16nzec101 cost estimate

Andersen Power Electronic Solutions Ltd is registered in England No 04868897.Registered Office 7 Deanshill Close, Stafford, ST16 1BW, UK. VAT Registration Number 831 572534

Costing of Power Electronic Equipment forAlternative Transmission Augmentation intoAuckland.

Report prepared for the Electricity Commission,New Zealand, 2nd Draftby Dr B R Andersen, 29th December 2005

Andersen Power Electronic Solutions Ltd(AndersenPES)

7 Deanshill CloseStafford

ST16 1BWUnited Kingdom

Tel: +44-1785-256917Cell: + 44-7940-873808

Email: [email protected]

Andersen Power Electronic Solutions Ltd 29th December 2005Page i of 14

Cost and Power Loss Estimates prepared for the Electricity Commission, New Zealand

Table of Contents

1. INTRODUCTION..................................................................................................................................2

2. DETERMINATION OF PRICES...........................................................................................................2

3. POWER LOSSES ................................................................................................................................4

4. PRICE ESTIMATES FOR EQUIPMENT..............................................................................................4

4.1 COSTS NOT INCLUDED IN BUDGET QUOTES FOR TURNKEY SUPPLY ....................................................44.2 HVDC CONVERTER PRICES.............................................................................................................54.3 SVC EQUIPMENT ............................................................................................................................64.4 SYNCHRONOUS COMPENSATOR EQUIPMENT ....................................................................................64.5 SERIES CAPACITOR EQUIPMENT ......................................................................................................7

5. ESTIMATED POWER LOSSES ..........................................................................................................7

5.1 HVDC CONVERTER ........................................................................................................................75.2 SVC EQUIPMENT ............................................................................................................................75.3 SYNCHRONOUS COMPENSATOR EQUIPMENT ....................................................................................85.4 SERIES CAPACITOR EQUIPMENT ......................................................................................................8

6. CONCLUSIONS...................................................................................................................................8

7. REFERENCES.....................................................................................................................................8

APPENDIX A EQUIPMENT SPECIFICATIONS.......................................................................................9

Line Commutated HVDC Equipment ................................................................................................10Transmission SVC Equipment ...........................................................................................................11Synchronous Compensator Equipment .............................................................................................12Series Capacitor Equipment...............................................................................................................13

Andersen Power Electronic Solutions Ltd 29th December 2005Page 2 of 14

Preliminary Review of Transpower reports for New Zealand Electricity Commission

1. INTRODUCTION

Andersen Power Electronic Solutions Ltd (AndersenPES), is a UK based independent ConsultancyCompany, specialising in High Voltage Direct Current (HVDC) and power electronics for application inac transmission networks. AndersenPES has been commissioned by the Electricity Commission, NewZealand to provide estimates for cost and power losses for power electronic and certain otherequipment, which would be required as part of alternatives to the Grid Upgrade project, proposed byTranspower. The equipment for which information has been requested includes:

• HVDC Converter stations• SVCs• Synchronous Compensation• Series Compensation

As part of this assignment AndersenPES has been provided with copies of the following reports:

Alternative Transmission Augmentation into Auckland – Preliminary Capital Cost Estimates, version 2,November 2005, prepared by Parsons Brinkerhoff Associates Ltd, Wellington, NZ. (Reference[1.])

Transmission Augmentations into Auckland: Comparison of Transpower’s Proposal and Short-listedAlternatives, Draft Rev 4, 11 December 2005. (Reference [2.])

Cost estimates have been provided based on information from manufacturers and by reference to otherprice information received by AndersenPES in connection with other projects.

2. DETERMINATION OF PRICES

The Electricity Commission provided information to AndersenPES concerning the rating of equipment.This information was used to produce mini-specifications for the equipment. The mini-specifications areattached in Appendix 1.

Equipment for seismic areas tends to be more costly than equipment for non-seismic areas. Therefore,it was felt to be important that a seismic duty was included in the mini-specifications. The ElectricityCommission requested that the equipment specifications were generic, rather than site specific, andrecommended that IEEE 693:1993 be quoted in place of the New Zealand Seismic Standard forelectrical equipment. In view of the high level of seismic activity in New Zealand, it was decided to statethat the stresses would be equivalent to those experienced in the Los Angeles area.

