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Modeling New Coal Projects: Supercritical or Subcritical? - Power En... https://www.power-eng.com/articles/print/volume-110/issue-11/depar...
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Decisions made on new-build coal-fired plants are

driven by several factorsemissions, fuel logistics and
electric transmission access all provide constraints. In
most cases, capacity and technology are the areas
where the greatest decision-making freedom exists. The
crucial economic decision whether to build supercritical
or subcritical units often depends on assumptions
concerning the reliability/availability of each technology,
the cost of non-fuel operations including maintenance,
the generation efficiencies and the potential for
emissions credits at some future value. Modeling the
influence of these key factors requires analysis and
documentation to assure the assets actually meet the
projected financial performance. This article addresses
some of the issues related to the trade-offs that have the
potential to be driven by the supercritical/subcritical
decision.
Solomon Associates has been collecting cost,

generation and reliability data on coal-fired power
generating assets for approximately 10 years using a
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analysis and models of new plants.
Future uncertaintyor riskin pro forma analysis may exist

for generating companies regardless of their operational
history. Companies with supercritical unit operations and
maintenance experience have few concerns in terms of
operator training, maintenance programs and other
support systems. Additionally, they have data for their
own supercritical units that can be used for financial
models on the next supercritical unit(s) built.
However, one of the biggest concerns an experienced

supercritical asset owner might have is the corporate
memory of the workforce and the potential for losing
substantial supercritical operating and maintenance
experience over the next few years due to employee
retirements. For generating companies that are
considering building their first supercritical unit with no
prior operating and maintenance experience and no
prior enterprise cost and performance data in-house,
expected ranges for these important project criteria can
be important questions to consider.
A substantial, industry-wide database cannot be

substituted for the operator training programs and
procedures necessary to operate supercritical
technology, but it can provide better information for the
reliability/availability expectations and cost performance
of the new units. Even experienced supercritical
operators have a potential benefit in comparing their
own supercritical fleet’s historic performance records
with broader industry data rangesnot only to prove the
possible cost and performance range, but also to look
for opportunities to enhance their future performance.
Since supercritical technology has a clear efficiency

advantage, how can that efficiency be maximized in
terms of reliability/availability performance, total cash,
total cash less fuel and maintenance cost components?
More importantly, what can be economically tolerated?
Reliability/availability performance depends on total
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To provide insight, Solomon compiled performance and

cost data to create representative subcritical and
supercritical generating unit peer groups, with 17 units in
each. The datasets contain units with similar capacity,
fuel, emissions and operating characteristics. Based on
this data, Solomon explored the relationships and
differences between performance in the two
technologies for relevant metrics, including reliability and
commercial unavailability, operating and maintenance
costs and efficiency-based fuel cost advantages. The
findings are presented below, followed by a discussion
of a pro forma technology risk model developed to
quantify variation in the technologies’ performance.
In this analysis, Solomon has made some statistical

performance comparisons including mean, range and
key percentile values for each indicator. When using
data for a pro forma financial model or to compare
against existing units, the first measure commonly
evaluated is the mean or average. We look at the 10th
and 90th percentiles to get a better sense of the
variability of values that occur in the key measures.
Finally, Solomon looks at how the means and the
dataset ranges compare for the two technologies, to see
if there are characteristic performance differences or
limits between the two groups.
The IEEE’s Equivalent Unavailability Factor (EUF) and

Solomon’s Commercial Unavailability Index (CUI) are
metrics that provide valuable insight into the market
performance of any generating unit, and are similarly
interesting within the subcritical versus supercritical
trade-off framework.
EUF is an overall reliability indicator that accounts for

planned and unplanned maintenance optimization,
including derates for planned or unplanned maintenance
on unit components.
CUI provides an important indication of the monetary
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greater percentage of the higher-market- price periods

than lower-margin periods, CUI will be correspondingly
high.
Table 1 presents the industry average EUF and CUI, as

well as the 10th, 25th, 50th, 75th, and 90th percentiles
of performance for subcritical and supercritical peer
groups.
As shown in Table 1, industry-wide data indicates that

