Piotr Czerwiński30th October 2012

Economic Justification of a Steam Turbine Retrofits

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 2Economic Justification of Steam Turbine Retrofits

Agenda

Introduction to Retrofitting Page 3

Alstom Portfolio for Retrofit Solutions Page 8

Economic Aspects of Steam Turbine Retrofits Page 18

Summary Page 28

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 3Economic Justification of Steam Turbine Retrofits

Introduction to Retrofitting

What is a Retrofit Project?

Retrofitting Improved Performance Lower Emissions

- The replacement of existing equipment specifically to improve performance.

- By applying many of the design elements and principles Alstom use in new equipment, performance levels can approach modern standards

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 4Economic Justification of Steam Turbine Retrofits

Introduction to Retrofitting

Drivers for Retrofit

An approach is needed that will simultaneously address power uplift, reliability, life extension & emissions control

Technical

• Increasing demand for performance

• Increased maintenance intervals

• Plant life extension• Change of fuel

Financial

• Increasing demand for electricity

• Lower operational & maintenance costs

• Increasing fuel costs

• Improved revenues

Regulatory

• Environmental & emissions control

• Security of energy supply

• Approval constraints

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 5Economic Justification of Steam Turbine Retrofits

Introduction to Retrofitting

Possibilities for Investments

• Life Time Extension (LTE): „one to one” replacement of components

• Component Upgrade: Improvement of components during normal service activities to increase power output, efficiency, reliability

• System optimisation: Leverage potentials of components of a system to improve power output, efficiency and operational flexibility

• Component Retrofit: Improvement of efficiency and power output (major investment) of components

• System Rehabilitation: − combining LTE measures, upgrades and retrofits of different

components to an integrated plant optimisation (Integrated Solution)− integration of new fuels

• Plant Replacement (new power plant)

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 6Economic Justification of Steam Turbine Retrofits

Introduction to Retrofitting

Overhauling or Retrofitting

RetrofitOverhaul

− Restoration of original operational properties

− Minor performance increase− Risk of damages remains, more

expensive overhauls in the future and shorten period between major overhauls

− Limited possibility of equipment lifetime prolongation

− Considerable improvement in turbine performance

− High operational reliability up to end of turboset lifetime

− Time between main overhauls increased to 100 000 hours

− Higher competitiveness of power generation

− Reduction in gases emission (especially CO2 and NOX)

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 7Economic Justification of Steam Turbine Retrofits

Agenda

Introduction to Retrofitting Page 3

Alstom Portfolio for Retrofit Solutions Page 8

Economic Aspects of Steam Turbine Retrofits Page 18

Summary Page 28

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 8Economic Justification of Steam Turbine Retrofits

Alstom Portfolio for Retrofit Solutions

Technology – Steam Path design

Reaction Technology (RTB)• Pressure drop across fixed & moving blades

• Typically higher number of blades per row

• Drum rotor construction

Impulse Technology (ITB)

• Pressure drop across fixed blades

• Typically fewer blades per row with larger blade chords

• Disk and Diaphragm construction

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 9Economic Justification of Steam Turbine Retrofits

Alstom Portfolio for Retrofit Solutions

Each Project is Unique!

• Consideration of the specific Customer’s needs

• When evaluating the benefits of retrofitting, each project will be unique with its own combination of market and local factors to consider

• Identification of the best solution

• Today’s market requires

— Bespoke innovative solutions

— State-of-the-art technology catering for a wide range of application possibilities

— Reliable project execution and installation

— Sustained high performance operation

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 10Economic Justification of Steam Turbine Retrofits

Alstom Portfolio for Retrofit Solutions

Retrofit Projects – Alstom approach

• Assessment of current condition of the Power Plant

− questionnaires

− ECO|RAMTM

− STEP|XTM

• Definition of drivers for retrofit project

• Retrofit products

• Technical-economical analysis

• Technical and commercial offer

• Project execution

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 11Economic Justification of Steam Turbine Retrofits