The mini-specifications were sent to manufacturers with a request for submission of budget prices. Theenquiries were sent to 4 manufacturers, three of whom provide HVDC, SVC and Series compensationequipment, and one of whom provide series compensation and synchronous compensators. Theresponses received have been analysed, and compared with other information received earlier in 2005in connection with other projects.

No responses were received in respect of pricing of synchronous compensators. It seems thatsynchronous compensators are provided as specials, and that a price database for budget quotations isnot available. Therefore, prices in this document have been based on information received byAndersenPES in connection with two projects, one in Scotland and one in Namibia.

The CIGRE document “Economic Assessment of HVDC Links”, Brochure No 186, published in June2001 was also used as a reference during this assignment [3.].

It should be noted that budget prices obtained against non-specific project information are subject to alarge margin of uncertainty. Factors that may have a significant impact on the price of equipment, and

Andersen Power Electronic Solutions Ltd 27 February 2006Page 3 of 14

Cost Estimates for New Zealand Electricity Commission

which therefore can make actual tendered prices significantly different from those obtained in responseto a request for budget prices, include:

• Whether the specification is functional or prescriptive concerning the detailed implementation. Theprices in this document assume a functional specification for a turnkey project. For other types ofspecifications the cost could be up to 5-10% higher depending on the amount of changes themanufacturer would have to make relative to his standard design.

• The local cost level, which impacts the cost of locally supplied equipment and services, and thecost of local project and site management, commissioning and post contract support services. Forthis project average local costs have been assumed. For a high cost area the price increase couldbe up to 5%.

• The power loss capitalisation figure, i.e. the cost of no-load losses and full load power losses. TheElectricity Commission has provided a loss capitalisation figure of NZ$2700/kW, which is relativelylow compared with the values used in Europe and other places with high reliance on oil, coal orgas. The power loss capitalisation figure is used by manufacturers to optimise the balancebetween capital cost and power losses. With low power loss capitalisation the optimum solutionwill tend to have lower capital cost and higher power loss.

• The site ground conditions (impacts the cost of the civil works). Ground conditions with poor loadbearing capability would tend to increase the cost. Poor ground conditions could add up to 5% tothe overall cost.

• Specific data for the ac network (impacts the design of ac harmonic filters and reactive powercompensation). If the harmonic distortion level in the ac network is already near the permissiblelevel, then filtering is more difficult, and additional costs would be incurred. Additional costs couldbe up to 5% of the overall costs for an HVDC scheme and about 2% for a SVC. If the ac networkswere relatively weak at the point of connection of the equipment additional measures would haveto be taken to reduce the size of switchable reactive power banks or even to provide dynamicreactive power compensation. Based on the information provided in Ref [2.] the ac networks arerelatively strong and no allowance needs to be made for additional costs.

• Environmental constraints (e.g. audible noise, visual appearance of station, including the height ofequipment). The prices provided in this document do not assume stringent environmentalconstraints. If the audible noise levels are very low (say 40dB(A) or lower at the boundary fence),then additional costs would be incurred to reduce the noise level at source and to provideadditional attenuation. The additional cost of noise attenuating measures could be up to 2% or theoverall cost for an HVDC scheme or SC and up to 5% for a SVC. Reducing the visual impact of aconverter station could incur additional cost of 2-5%, depending on the requirements.

• Transport constraints (may determine the transformer arrangement, i.e. single-phase or three-phase design). For the purpose of this report it has been assumed that there are no transportconstraints. The additional cost of subdividing the converter transformers into single-phase, 2winding units rather than single phase, 3 winding units could be up to 5%.

• Spares requirements, in particular whether or not spares are required for large items such astransformers and reactors. If spares are required for transformers the most economic solutionmay be the provision of single-phase units, rather than 3-phase units.

• Commercial Terms and Conditions, including special conditions such as Bonds and the penaltiesfor delays, power loss, Reliability and Availability. For the purpose of the estimates below typicalTerms and Conditions were briefly outlined in the mini-specifications.

