  SEQ CHAPTER \h \r 1    

MEMORANDUM

DATE:		January 29, 2010

SUBJECT:	Control Costs for Existing Stationary CI RICE

FROM:	Bradley Nelson, EC/R, Inc.

		

TO:		Melanie King, EPA OAQPS/SPPD/ESG

1.0	PURPOSE

	The purpose of this memorandum is to present information on the costs
of control technology options for reducing hazardous air pollutants
(HAP) emissions from stationary compression ignition (CI) reciprocating
internal combustion engines (RICE).  These estimates will be used for
the above-the-floor maximum achievable control technology (MACT)
analysis and generally available control technology (GACT) regulatory
alternatives for RICE at major and area sources.  This memorandum
presents the cost of retrofitting control technology on existing
engines.  

 

2.0	INTRODUCTION

	EPA has determined that diesel oxidation catalysts (DOC), catalyzed
diesel particulate filters (CDPF), closed crankcase ventilation (CCV)
and open crankcase ventilation (OCV) are applicable controls for HAP
reduction from stationary CI RICE.  To determine the capital and annual
costs for these control technologies, equipment cost information was
obtained from a cost study performed by the California (CA) Air
Resources Board (ARB) and cost data obtained from vendors.  The
annualized cost and capital cost equations were used to estimate the
national impacts of controlling emissions from existing stationary CI
engines.   3.0	METHODOLOGY FOR DETERMINING COST EQUATIONS

	The following section describes the methodology used to derive the
capital and annual costs for each of these control technologies.   The
capital and annual costs were determined using the costing methodology
in the EPA Control Cost Manual.  A summary of the methodologies,
equations, and assumptions used to estimate the capital and annual cost
are described in the following sections.

3.1 	Total Capital Costs

	The total capital cost includes the direct and indirect costs of
purchasing and installing the control equipment.  The direct cost
includes the cost of purchasing the equipment and instrumentation, cost
of shipping, and the cost of installing the control equipment.  The
indirect cost includes the costs for engineering, contractor fees,
testing costs, and also includes costs for contingencies, such as
additional modifications, or delays in startup.  The total capital cost
equation can be summarized as follows;

Total Capital Cost (TCC) = Direct Costs (DC) + Indirect Costs (IC)

The direct costs include the costs of purchasing and installing the
control equipment and can be summarized using the following equation; 

DC = Purchased Equipment Cost (PEC) + Direct Installation Costs (DIC).

A summary of the cost assumptions for PEC includes the following:

- Control Device and Auxiliary Equipment (EC);

- Instrumentation (10% of EC);

- Sales Tax (3% of EC);

- Freight (5% of EC);

and can be summarized as:

PEC = 118% EC.

A summary of the cost assumptions for DIC includes the following: 

- Foundations and Supports (8% of PEC);

- Handling and Erection (14% of PEC);

- Electrical (4% of PEC);

- Piping (2% of PEC);

- Insulation for Ductwork (1% of PEC);

- Painting (1% of PEC);

and can be summarized as:

DIC = 30% PEC = 0.3 PEC.

Therefore, the direct costs can be simplified using the following
equation:

DC = PEC + 0.3 PEC = 1.3 PEC.

The indirect costs include the costs of engineering and contractor fees
and contingencies and can be summarized using the following equation:

IC = Indirect Installation Costs (ICC) + Contingencies (C).

A summary of the cost assumptions for ICC includes the following:

- Engineering (10% of PEC);

- Construction and Field Expenses (5% of PEC);

- Contractor Fees (10% of PEC);

- Startup (2% of PEC);

- Performance Test (1% of PEC);

and can be summarized as:

IIC = 28% PEC = 0.28 PEC.

A summary of the cost assumptions for C includes the following:

- Equipment Redesign and Modifications;

- Cost Escalations;

- Delays in Startup;

and is assumed to be:

C = 3% PEC = 0.03 PEC.

Therefore, the IC can be summarized using the following equation:

IC = 0.28 PEC + 0.03 PEC = 0.31 PEC,

and the simplified TCC equation can be expressed as:

TCC = 1.3 PEC + 0.31 PEC = 1.61 PEC = 1.61 (1.18 EC) = 1.9 EC

3.2 	Total Annual Costs

	The total annual cost includes the direct and indirect annual costs of
operating and maintaining the control equipment.  The direct annual cost
includes the cost of the utilities, operating labor, and control device
cleaning and maintenance.  The indirect annual cost includes the
overhead costs such as spare parts for the control equipment,
administrative charges, and the capital recovery of the control
technology.  The total annual cost equation can be summarized as
follows:

Total Annual Cost (TAC) = Direct Annual Costs (DAC) + Indirect Annual
Costs (IAC).