Introduction to Retrofitting

Alstom Seemless Portfolio for Modernization Solutions

Technical Condition of the Unit

Technical Condition of the Unit

Overhaul Overhaul

RepairRepair

Integrated RetrofitIntegrated Retrofit

RetrofitRetrofit

ModernizationModernization

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 12Economic Justification of Steam Turbine Retrofits

Alstom Portfolio for Retrofit Solutions

Possibility to reuse existing elements• Replacement of some components and revitalization of elements

operating in high temperatures:− HP and/or IP casings− valve chests.

revitalizationpossible

L21HMF after 200 000h

revitalizationnot possible

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 13Economic Justification of Steam Turbine Retrofits

Alstom Portfolio for Retrofit Solutions

Modernization packages - example for 200 MW turbineM01 Oil system

modernization

M02 Forced turbine cooling system

M03 Modernization of control system

M04 HP and LPbypass systems

M05 Modernization of gland steam system

M06 Control system modernization: Binary control and starting automatics

M07 Electrohydraulic control systemof IP-LP bypass system

M08 Modernization of jacking oil system

M09 HP stop valve chestmodernization

M10 Modernization ofHP control valves

M11 Individual actuators of HP control valves

M12 Modernization ofIP control valves

M13 Cooling of LPcasing

M14 Holes for endoscopeinspection

M15 Adaptation for process steam and heat extraction

M16 Hydraulic prestress of casing bolts

M17 Improved HP ITBblading system

M18 Improved IP ITBblading system

M19 LP diaphragm modernization

M20 Pedestalsmodernization

M21 Control system modernizationMeasurement:sensor assembly data transmission and visualization

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 14Economic Justification of Steam Turbine Retrofits

Alstom Portfolio for Retrofit Solutions

Retrofit solutions - example for HP part of 200 MW turbine

power output increase 3,0 MW power output increase 6,0 MW

upgrade inner moduleretrofit

power output increase 8,0 MW

full moduleretrofit

Solutions:• optimised for nominal or partial loads• reaction or impulse technology• reusage of components which are in

sufficient condition• prepared for „step by step” philosophy

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 15Economic Justification of Steam Turbine Retrofits

Alstom Portfolio for Retrofit Solutions

Retrofit solutions - example for 200 MW turbine

power output increase up to 8 MW power output increase up to 3,5 MW

HP full module IP full module

power output increase up to 12 MW

LP retrofit Solutions:• optimized for nominal or partial loads• reaction or impulse technology• reusage of admission systems or new

systems delivered• optimized for specific cooling water

temperature • prepared for „step by step” philosophy

Solutions with differentlast stage blades possible:

• 33 inch• 37 inch• 41 inch• 43 inch

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 16Economic Justification of Steam Turbine Retrofits

Alstom Portfolio for Retrofit Solutions

Interactions with other equipment - area for optimization

• Boiler− changed live steam flow− changed steam parameters (pressures, temperatures)− feed water temperature− sprays into reheater

• Generator and Transformer− maximal active power output that can be transferred

• Condenser− optimal selection for LP last stage blades

• „Plant products” implementation− steam temperature control− cold end performance− solar boost

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 17Economic Justification of Steam Turbine Retrofits

Agenda

Introduction to Retrofitting Page 3

Alstom Portfolio for Retrofit Solutions Page 8

Economic Aspects of Steam Turbine Retrofits Page 18

Summary Page 28

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 18Economic Justification of Steam Turbine Retrofits

Economic Aspects of Steam Turbine Retrofits

Investment Decision Process

• Operational problems of existing unit

• Possible modernization / retrofit solutions

• Benefits from modernization / retrofit solutions

• Costs of different modernization / retrofit solutions

• Risk assessment

• Financial measures

Any investment decision is based upon some sort of analysis of costs and benefits

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 19Economic Justification of Steam Turbine Retrofits

Economic Aspects of Steam Turbine Retrofits

Retrofit Benefits

• Extended lifetime

• Increased efficiency

• Reduced fuel input

• Additional capacity

• Improved load factors

• Improved reliability and availability

• Reduced maintenance

• Compliance with the newest national regulations (emission reduction, etc.)