The general price level of an equipment will also depend on the competitive situation in the marketplace, e.g. during periods of few projects price levels are likely to fall.

Changes in legislation, e.g. tightening of environmental constraints or lowering of impact levels, such asreducing the acceptable magnitude of magnetic fields, can result in significant increases of prices.

Finally, technological developments can also result in significant changes to prices. Usually, suchdevelopments will result in a reduction in prices.



3. POWER LOSSES

Typical power loss values for the equipment will normally be provided at the budget phase, sincespecific information about the detailed implementation is unlikely to be available. For equipment such asHVDC converters, synchronous compensators and series capacitor installations, the typical values willbe reasonably representative of those for the ultimate installation, subject to variations caused by thecapitalisation value used for the power loss. As discussed above, high capitalisation values for powerloss tend to result in higher capital costs and lower power loss, than would a lower capitalisation valuefor power losses.

For SVCs the power loss capitalisation values may have a significant impact on the implementation ofthe SVC. In most cases the SVC is operated near its float condition (zero output) during normal systemconditions, and the weighting of the power loss capitalisation over the full operating range is biasedtowards applying a higher value to the power loss at float. The design of the SVC can be optimised tominimise the loss in this area, particularly if the power loss capitalisation value is high. This can be doneby introducing Thyristor Switched Capacitors (TSC) within the SVC, such that the Thyristor ControlledReactor (TCR) part does not need to back off a large ac harmonic filter or shunt capacitor bank in thefloat condition. The TSC increases the capital cost of the SVC, compared to a simpler SVC with a fixedfilter/shunt capacitor and a TCR. For the purpose of this report it is assumed that the ±100Mvar SVC isimplemented using one filter, one TCR and one TSC. Similarly, the +300Mvar SVC is assumed to beimplemented as one filter, one TCR and two TSCs.

Note that to determine the total power loss at a given operating point it is necessary to add the no-loadand the load power loss.

4. PRICE ESTIMATES FOR EQUIPMENT

The price estimates provided in this report will be given as the range received in response to the mini-specifications, as well as the price, which AndersenPES suggests should be used for any furtherevaluation. The latter price takes into account not only the budget quotes received, but also informationreceived by AndersenPES in connection with other recent and relevant projects.

In this report the following exchange rates have been used:

1 Euro = 1.74 NZ$1 US$ = 1.47 NZ$

4.1 COSTS NOT INCLUDED IN BUDGET QUOTES FOR TURNKEY SUPPLY

Budget prices provided by manufacturers for the turn-key supply of equipment do not include costssuch as:

• The Owner’s own engineering and project management costs,• The cost of Public Enquiries and other planning activities,• The cost of the procurement and preparation of the land area,• The cost of access roads,• The provision of services (e.g. auxiliary power, potable water, sewage and surface water

drainage),• The cost of Operation and Maintenance,• Taxes and other duties,• Owners insurance etc.

Some of these costs would also be incurred in case of the implementation of an ac overhead lineproject.



The cost of the above items would vary significantly from project to project and between differentnetwork owners. AndersenPES has no knowledge of the local cost of these activities for projectsundertaken by Transpower in New Zealand. The Electricity Commission has requested thatAndersenPES provide guidance on some of these costs. The estimates below should be treated withcare, as the actual costs and time will depend on the procedures used within Transpower and theknowledge/experience base from which the work is done. The estimates have been made assumingthat AndersenPES were to undertake the work using skilled associates wherever required.

The Owner’s cost of engineering and project management should allow for the following activities:• Studies prior to writing the specification. These studies are required to define the rating and design

requirements for the equipment to be specified, and the impact, which the equipment may have onother parts of the network and its operation. AndersenPES estimates that 4 man-months would berequired for the activities associated with an HVDC, SVC or SC. A shorter time of 2 months may besufficient for a SCO project. It should also be noted that if several components are used for theupgrade project, then the total time required for the studies will be less than the sum of theindividual studies, since set-up time will be reduced and some studies will be common.

