IECM 12.0 beta User Manual > Modules Included with the IECM > Common Input and Result Screens > Costs >

Capital Cost Inputs

Capital costs for most technologies are entered on a standard capital cost parameter screen.

The necessary capital cost input parameters associated with a technology are on this input screen. The capital cost parameters and terminology used in the IECM are based on the methodologies developed by the Electric Power Research Institute (EPRI). They have prepared a Technical Assessment Guide (TAG) in order to provide a consistent basis for reporting cost and revenues associated with the electric power industry. This system of reporting is used by a wide audience, including energy engineers, researchers, planners, and managers. The IECM has been developed around this TAG system so that costs associated with various technologies can be compared directly on a consistent basis and communicated in the language used by the audience listed above.

Total Plant Cost (TPC) is the sum of the process facilities capital, general facilities capital, engineering and home office fees, and the contingencies (project and process). This is considered the cost on an instantaneous basis (overnight), and expressed in December dollars of a reference year.

Direct Capital Costs for each process area are calculated in the IECM. These calculations are reduced form equations derived from more sophisticated models and reports. The sum of the direct capital costs associated with each process area is defined as the Process Facilities Capital (PFC). This is the basis for all other capital cost parameters.

The Process Facilities Capital for the technology is the total constructed cost of all on-site processing and generating units, including all direct and indirect construction costs. All sales taxes and freight costs are included where applicable implicitly. These direct capital costs are generally calculated by the IECM and not presented directly on input screens. However, when important input variables are required for these calculations, they are listed at the top of the input screen.

Indirect Capital Costs are costs that are indirectly applied to the technology. They are based on the process facilities cost. Each of the cost factors below is expressed as a percentage of the process facilities cost, and is entered on this screen. The following parameters are provided:

•Construction Time: This is the idealized construction period in years. It is used to determine the allowance for funds used during construction (AFUDC). The construction time for individual technologies is set to the construction time for the overall plant by default.

•Some calculations, including some capital cost factors, only apply to part of the process facilities capital (PFC). The following parameters determine the allocation of the PFC. The remainder is allocated to construction labor:

•%PFC Allocated to Equipment

•%PFC Allocated to Materials

•General Facilities Capital (GFC): The general facilities include construction costs of roads, office buildings, shops, laboratories, etc. Sales taxes and freight costs are included implicitly. The cost typically ranges from 5-20% of the PFC.

•Engineering & Home Office Fees (E): The engineering & home office fees are a percent of total direct capital cost. This is an overhead fee paid to the architect/engineering company. These fees typically range from 7-15% of the PFC.

•Process Contingency Cost (C): This quantifies the design uncertainty and cost of a commercial-scale system. This is generally applied on an area-by-area basis. Higher contingency factors are applied to new regeneration systems tested at a pilot plant and lower factors to full-size or commercial systems. This is a percentage of the PFC. This input is highlighted in blue.

•Project Contingency Cost: This is factor covering the cost of additional equipment or other costs resulting from a more detailed design. Higher contingency factors will be applied to simplified or preliminary designs and lower factors to detailed or finalized designs. This is a percentage of PFC + E + C, where E is Engineering & Home Office Fees, and C is the Process Contingency Cost. This input is highlighted in blue.

•Royalty Fees: Royalty charges may apply to some portions of generating units incorporating new proprietary technologies. This is a percentage of the PFC.

•Pre-Production Costs: These costs consider the operator training, equipment checkout, major changes in unit equipment, extra maintenance, and inefficient use of fuel or other materials during start-up. These are typically applied to O&M costs over a specified period of time (months).

•Fixed Operating Cost: This is the number of months of fixed operating costs (operating and maintenance labor, administrative and support labor, and maintenance materials) used for plant startup.

•Variable Operating Cost: This is the number of months of variable operating costs at full capacity (chemicals, water, and other consumables, and waste disposal changes) used for plant startup. Full capacity estimates of the variable operating costs will assume operations at 100% load.

•Misc. Capital Cost: This is a percent of total plant investment (sum of TPC and AFUDC) to cover expected changes to equipment to bring the system up to full capacity.

•Inventory Capital: Percent of the total direct capital for raw material supply based on 100% capacity during a 60- day period. These materials are considered storage. The inventory capital includes fuels, consumables, by-products, and spare parts. This is typically 0.5% of the TPC.

•Financing Cost: This is the cost of securing financing (e.g., fees and closing costs). It is specified as a percentage of the TPC.

•Other Owner's Costs: This is an additional lumped cost, including preliminary feasibility studies, economic development, construction and/or improvement of roads and/or railroad spurs outside of site boundary, legal fees, permitting costs, owner's engineering, and owner's contingency. This cost is site and owner specific. It is specified as a percentage of the TPC.

•%TCR Amortized: This is the percentage of the total capital required (TCR) that has been amortized. This value is 0% for new equipment and may be set as high as 100% for equipment that has been paid off.