Techno-economic Assessment Methodology and Results to post.pdfTechno-economic Assessment Methodology...

Techno-economic Assessment Methodology and ResultsJason Quinn

Department of Mechanical Engineering

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Acknowledgements

• Benjamin Vegel

• Department of Energy Funding #: DE-EE0007562

• Meeting organizers

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General Approach

Sustainability Modeling

Economic Viability-TEA

Environmental Impact-LCA/RA

Experimental Systems

Knowledge Gaps

Model Validation

Feasibility Demonstration

System Performance

System Modeling

Modular in Construction High Fidelity Large Scale

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Technology SpaceEnergy FoodMicroalgal Biosystem

Yeast BiosystemsNuclear Power Systems

WPT for Transportation Desert Agriculture

Water Systems

Power System Optimization

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Techno-economic Methodsnth Plant Assumptions

Description Assumed ValueInternal rate of return 10%

Financing debt / equity 60% / 40% of total capital investmentPlant life 30 years

Income tax rate 35%Debt interest rate 8% annually

Term for debt financing 10 yearsWorking capital cost 5.0% of fixed capital investment (w/o land)

Depreciation schedule 7-years MACRSConstruction period 3 years (8% 1st yr, 60% 2nd yr, 32% 3rd yr)Plant salvage value No value

Start-up time 6 months

Revenue and costs during start-up

Revenue = 50% of normal Variable costs = 75% of normal Fixed costs = 100% of normal

On-stream factor 90% (330 operating days per year)Indirect capital costs 60% of total installed downstream capital

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CAPX – OPX Tradeoff

• Correlation between CAPX, OPX, and yearly revenue:

𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵 𝑅𝑅𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝑅𝑅𝐵𝐵$𝑦𝑦𝐵𝐵

≈ 0.140 ∗ 𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶 $ + 1 + 1.44% ∗ 𝑂𝑂𝐶𝐶𝐶𝐶$𝑦𝑦𝐵𝐵

Fuel + Co-products

+ Credits

Weight of Capital:IRR, depreciation, loan interest, etc

From Year 1 start-up

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CAPX – OPX Tradeoff

• Tradeoff of $7.3 CAPX ≈ $1 yr-1 OPX• Ratio depends on CAPX term

– Weight of upfront vs. recurring costs

– Especially IRR

𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵 𝑅𝑅𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝑅𝑅𝐵𝐵$𝑦𝑦𝐵𝐵

≈ 0.140 ∗ 𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶 $ + 1 + 1.44% ∗ 𝑂𝑂𝐶𝐶𝐶𝐶$𝑦𝑦𝐵𝐵

nth

plant

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Impact of Methodology: Biofuel ExampleGovernment subsidies Depreciations Schemes

Loan Scenarios

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Techno-economic RequirementsThree Core Components

Overnight Capital Cost Operational Cost Annual Output & Products

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Techno-Economic Assessment

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

Coal NaturalGas

CoalCCS

NaturalGas CCS

PV CSP Nuclear Wind

Leve

lized

Cos

t of E

nerg

y ($

2020

kW

h-1)

Social Cost 3%-95thSocial Cost 2.5%Social Cost 3%Social Cost 5%Standard TEA

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Capital Cost EstimationExisting estimates for LR

Materials estimates Cost estimatesCapital Cost

Top-down Method

Bottom-up Method

Scaling factorsLearning curves

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Top Down: Capital Estimation$5,460 kWe -1

LR input

Top-down: scaling factorsComponent n

Building 0.5

Spent fuel management 1

Instrumentation and control 0.6

Other, electric 0.6

Other, direct 0.3

Contingency 0.55

Owner’s costs 0.29

Reactor pressure vessel 1

Control rods 1

Steam generation 1

Chemical volume controls 0.667

Other, reactor 0.6

Containment 0.667

Condenser 0.72

Turbo-generator 0.8

Special equipment 0.4

Conventional indirect 0.75

Engineering 0.2

Nuclear indirect 0.5

Learning curveFactory production

Factory production integration

Construction from 6-9 years to ~3 years

Reduced contingency

Reactor

Generatorcomponents

Construction

Other

Co-siting benefitsSharing of componentsUpfront

decrease SMR costsincrease SMR costs

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Top-down capital costs $5,576 kWe -1