• Specification writing, management of the Tendering Process, Tender evaluation and Contractnegotiations. AndersenPES estimates that 12 to 18 man-months would be required for thisprocess for an HVDC project, 9 to 13 man-months for a SVC and 8 to 12 man-months for a SC orSCO.

• Project Implementation. AndersenPES estimates that on average during the project execution theOwner’s project manager would spend 75%, 50% and 33% of his time on a HVDC, SVC andSC/SCO project respectively. This estimate does not include the commercial support for handling ofinvoices and payments. The owner would require 2 engineers/representatives at each site full timeduring site activities. Engineering support required during project execution would require onaverage 2 engineers. During site testing and commissioning the Owner’s engineering andmaintenance support at each site would be a minimum of 5 people. In the period after project hand-over the project manager, 1 engineers and 2 maintenance engineers per site should be assumed tobe required for resolving of snagging list and other early issues. The duration for such activitiesshould be assumed to be 6 months for an HVDC project, 4 months for an SVC project and 2months for an SCO/SC.

In the opinion of AndersenPES, the cost of Public Enquiries is likely to be similar for each location andfor each installation. Thus the cost of the Public Enquiry is likely to be approximately twice as high forthe two HVDC converter stations, as it would be for a SVC, SC or SCO installation. The cost of thepublic enquiry for a HVDC overhead line is likely to be slightly less than that for a HVAC overhead line,because the HVDC towers would be lower and have less visual impact than a 400kVac line.

The land area for an HVDC converter station would be approximately 7 times as large as the land areafor a ±100Mvar or +300Mvar SVC, and approximately 10 times as large as an SCO or SC installation.

The price estimates also assume that Terms and Conditions will be reasonable, based on FIDIC or othersimilar internationally recognised Conditions, with relatively few modifications.

4.2 HVDC CONVERTER PRICES

The turnkey price for two converter stations are estimated to be:

For a monopolar 500MW, 350kVdc scheme budget prices ranged from NZ$ 122 to 200 Million,Suggested average NZ$150 Million.

For a monopolar 700MW, 350kVdc scheme budget prices ranged from NZ$ 151 to 231 Million,suggested average NZ $180 Million.



In both cases, two of the budget prices were relatively close near the bottom end of the range.Therefore, it seems justified to suggest an average price closer to the lower end, a suggestion which isalso supported by other information available to AndersenPES.

The price included in CIGRE Brochure 186, Reference [3.], for a monopolar 500MW, 500kVdc HVDCscheme is US$ 180/kW, resulting in a price of NZ$ 132 Million, using today’s exchange rate (1US$ =1.47NZ$). For a scheme voltage of 350kVdc a slightly lower price would be expected, reflecting thefewer thyristor levels required in the thyristor valves. The price reduction would be up to 5%. However,the price should also be adjusted for inflation in the 5 years between 2000 and 2005, and for the changein this period of the exchange rate of the US$ compared to the Euro, which is now the base currency forthe HVDC manufacturers.

The costs quoted for the HVDC options in Reference [1.] are inclusive of the costs of the HVDCoverhead line and/or cables, and cannot be compared with the above estimate. It is believed that theElectricity Commission has a breakdown of the estimates in Reference [1.], which may enable a furthercheck on the estimates provided in this current report.

When expanding the system to a bipolar scheme, it is necessary to add not only an additionalmonopole, which is similar to the existing monopole, but also the following equipment:

• Bipole control equipment (to co-ordinate the operation of the two monopoles, minimising thecurrent in the metallic return and improving performance in the event of a failure of one of themonopoles.)

• Additional dc switchgear to enable various operating modes, e.g.• temporary earth return operation (if a permanent metallic return is not provided),• transfer of operation from earth return mode to metallic return mode,• rapid bypass of converters, to enable bipolar operation to be transferred immediately to

monopolar metallic return operation,• Additional dc switchgear to enable maintenance of one pole with the other in service.

The cost of the equipment required to create a bipolar system from two monopolar systems is estimatedto be NZ$ 3.5 Million.

