Utilization of Digital Automation Architecture Can Slash Nearly $20 Million from New Coal Plant Construction Costs

New study shows that digital bus technologies can significantly reduce costs to build an $840 million greenfield 600-megawatt pulverized coal-fired supercritical power plant

PITTSBURGH, PA (December 9, 2003) — Integrating digital bus technology into the design of new coal-fired power plants can result in total project cost reduction of as much as $20 million for a 600-megawatt coal-fired plant according to a new plant construction study released today at POWER-GEN International 2003.

Emerson, who commissioned the independent study, explained the purpose and chosen study methodology. “PlantWeb® , Emerson's digital plant architecture, has been installed in other industries around the world and has proven to save 30 percent or more in installed automation costs,” said Ann Pauley, president of the Power & Water Solutions industry center of Emerson Process Management. “We were confident that the digital approach would deliver superior automation and major cost reductions for construction of coal-fired power plants. We determined that contracting a rigorous, quantified third-party study based on engineering and construction practices was a viable, unbiased method of demonstrating the possibilities.”

"The Economic Impact of Digital Bus Technology on New Plant Construction,” conducted by JDI Contracts Inc., identified and compared five categories of costs: engineering, construction, startup, system selection and overheads. These costs were applied to two different approaches – traditional and digital bus-based – to instrumentation & control (I&C) system implementation for an $840 million greenfield 600-megawatt pulverized coal-fired supercritical power plant.

According to the study, utilization of digital I/O bus technology can slash up to $20 million – or 2.35 percent – off the entire project budget. “This study details a methodology that gives stakeholders in the utility industry the best of both worlds: the ability to save millions of dollars in construction costs while also delivering a highly automated plant featuring state-of-the-art I&C systems,” said Roger Hoyum, author of the study.

The traditional approach used an Engineer-Procure-Construct (EPC) model and selected an I&C system through an evaluated bid process. The installation utilized dedicated field cables to hardwire non-intelligent field devices to I/O cards. The digital bus approach, which used an alternative selection process – PEpC (Procure strategic suppliers, Engineer, procure balance of plant and Construct) – featured an integrated system of high-speed communications networks, intelligent field devices and bus I/O technologies. The digital bus approach also used traditional I/O for certain high-speed and safety-related loops.

Defining the Study

The plant and remote buildings were physically defined by plan, elevation and several general arrangement (GA) drawings. Researchers estimated the engineering time for typical design tasks for both approaches. The plant was logically defined by an existing plant specification with roughly 5,200 hard and 4,250 soft I/O partitioned into typical power plant system designations. Appropriate systems were placed on GA drawings to complete the physical plant definition.

Next, researchers placed control system cabinets and Motor Control Centers (MCC) on GA drawings. Design criteria were developed for both approaches, including construction labor costs, tray conduit and cable lengths, and material costs. Individual design parameters were assigned to all I/O points in the study to complete the construction estimate. Device upgrade costs from smart transmitters, digital I/O and intelligent motor interfaces were estimated for the digital installation. Plant checkout and startup tasks were defined for each I/O type, as well.

Fixed overhead costs were assigned to all construction and startup line items, and included administrative and general support, construction management, contingency, contractor indirect charges, freight, project management, spares and sales tax. Variable overheads included inflation escalation and IDC at a rate of 3 percent and 6 percent, respectively, both compounded calculations.

Digital Bus Technology Adds Value, Cuts Costs

Researchers determined that the digital bus approach to new plant construction provided opportunities for reduced costs in all areas studied. Items considered for engineering, construction, startup, system selection and overhead costs for a traditional I&C system totaled approximately $50.1 million, compared with $30.4 million for the digital I/O bus approach, resulting in a savings of more than $19 million (39.4 percent), or $2,000 per I/O point. Breakouts of these savings appear below.