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Factory facility cost addition

Input Parameters

Factory capital ($/ft2) $200-$500

SMR dimensions 89’ by 32’

Space increase factor 2x-5x

Reactor orders 58

Generator space increase Up to 50%

Build time 2 years

Cost distribution over units 20 years

Facility capacity 6 unitsBaseline model: median value

• 3 cost and space scenarios

• Costs are allocated across reactors (based on demand)

$19.42 kWe-1

$5.52 kWe-1

$44.64 kWe-1

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Capital Cost EstimationExisting estimates for LR

Materials estimates Cost estimatesCapital Cost

Top-down Method

Bottom-up Method

Scaling factorsLearning curves

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Bottom Up CostingComponent n

Building 0.5

Spent fuel management 1

Instrumentation and control 0.6

Other, electric 0.6

Other, direct 0.3

Contingency 0.55

Owner’s costs 0.29

Reactor pressure vessel 1

Control rods 1

Steam generation 1

Chemical volume controls 0.667

Other, reactor 0.6

Containment 0.667

Condenser 0.72

Turbo-generator 0.8

Special equipment 0.4

Conventional indirect 0.75

Engineering 0.2

Nuclear indirect 0.5

Concrete (Gen IV):76.3 m^3/MWe

Materials: GT-MHR (helium Gen . IV)

Structure TypeMaterial Cost

($/m^3) Concrete (m^3) Concrete (m^3/MWe)

Reactor pressure vessel Substructure Nuclear 18000 62.94

Steam generation Superstructure Nuclear 0 0.00

Other, reactor Substructure Nuclear 0 0.00

Containment Superstructure Nuclear 1973 6.90

Conventional building Substructure Non-nuclear 1586 5.55

Other, electical Substructure Non-nuclear 188 0.66

Other, direct Substructure Non-nuclear 68 0.24

252.81

252.81

252.81

252.81

168.43

168.43

168.43

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Bottom up costing

$M

$200M

$400M

$600M

$800M

$1000M

$1200M

GT-MHR Gen IV

Contingency

Owner's costs

Indirect

Factory capital

Other, direct

Other, electical

Conventional Building

Containment

Other, reactor

Steam generation

Reactor pressure vessel

non-nuclear

nuclear

$3,697 kWe -1

cost input

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Operational Costing$17.38 MWh -1 $9.10 MWh -1

fueling$2,896 MWt -1

annual regulatory fee sliding scale (max $5,223,000)

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Techno-economics Analysis

$M

$50M

$100M

$150M

$200M

$250M

$300M

1 2 3 4 5 6 7 8 9 101112131415161718192021222324252627282930313233

Income taxRegulatory feesFuelingOperationalLoan interest Loan principal Fixed capitalElectricity sales

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Levelized Cost of ElectricityLCOE Gen III+

$91.80 MWh-1 LCOE (30 years)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Reactor

Income taxRegulatory feesFuelingOperationalLoan interest Loan principal Fixed capital

LCOE Gen IV

$49.43 MWh-1 LCOE (30 years)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Reactor

Income tax

Regulatory fees

Fueling

Operational

Loan interest

Loan principal

Fixed capital

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Direct Comparison

Perc

enta

ge o

f LCO

E Operation

Capital

Income tax

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The Value

• Existing modeling work in place• Identify strategic targets based on economic metrics• Evaluate the impact of technological changes• Non-dilutive addition

Sustainability Modeling

Economic Viability-TEA

Environmental Impact-LCA/RA

System Modeling

Modular in Construction High Fidelity Large Scale