4.3 SVC EQUIPMENT

It is assumed that the ±100Mvar SVC is implemented as one TCR, one TSC and one ac harmonic filter.

It is assumed that the +300Mvar SVC is implemented as one TCR, two TSCs and one ac harmonic filter.

The turnkey price for the two SVC ratings are estimated to be:

• ±100Mvar SVC connected at 220kVac substation: budget prices ranged from NZ$ 12.2 to 14.6Million, Suggested average NZ$14 Million.

• 0/+300Mvar SVC connected to 220kVac substation: budget prices ranged from NZ$ 19.1 to 24.4Million, Suggested average NZ$ 20.5 Million.

These prices can be seen to be lower than those given in Reference [1.]

4.4 SYNCHRONOUS COMPENSATOR EQUIPMENT

The turnkey price for a 100MVA Synchronous Compensator is estimated to be NZ$ 18 Million. This pricecan be seen to be lower than that given in Reference [1.]



4.5 SERIES CAPACITOR EQUIPMENT

The range of turnkey prices for a 272MVar Series Capacitor were from NZ$ 7 to NZ 7.3$ Million. Thesuggested average is NZ$ 7.25 Million.

5. ESTIMATED POWER LOSSES

5.1 HVDC CONVERTER

The power loss in HVDC overhead lines and cables are not included in the following figures.

The total No Load power loss for two converter stations are estimated to be:

• For a monopolar 500MW, 350kVdc scheme: 0.25% of rating or 1.25MW


The total Full Load power loss for two converter stations are estimated to be:



5.2 SVC EQUIPMENT

It is assumed that the ±100Mvar SVC is implemented as one TCR, one TSC and one ac harmonic filter.

It is assumed that the +300Mvar SVC is implemented as one TCR, two TSCs and one ac harmonic filter.

The no load loss (i.e. the power loss when the SVC is operating at the float, i.e. 0Mvar) condition for the±100Mvar SVC is estimated as 200kW.

The no load loss (i.e. the power loss when the SVC is operating at the float, i.e. 0Mvar) condition for the+300Mvar SVC is estimated as 650kW.

The full load power loss when operating in lagging (absorption) mode for the ±100Mvar SVC isestimated as 1000kW.

The full load power loss when operating in lagging (absorption) mode is not relevant for the +300MvarSVC.

The full load power loss when operating in leading (generation) mode for the ±100Mvar SVC isestimated as 800kW.

The full load power loss when operating in leading (generation) mode for the +300Mvar SVC isestimated as 2400kW.



5.3 SYNCHRONOUS COMPENSATOR EQUIPMENT

The no load power loss for a 100MVA Synchronous Compensator is estimated to be 1.3MW, assumingthat the machine is operated at synchronous speed for this condition.

The full load power loss for a 100MVA Synchronous Compensator is estimated to be 1.8MW

5.4 SERIES CAPACITOR EQUIPMENT

The no load power loss (i.e. the power loss at no through current) for a series capacitor installation isvery small, consisting primarily of the auxiliary power requirement for control and protection. The noload power loss for a 272Mvar series capacitor is estimated to be less than 2kW.

The full load power loss (i.e. the power loss at rated throughput current) for the series capacitor isestimated to be less than 100kW.

6. CONCLUSIONS

This report has provided cost and power loss estimates for HVDC schemes, SVCs, SynchronousCompensators and Series Capacitors, that may be required for alternative transmission augmentationsinto Auckland.

It should be noted that the price estimates are subject to relatively large tolerance, expected to be ±15%,as a detailed design of the equipment has not been carried out. Such a detailed design would result inan optimised solution, taking into account the specific performance requirements and the losscapitalisation factors applicable to the project.

Dr B R AndersenDirector,Andersen Power Electronic Solutions Ltd.

7. REFERENCES

[1.] Alternative Transmission Augmentation into Auckland – Preliminary Capital Cost Estimates, version

2, November 2005, prepared by Parsons Brinkerhoff Associates Ltd, Wellington, NZ.

[2.] Transmission Augmentations into Auckland: Comparison of Transpower’s Proposal and Short-listed

Alternatives, Draft Rev 4, 11 December 2005.