A summary of the cost assumptions for DAC includes the following:

- Utilities; 

- Operating Labor;

- Maintenance;

- Annual Compliance Test;

- Catalyst Cleaning;

- Catalyst Replacement;

- Catalyst Disposal.

A summary of the cost assumptions for DAC includes the following:

- Overhead (60% of operating labor and maintenance costs);

- Fuel Penalty;

- Property Tax (1% of TCC);

- Insurance (1% of TCC);

- Administrative Charges (2% of TCC);

- Capital Recovery = {I(1+I)n/((1+I)n-1)*TCC} where I is the interest
rate, and n is the equipment life.

The DAC and fuel penalty costs will be estimated using information
obtained for each of the control technologies.  The other annual costs
will be calculated using the assumed percentages.

4.0	CONTROL COST EQUATIONS

4.1	Diesel Oxidation Catalysts

	The cost of retrofitting a DOC to an existing CI engine was estimated
using cost data obtained from a diesel engine control technology study
performed by the California ARB.  The study provided equipment cost
ranges for 40, 100, 275, 400, and 1,400 horsepower (HP) diesel engines. 
The average cost in the cost range for each of the engine sizes was used
to develop the capital and annual cost for each of the engines.  The
capital cost was calculated using the EPA Control Cost methodology and
includes the direct, indirect, and contingency costs of installation of
the DOC.  The total annual cost was also calculated using the EPA
Control Cost methodology and includes the direct and indirect annual
costs of operating and maintaining the DOC.  Maintenance costs were
estimated using the average of the cost range provided in the California
ARB study.  The study estimated the maintenance costs to range from $64
to $712 per year; $50 to $100 for thermal cleaning and 1 hour labor
($78) once every other year to 4 times a year.  For estimating the
annual maintenance cost, the thermal cleaning was estimated to cost $153
($75 for cleaning + $78 for 1 hour labor) and the thermal cleaning would
occur twice a year for a total maintenance cost of $306 per year.  An
equipment life of 10 years and an interest rate of 7 percent were used
to estimate the indirect annual costs.  The 10 year equipment life is
consistent with the average life of control equipment.  The fuel penalty
associated with operating a DOC was assumed to be negligible.  The
capital and annual costs were adjusted to 2008 dollars using the
Marshall & Swift Equipment Cost Index.

	The calculated annual cost was plotted against the engine HP and the
resulting graph showed a straight line relationship between the annual
cost and engine HP.  Therefore a linear regression was performed using
the calculated annual cost and the engine HP to develop an equation that
estimates annual costs when an engine HP is input into the equation.  A
summary of the calculated annual costs, graph, and linear regression
analysis is presented in Appendix A of this memorandum.  The annualized
cost equation for retrofitting a DOC on a CI engine was estimated to be:

DOC Annual Cost = $4.99*HP + $480

where;

HP = engine size in HP.

The linear equation has a correlation coefficient of 0.9938, which shows
the data fit the equation very closely.  Therefore, this equation was
used to estimate annualized cost for DOC for RICE at major and area
sources.  

	For capital cost, a graph of the calculated capital cost and the engine
HP showed a straight line relationship between the two variables. 
Therefore a linear regression was performed using the calculated capital
cost and the engine HP to develop an equation that estimates capital
costs when an engine HP is input into the equation.  A summary of the
calculated capital costs, graph, and linear regression analysis is
presented in Appendix A of this memorandum.  The capital cost equation
for retrofitting a DOC on a CI engine was estimated to be: 

DOC Capital Cost = $27.4*HP - $939

where;

HP = engine size in HP.

The linear equation has a correlation coefficient of 0.9938, which shows
the data fit the equation very closely.  Therefore, this equation was
used to estimate capital cost for DOC for RICE at major and area
sources.

4.2	Catalyzed Diesel Particulate Filters

	The CDPF is a control technology that reduces the emissions of HAP from
CI engines.  However, it is primarily installed on engines for the
reduction of PM from the CI engine exhaust.  The catalyst element in the
CDPF is also effective in reducing the emissions of CO and volatile
organic compounds (VOC).  The filter system of the CDPF can be either
active or passive.  The passive CDPF uses heat from the engine to
regenerate the filter media, whereas the active filter uses an electric
heater or fuel burners to regenerate the filter media.  The catalyzed
coating in each of the two systems reduces emissions of CO, VOC, and HAP
emissions.