Engineering

Early adoption of digital bus technology simplified the engineering process, resulting in savings of approximately $3.5 million. For example, the study indicated that engineering time is reduced with the digital I/O bus approach due to use of standard templates and objects, the need for fewer drawing review cycles and less system complexity. Less complexity, in turn, allows for higher I/O density on drawings, which then reduces the number of drawings needed.

Construction

The cost of construction takes into account both the material cost of the I&C equipment and the cost of the labor required to perform the installation. The study demonstrated that utilization of digital bus technology resulted in $3.6 million in savings, primarily a result of reduced labor and material costs needed to install tray, cable, conduit, terminations and I/O cards.

Startup

Because of the reduced complexity of the digital bus installation, the time required for checkout and startup can be significantly reduced, resulting in savings of nearly $426,000. “If the checkout process can be shortened it will save time and money in staffing,” explained Hoyum.

“But, even more importantly, reducing the time spent on the critical path to unit synchronization leads to much more significant savings in IDC,” he continued.

System Selection

Early standardization on digital I/O bus technology streamlined the traditional specification and bid process. It also created other efficiencies, such as reducing the amount of general engineering support needed for overall plant construction. In total, savings of approximately $300,000 were achieved.

Overheads

Finally, the study demonstrated how digital bus technology can have a huge impact on fixed and variable overhead costs, resulting in savings of roughly $11.9 million. This is primarily reflected in reduced IDC costs made possible by significantly reducing checkout and firing time. In this study, the use of digital I/O bus technology could cut two months or more off of a six-month checkout and up to one month from a three-month startup period. “IDC begins at the start of construction and continues to be charged against construction until commercial operation begins,” said Hoyum. “So, it's easy to see how saving three months of IDC can play a huge role in reducing overhead costs.”

Implications for the Industry

Findings of the study come at a time of growth for this industrial sector, with 93 new coal-fired plants representing 61 gigawatts of capacity currently proposed, according to the Department of Energy's National Energy Technology Lab. With the first wave of capacity additions expected from 2006 to 2008, the study has great implications for stakeholders involved in the project development phase.

“By making it possible to save millions of dollars while delivering a state-of-the-art plant, the digital bus-based approach outlined in this study is setting a new standard for plant construction,” said Hoyum. “And with so much at stake in projects such as these, it is an approach utility stakeholders can't afford to ignore.”

About JDI Contracts Inc.

JDI Contracts Inc. (www.jdicontracts.com) is a privately owned Minnesota-based consulting firm serving industrial and commercial customers. Services include project development and management, multi-disciplined engineering support, and construction management. JDI Contracts Inc. specializes in change management, allowing customers to concentrate on core business operations.

About Emerson Process Management

Emerson Process Management (www.emersonprocess.com), an Emerson business, is a leader in helping businesses automate their production, processing and distribution in the power, water and wastewater treatment, chemical, oil and gas, refining, pulp and paper, food and beverage, pharmaceutical, and other industries.

Emerson's Power & Water Solutions division (www.emersonprocess-powerwater.com), formerly Westinghouse Process Control, is a global supplier of advanced distributed process control and information systems. The Pittsburgh-based company is a recognized leader in developing plant-wide process control solutions for the power generation, water treatment and wastewater treatment industries. Power & Water Solutions plays a key role in the Emerson mission of combining superior products and technology with industry-specific engineering, consulting, project management and maintenance services. Emerson brands include: PlantWeb® ; Ovation® ; SmartProcess® ; Fisher® ; MicroMotion® ; Rosemount®; DeltaV™; and AMS™ Suite.

About Emerson

St. Louis-based Emerson (www.gotoemerson.com) is a global leader in bringing technology and engineering together to provide innovative solutions to customers in process control; electronics and telecommunications; industrial automation; heating, ventilating and air conditioning; and appliance and tools. Sales in fiscal 2003 were $14 billion.

Ovation, SureService, SmartProcess, PlantWeb, Fisher, Micro Motion, Rosemount, AMS™ Suite and DeltaV are marks of Emerson Process Management. Other marks are the property of their respective owners.