Benefit-Cost Analysis – 15 MW Turbine
The owner of Fort Wainright’s privatized utility regularly proposes capital projects to meet the Army’s energy needs. The utility/contractor invests its capital in approved projects and is repaid over the life of the assets constructed. Guernsey was asked to provide a technical and economic consultation in this case – and saved the US Army approximately $25 million.
When a contractor proposed to install a 15 megawatt (MW) backpressure steam turbine at FWA’s coal-fired central heat and power plant (CHPP) at substantial cost to the Army – stating that the project would pay for itself via energy savings – we performed an independent technical/economic analysis of the project. We found that the contractor had used inaccurate data in its analysis and that only 7 MW of backpressure generation could be supported by FWA’s projected load growth.
Based on our findings, the government required the contractor to submit a revised analysis. Ultimately a lifecycle cost avoidance of approximately $25.6 million was realized and the government avoided a potentially embarrassing situation with the installation of a turbine with half of its capacity unavailable.