

PartialPrototype

Engineering Cost Estimates

6

C = Cr (S/Sr)m

C = cost for size of item of interest

Cr = reference case cost

S = size of item of interest

Sr = reference case size

m = scaling exponent

Simple Cost Estimating Formula

7

Chemical EngineeringMagazine Article

8

Cost at = Reference (Index at date of interest)__Date of Cost (Index at date of reference cost)Interest

• Consumer Price Index• Marshall and Swift

Adjusting for Inflation

9

10

11

12

13

14

15

Learning CurvesInteresting website Learning Curve Calculator: http://cost.jsc.nasa.gov/learn.html

Aerospace 85% Shipbuilding 80-85% Complex machine tools for new models 75-85% Repetitive electronics manufacturing 90-95% Repetitive machining or punch-press operations 90-95% repetitive electrical operations 75-85% Repetitive welding operations 90% Raw materials 93-96% Purchased Parts 85-88%

16

Cumulative Units

Unit Cost

1st Unit CostCumulative Cost (shaded area)Nth Unit Cost

1 Nth Unit

17

Cost of Electricity (COE) Calculations• Cost of Electricity is expressed in $/kWh

• COE = Fixed Charges + O&M Charges + Fuel Charges

• Fixed Charges • Plant capital cost• Fixed charge rate• Capacity factor (equivalent % of year plant at rated capacity)• Rated capacity

• O&M Charges (Operation & Maintenance)

• Based on factored historical data

• Fuel Charges• Fuel cost• Plant efficiency

Source: The Cost of Energyfrom Utility-Owned SolarElectric Systems, 1976, ERDA/JPL-1012-76/3

18

Beginning of Life vs. Levelized COE

LCOE

COEo

Ener

gy C

ost,

$/kW

h

Time, yearsBeginningOperationalLife

End ofOperationalLife

19

Beginning of Life Cost of Electricity (COEO) • COEO = Fixed Charges + O&M Charges + Fuel Charges

• Fixed Charges = (FCR * CI) / (RC * CF * 8760 hrs/year) • FCR = Fixed Charge Rate

• Cost of Money• Taxes and Insurance• Depreciation• Working Capital

• RC = Rated Capacity of plant in kW• CF = Capacity Factor = equivalent % of year plant operates at RC• CI = Capital cost on the first day of operation

• O&M Charges (Operation & Maintenance)• Based on factored historical data

• Fuel Charges = FCO * 3414 Btu/kWh / ηPP

• FCO = Beginning of Life fuel cost in $/Btu• ηPP = Overall power plant efficiency

20

Example Problem for COEO

Fixed Charges = (FCR * CI) / (RC * CF * 8760 hrs/year)

= (0.18 * $1.875 B *109/B)___________________ (700 MWe * 1000kW/MW * 0.70 * 8760 hrs/year)

= $0.079/kWe

Fuel Charges = FCO * 3414 Btu/kWh / ηPP

= ( $5 MMBtu * 106/MM * 3413 Btu/kWh )/ 0.65

= $0.026/kWh

COEo = 0.079 + 0.026 + 0.010 = 0.115 $/kWh

• Given: A natural gas-fired combined gas turbine/steam power plant Rated Capacity = 700 MWe Capital Investment = $1.875 Billion (2008 $s) Capacity Factor = 0.70 Efficiency = 65% natural gas to bus bar FCR = 18% Fuel Cost = $5/MMBtu O&M = $ 0.010/kWh

21

Levelized Cost of Electricity• Levelizes the inflationary effects of fuel and O&M costs over the life of the plant.

• Fixed Charges – same as in COEO

• Fuel Charges = (FCPV * 3413 Btu/kWh * CRFk,N ) / ηPP

• FCPV = ((1 + if )/(k-if)) * [ 1 – ((1+if)/(1+k))^N] * FCO

• CRFk,N = Capital Recovery Factor = k/[1-((1+k)^ -N)]

• O&M = ((1 + iom )/(k-iom)) * [ 1 – ((1+iom)/(1+k))^N] * OMO

Charges

• Where: if = fuel inflation rate iom = O&M inflation rate k = discount rate N = plant life in years

22

USA CSP Supply Chain• Fragmented

• More variation than PV• Specialized components• Unclear demand for technologies• More components needed in pipeline

• Need government support for US Market• Large up-front investment• Utilities under-value long-term value of storage

23

CSP Supply Chain Challenges• Reduce Costs

• Higher production• R&D• Automated factories• Consolidated services

• Ex. Flabeg glass mirrors—added field design, performance simulation, EPC management

• Local Supply Chain

• Benefits: reduced costs, increased communications and simplified logistics

• Challenges:• Local expertise• Demand assurances• Government support policies

24

Source: G. Gereffi and K. Dubay, Greeneconomy,Chapter 4, Concentrating Solar Power, CGGC

25

26

27

28

29

30

31

Team Project: Costs and COEoYour manager has just read a report on the status of power tower CSP with storage.

Estimate the capital investment and COEo for the following assumptions:• FCR = 0.12 and 6 hours of storage• Location is Imperial Valley with peak insolation of 1000 Watts/square meter• Solar multiple is 2.7• Capital cost of field is ________ $/square meter• Capital cost of remaining plant is $1500/kWe• Power block peak efficiency is 35%• O&M is 0.02 $/kWe

1. Draw a block diagram of the plant2. Calculate the capital investment and COEo3. Put your work on easel charts4. Present your work to the class

You have 15 minutes to prepare and 15 minutes for class presentations.

32