average EUF for the supercritical peer group is higher
than for the subcritical peer group by 1 percent (14.3
percent vs 13.3 percent), or a little more than three days
of additional downtime per year. However, the 10th to
90th percentile EUF performance range is about 39
percent smaller for the supercritical than for the
subcritical units (11.5 vs 18.9). It is reasonable to
surmise that the smaller range for supercritical units may
be driven by asset owners who recognize the efficiency
advantage of the supercritical units and place more
emphasis on keeping those units available for the
market.
With respect to CUI, Table 1 shows that the computed

average CUI has a slightly higher mean for the
supercritical peer group than for the subcritical, (12.1 vs
11.8) but the 10th to 90th percentile range for the
supercritical peer group is smaller:(16.1 vs 18.0). The
higher mean suggests that the supercritical achieves
slightly lower commercial performance. However, the
narrower range suggests that commercial impact
variability is under better control than with the subcritical
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data show that low commercial unavailability with both

boiler technologies has been achieved.
Total cash less fuel (TCLF) measures total operating

and maintenance costs, including operations,
annualized maintenance costs and other typical
operating costs such as training, consumables,
chemicals, water, insurance, environmental
expenditures and other fixed costs. The maintenance
index (MI) represents a maintenance spending indicator
that includes both routine maintenance expenses and
annualized major maintenance overhauls and projects.
Table 2 presents the industry average for TCLF ($/MWh)

and MI, as well as the 10th, 25th, 50th, 75th, and 90th
performance percentiles for subcritical and supercritical
peer groups.
The average TCLF shown in Table 2 is approximately 25

percent higher for the supercritical peer group
(statistically significant at the 95 percent confidence
level) on a variable cost of production $/MWh basis (7.1
vs 5.7). The supercritical units show lower variability with
a smaller 10th to 90th percentile range (2.5 vs 3.3
$/MWh). The differences in average TCLF/MWh
between the peer groups is also statistically significant
at the 95 percent confidence level. Since TCLF includes
operating costs and maintenance costs, the next logical
question is whether the MI component of TCLF is also
consistently higher for supercritical units, to determine if
it is a cost driver within TCLF based on the technology
difference.
As can be seen in Table 2, the MI mean and the
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commitment necessary to support each technology.
The efficiency advantage is the primary reason to

employ supercritical technology. Since the installed or
capital cost of new supercritical pulverized coal plants is
typically estimated to be 1 to 3 percent higher than for
new subcritical pulverized coal plants, asset owners rely
on the efficiency advantage to provide better returns
over the life of the project.
Table 3 presents the industry averages for fuel cost

($/MWh) and heat rate (Btu/kWh), as well as the 10th,
25th, 50th, 75th and 90th performance percentiles for
subcritical and supercritical peer groups.
As shown in Table 3, the mean fuel cost is lower for

supercritical units versus subcritical units (13.6 vs 19.0).
This is economically significant in that the lower fuel
costs for the supercritical units offset the generally
higher non-fuel O&M costs to support any margin
advantage. Table 3 also indicates the range of industry
achieved fuel costs/MWh for the supercritical peer group
has almost half the variability of the subcritical peer
group: 6.8 vs 11.1. Since fuel costs are dictated by both
regional availability and possible technology or
transportation constraints, the effects are beyond the
scope of this article and will not be addressed further.
Improved heat rate is the obvious advantage of

supercritical technology. For our purposes, heat rate is
calculated on an actual, annual basis as the quotient of
total fuel consumed and net production for the year, not
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be attributed to economic dispatch models keeping the

supercritical units at a higher load level than subcritical
units. At the same time, slightly higher unreliability of
supercritical units could be tempering this difference.
Newer supercritical units currently in development or

construction (not referring to advanced supercritical
technology) may have a slightly better heat rate than the
supercritical units with an average age between 20 to 30
years. With further investigation, Solomon may be able
to extend this research to allow estimates or predictions
of cost and reliability performance ranges for the next
generation of advanced supercritical technology.
In the description above, reliability, cost and efficiency