	The cost of retrofitting an active or passive CDPF to an existing CI
engine was estimated using cost data obtained from a diesel engine
control technology study performed by the California ARB.  The cost
study did not distinguish equipment costs between the active and passive
CDPF, therefore the equipment costs were assumed to be the same for both
technologies.  The study provided equipment cost ranges for 40, 100,
275, 400, and 1,400 HP diesel engines.  The average cost in the cost
range for each of these engine HPs and the EPA Control Cost methodology
were used to develop the capital and annual cost for each of the
engines.  An equipment life of 10 years and an interest rate of 7
percent were used to estimate the indirect annual costs.  The 10 year
equipment life is consistent with the average life of control equipment.
 The fuel penalty associated with operating a CDPF was assumed to be
negligible.  The capital and annual costs were adjusted to 2008 dollars
using the Marshall & Swift Equipment Cost Index.

	The calculated annual cost for the CDPF was plotted against the engine
HP and the resulting graph showed a straight line relationship between
the annual cost and engine HP.  Therefore a linear regression was
performed using the calculated annual cost and the engine HP to develop
an equation that estimates annual costs when an engine HP is input into
the equation.  A summary of the calculated annual costs, graph, and
linear regression analysis is presented in Appendix A of this
memorandum.  The annualized cost equation for retrofitting a CDPF on a
CI engine was estimated to be:

CDPF Annual Cost = $11.6*HP + 1414

where;

HP = engine size in HP.

The linear equation has a correlation coefficient of 0.9897, which shows
the data fit the equation very closely.  Therefore, this equation was
used to estimate annualized cost for retrofitting CDPF for CI at major
and area sources.  

	For capital cost, a graph of the calculated capital cost and the engine
HP showed a straight line relationship between the two variables. 
Therefore a linear regression was performed using the calculated capital
cost and the engine HP to develop an equation that estimates capital
costs when an engine HP is input into the equation.  A summary of the
calculated capital costs, graph, and linear regression analysis is
presented in Appendix A of this memorandum.  The capital cost equation
for retrofitting a CDPF on a CI engine was estimated to be: 

CDPF Capital Cost = $63.4*HP + $5699

where;

HP = engine size in HP.

The linear equation has a correlation coefficient of 0.9897, which shows
the data fit the equation very closely.  Therefore, this equation was
used to estimate capital cost for CDPF for RICE at major and area
sources.

4.3	Open and Closed Crankcase Ventilation

	In diesel engines, the crankcase exhaust is either exhausted to the
atmosphere (open crankcase) or routed to the air intake to be used as
combustion air (closed crankcase).  Crankcase ventilation systems use
filtration or centrifugal force to remove oil mist and particulates from
the crankcase exhaust stream in both open and closed crankcase diesel
engines.  The OCV system is installed on diesel engines with open
crankcases, whereas the CCV system is installed on diesel engines with
closed crankcases.  The filtration or separator units used for both OCV
and CCV are the same and have essentially the same cost.  Therefore for
this analysis, it is assumed that the capital and annual cost of OCV and
CCV are the same.

	The cost of retrofitting an OCV on an existing CI engine was estimated
based on information obtained from a distributor of the OCV technology
(see Appendix B).  The distributor sells and installs three different
models of the OCV system and provided information on the installation
costs and maintenance required.  These models were applied to engine
sizes of 100, 150, 200, 300, 500, 750, 1,000, 1,250, and 1,500 HP to
estimate capital and annual costs using the EPA Control Cost
methodology.  An equipment life of 10 years and an interest rate of 7
percent were used to estimate the indirect annual costs.  The 10 year
equipment life is consistent with the average life of control equipment.
 The calculated annual cost and engine size were graphed and a straight
line relationship was observed.  A linear regression analysis was done
on the data set and the linear equation for annualized cost was;

OCV Annual Cost = $0.065*HP + $254

where;

HP = engine size in HP.

The linear equation has a correlation coefficient of 0.8154, which is
due to the same annual cost being calculated for several different sized
CI engines.  This is due to the fact that the same model OCV can be
retrofit on several different engine sizes, because the OCV are based on
the flow rate of the crankcase exhaust.  However, it is believed that
the equation represents a representative average annual cost of
retrofitting an OCV on a CI engine.    

	For capital cost, a graph of the calculated capital cost and the engine
HP showed a straight line relationship between the two variables. 
Therefore a linear regression was performed using the calculated capital
cost and the engine HP to develop an equation that estimates capital
costs when an engine HP is input into the equation.  A summary of the
calculated capital costs, graph, and linear regression analysis is
presented in Appendix A of this memorandum.  The capital cost equation
for retrofitting a OCV on a CI engine was estimated to be: 

OCV Capital Cost = $0.26*HP + $997

where;

HP = engine size in HP.

