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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.
A plant construction schedule and budget was created to estimate
a total spending curve. From this, researchers developed a construction
financing methodology to estimate interest during construction
(IDC), which is the cost to borrow money to build the facility.
Inflationary escalation was estimated based on typical utility
accounting methods.
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.
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