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 20Economic Justification of Steam Turbine Retrofits

Economic Aspects of Steam Turbine Retrofits

Cost of Retrofitting• Equipment costs

— design, manufacture, delivery, technical field advice for installation• Installation costs

— labor, materials, additional outage time / lost generation• Project management costs

— progress meetings, inspections etc.

• Risk assessment— late delivery— benefits not achieved— equipment does not fit— failure of new components

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 21Economic Justification of Steam Turbine Retrofits

Economic Aspects of Steam Turbine Retrofits

Financial measures

• Specific first cost (kEuro/MW)

— advantage: simplicity

— disadvantage: it fails to take into account the time value of money

• Net Present Value (NPV)

— advantages: the method takes account of the time value of moneythe method takes account of all relevant cash flowsthe method provides a clear decision rule concerningacceptance/rejection of a project

— disadvantage: NPV does not allow a simple comparison of projectsusing a single number

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 22Economic Justification of Steam Turbine Retrofits

Economic Aspects of Steam Turbine Retrofits

Financial measures

• Internal Rate of Return (IRR)

— advantages: the method allows the simple prioritization of projectsreporting simplicity

— disadvantage: IRR and NPV can give different prioritization ofprojects

• Payback time

— Simple payback ignores the time value of moneyignores any benefits that occur after the payback period

— Payback takes account of the time value of moneyignores any benefits that occur after the payback period

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 23

Weighted Power Output

cbaPcPbPa

P el3el2el1wel

Economic Justification of Steam Turbine Retrofits

Economic Aspects of Steam Turbine Retrofits

Assumptions for simplified economic analysis

Load profiles Heat Rate characteristics

Weighted Heat Rate improvement

Pel1

Pel2

Pel3

power output

Mon Tue Wed Thu Fri Sat Sun Pel1 Pel2 Pel3

Before RetrofitAfter Retrofit

Power Output Pel1 Pel2 Pel3

Weighted factor a b c

Heat Rate improv. ΔHR1 ΔHR2 ΔHR3

Weighted factor a b c

cbaΔHRcΔHRbΔHRa

ΔHR 321w

ΔHR1

ΔHR2ΔHR3

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 24Economic Justification of Steam Turbine Retrofits

Economic Aspects of Steam Turbine Retrofits

Benefits coming from Heat Rate improvement

Coal

sav

ings

[ton

s/ye

ar]

CO2

emiss

.red

uc. [

tons

/yea

r]SO

2em

iss.r

educ

. [to

ns/y

ear]

Emission Reduction Through Retrofitting

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 25Economic Justification of Steam Turbine Retrofits

Economic Aspects of Steam Turbine Retrofits

Financial measures – Overhaul versus Retrofit

0

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 26Economic Justification of Steam Turbine Retrofits

Economic Aspects of Steam Turbine Retrofits

Comparison of different investments

Coal saving and CO2 reduction

Additional energy sold

1

2

3

4

5

6

Net

Pre

sent

Val

ue a

fter 2

5 ye

ars

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 27Economic Justification of Steam Turbine Retrofits

Agenda

Introduction to Retrofitting Page 3

Alstom Portfolio for Retrofit Solutions Page 8

Economic Aspects of Steam Turbine Retrofits Page 18

Summary Page 28

© ALSTOM 2012. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.

P 28Economic Justification of Steam Turbine Retrofits

Economic Justification of a Steam Turbine Retrofit

Summary

• The economic justification of any investment is an important milestone that should be undertaken thoroughly to understand full picture

• Assessment of the features and benefits provided by a retrofit and their economic evaluation enables proper selection of an investment

• Throughout the process, however, it is essential to assess and manage the various risks

• ALSTOM is perfectly positioned to help our Customers find the optimal retrofit solutions

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