[3.] Economic Assessment of HVDC Links, CIGRE Brochure 186, June 2001



APPENDIX A EQUIPMENT SPECIFICATIONS

HVDC Equipment

SVC Equipment

Synchronous Compensator Equipment

Series Capacitor Equipment



Line Commutated HVDC Equipment

General Information

AC Connection Voltage: 220kV

AC System Minimum Short Circuit Level at point of connection: 1500MVA (2000MVA for700MW option)

AC System Maximum Short Circuit Level at point of connection: 12,000MVA

Maximum Ambient Temperature: 35° C

Minimum Ambient Temperature: -10° C.

The equipment will be installed in a seismically active area. The equipment should bedesigned according to IEEE 693 and as if it were to be installed in the Los Angeles area.

Terms and conditions shall be assumed to be FIDIC. Special Terms and Conditions willinclude Reliability & Availability guarantees, Power Loss guarantee, guarantees for reactivepower capacity. Penalties will be applied to late deliveries. The total cap for all damages shallbe assumed to be 10%. Cashflow shall be assumed to be neutral.

HVDC System Specification:

Overhead line HVDC scheme with a transmission distance of 200km. HVDC filters shall besupplied. The HVDC line is not included in the scope of supply.

Turnkey supply of converter stations, including 220kV double circuit ac busbars, which shall beconnected to the double circuit busbars of an existing ac substation. Scope of supply includessystem studies and design to final commissioning and hand over for all electrical andmechanical plant from the HVDC line terminating tower to the existing ac substation busbarsand all associated civil works and services.

The scheme shall be capable of operating at approximately unity power factor. It shall beassumed that 4 breaker switched filter banks will be necessary in order to meet reactive power,harmonic performance and voltage step requirements

The scheme rating as measured at the inverter ac busbar shall be 500MW, 350kVdcmonopolar metallic return.OrThe scheme rating as measured at the inverter ac busbar shall be 700MW, 350kVdcmonopolar metallic return.



Transmission SVC Equipment

General Information

AC Connection Voltage: 220kV

AC System Minimum Short Circuit Level at point of connection: 800MVA

AC System Maximum Short Circuit Level at point of connection: 12,000MVA





Transmission SVC Specification:

Turnkey supply of SVC, including switchgear for connection to the double circuit busbars of anexisting ac substation. Scope of supply includes system studies and design to finalcommissioning and hand over for all electrical and mechanical, and associated civil works andservices.

Two different Transmission SVCs are envisaged:

• ±100Mvar SVC connected at 220kVac substation.

• 0/+300Mvar SVC connected to 220kVac substation.



Synchronous Compensator Equipment

General Information

AC Connection Voltage: 220kVac busbar.

AC System Minimum Short Circuit Level at point of connection of Synchronous Compensator:500 MVA

AC System Maximum Short Circuit Level at point of connection of Synchronous Compensator:12,000 MVA





Synchronous Compensator Specification:

Turnkey supply of Synchronous Compensator, including switchgear and transformer forconnection to the 220kV double circuit busbars of an existing ac substation. Scope of supplyincludes system studies and design to final commissioning and hand over of all electrical andmechanical plant, and associated civil works and services. The Synchronous Compensatorshall be equipped with a Variable Speed Drive to enable bumpless start up.

The rating of the Synchronous Compensator shall be 100 Mvar.



Series Capacitor Equipment

General Information

AC Connection Voltage: 220kVac busbar.

AC System Maximum Short Circuit Level at point of connection of series capacitor: 12,000MVA





Series Capacitor Specification:

Turnkey supply of a fixed impedance Series Capacitor, including bypass switches and otherswitchgear for connection to a 220kV single circuit ac line. The Series Capacitor shall beequipped with all necessary protection, as required. Scope of supply includes system studiesand design to final commissioning and hand over of all electrical and mechanical plant, andassociated civil works and services.

Two Series Capacitors, each with a rating of 272 Mvar will be required. The series capacitorswill be installed at the same site in the lines of a double circuits 220kV ac overhead line.

16nzec101 cost estimate

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