The linear equation has a correlation coefficient of 0.7920, where again
the capital cost was calculated to be the same for several different
sized CI engines.  However, it is believed that the cost equation
provides a representative estimate of the average capital cost of
retrofitting an OCV on a CI engine.

 

5.0	SUMMARY

The following table presents a summary of the costs for control devices
to reduce HAP emissions from stationary CI engines.  

Table 1.  Summary of Annual and Capital Costs Equations for CI HAP
Controls 

HAP Control Device	Annual Cost ($)	Capital Cost ($)

DOC	$4.99*HP + $480	$27.4*HP - $939

CDPF	$11.6*HP + $1414	$63.4*HP + $5699

OCV	$0.065*HP + $254	$0.26*HP + $997



Appendix A

Control Cost Summary and Linear Regression Statistics







Appendix B

Contact Report

  SEQ CHAPTER \h \r 1    

CONTACT REPORT

Date/Time	Project Name	Project Number

November 20, 2009  10:00pm	RICE NESHAP	MME-304



EC/R Originator	Contact	Phone Number

Bradley Nelson	Chuck Cook – Mid-Atlantic Engine Supply	(800) 257-8133

General Subject



The purpose of the telephone call was to discuss the feasibility of
retrofitting existing stationary diesel engines with an open or closed
crankcase ventilation system, and obtain equipment and installation
costs for the retrofit.  I spoke with General Manager of the company who
stated that their company had installed numerous open and closed
crankcase ventilation systems on both stationary and nonroad engines. 
He stated that the OCV and CCV systems are the same products with the
only difference being the installation kit needed to retrofit the unit. 
The OCV system is installed in the open crankcase ventilation port,
whereas the CCV is installed somewhere along the crankcase exhaust line
before it reaches the intake manifold.  He noted that engines that are
enclosed in a housing or other shelter emit an oil mist from the
crankcase that accumulates on the radiator and reduces the radiators
effectiveness in cooling the engine.  He noted that the Racor systems
they sell reduce oil mist emissions by 95% using a filtration system. 
The equipment costs for the systems are;

CCV4500 Series – Maximum Flow 10 CFM (< 160 HP diesel engines)        
 $500

CCV6000 Series – Maximum Flow 20 CFM (160-800 HP diesel engines)    
$600

CCV8000 Series – Maximum Flow 40 CFM (> 800 HP diesel engines)        
 $700

The filter needs to be replaced every 750 hours and the replacement cost
is $45 for the 4500, $50 for the 6000, and $60 for the 8000.  The
contact also stated it takes roughly 1-2 hours for installation,
therefore at $80 per hour, installation would cost roughly $160. 

 HYPERLINK
"http://www.maesco.com/products/racor/r_ccv_intro/r_ccv_intro.html"
http://www.maesco.com/products/racor/r_ccv_intro/r_ccv_intro.html  







 Risk Reduction Plan to Reduce Particulate Matter Emissions from
Diesel-Fueled Engines and Vehicles, California Environmental Protection
Agency, Air Resources Board, Stationary Source Division, Mobile Source
Control Division, October 2000.   HYPERLINK
"http://www.arb.ca.gov/diesel/documents/rrpapp.htm"
http://www.arb.ca.gov/diesel/documents/rrpapp.htm  

 EPA Air Pollution Control Cost Manual, Sixth Edition, January 2002,
EPA/452/B-02-001.

 Appendix IX, Risk Reduction Plan to Reduce Particulate Matter Emissions
from Diesel-Fueled Engines and Vehicles, California Environmental
Protection Agency, Air Resources Board, Stationary Source Division,
Mobile Source Control Division, October 2000.   HYPERLINK
"http://www.arb.ca.gov/diesel/documents/rrpapp9.PDF"
http://www.arb.ca.gov/diesel/documents/rrpapp9.PDF   

 Appendix IX, Risk Reduction Plan to Reduce Particulate Matter Emissions
from Diesel-Fueled Engines and Vehicles, California Environmental
Protection Agency, Air Resources Board, Stationary Source Division,
Mobile Source Control Division, October 2000.   HYPERLINK
"http://www.arb.ca.gov/diesel/documents/rrpapp9.PDF"
http://www.arb.ca.gov/diesel/documents/rrpapp9.PDF   

E C/R Incorporated	Providing Environmental Technical Support Since 1989



	

501 Eastowne Drive, Suite 250  (  Chapel Hill, North Carolina 27514

Telephone:  (919)484-0222  (  Fax:  (919) 484-0122

 PAGE  8 

  PAGE   \* MERGEFORMAT  12 