effects were compared between the two technology peer
groups independently to show how each performance
attribute varies between the supercritical and subcritical
peer groups. However, pro forma calculations consider
all of these attributes (and several more) simultaneously
by selecting the particular variable values as the
anticipated performance outcomes of a particular
project.
The inherent uncertainty in these selections is further

complicated by the interrelationship between reliability,
cost,and efficiencies and by technology (that is,
subcritical vs supercritical). In many cases this is
precisely what happens; that is, adequate maintenance
spending in the correct areas results in better availability
and likely better efficiencies, due to fewer inefficient load
reductions or start cycles driven by maintenance needs.
If a company is executing best practices, its reliability
will be high and its costs low.
The counter-example is also valid: either lower-than-

necessary maintenance spending breeds high
unavailability or unreliability results in high-cost
corrective maintenance. Reliability and maintenance
costs are generally not independent variables and any
risk analysis requires a method to model the correlations
between the input probabilistic variables.
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Net cash margin (NCM) is defined as:
NCM = Pmp (1-CUI) (FC + MC)

where:
Pmp = market revenue electricity price ($/mWh)
CUI = (0 100%)
FC = fuel costs ( $/mWh)
MC = maintenance costs ($/MWh)
The risk model uses a statistical “bootstrapping” method

for CUI, FC and MC, which is an academically
recognized technique for sampling the datasets with
replacement to compute NCM outcomes¹.
The market economics that set or forecast the revenue

prices for electricity are independent of technology and
are fixed. For the purposes of this paper, the market
price is fixed at $50/MWh.
The bootstrapping technique is a standard statistical

resampling method to infer population-level statistics
and statistical errors from sample data. This technique
does not extrapolate to variable values that are outside
the ranges contained in the sample data. For analyzing
performance variations between supercritical and
subcritical boiler technologies, Solomon’s data
represents a sufficient performance range to model
variable outcomes to a satisfactory level.
For supercritical and subcritical boiler technologies, the

correlation between CUI, fuel costs, and maintenance
costs was computed and the statistically significant
relationship included in the variable selection analysis.
Figure 1 shows the results.
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Figure 1 depicts the cumulative probability of achieving

less than or equal to a given NCM result. For example,
referring to the subcritical risk curve, there is an 80
percent likelihood that the net cash margin outcome will
be approximately $25.50 or less. This point also can be
interpreted as indicating a 20 percent chance that the
NCM achieved will be greater than $25.50.
Additionally, other notable observations are as follows:
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As described in this analysis, choosing supercritical over

subcritical technology can have a clear advantage. From
a reliability and market revenue capture perspective,
however, the historical operating data we have seen
demonstrates that supercritical technology has a slight
disadvantage. Similarly, from a maintenance spending
perspective, it costs more to maintain the technology of
the supercritical plants than of subcritical plants.
Because of these disadvantages, the overall efficiency

advantage for supercritical units must overcome its
disadvantages. Since fuel costs comprise approximately
70 to 80 percent of the total operating and maintenance
cost of a typical coal plant, it is clear that the efficiency
advantage can maintain an economic advantage as long
as the fundamental asset management is sound.
The data suggests, however, that care must be taken to

establish the correct reliability and maintenance
spending assumptions for the pro forma model. The
data evaluated in this analysis comes from plants that
have been operating for several years; therefore, the
averages represent a sort of equilibrium in spending,
reliability and efficiency. Most importantly, once in
operation, prudent spending levels for maintenance
programs, training and operating procedures must be
established to preserve the inherent
technology/conversion efficiency advantage that
supercritical units offer, to maintain the financial
performance modeled and avoid downside operational
risk.
As the current and future carbon credit valuation policies

develop, supercritical technology can offer even greater
margin enhancement opportunities. The risk model
presented here can be further enhanced to add a
component for carbon credit purchases or sales based
on future pricing curves for these commodities, should
an active market develop in the United States.
The risk model approach provides realistic, data-driven,

documented results of actual performance variability,
accounting for the high degree of correlation between
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performance data has yet to be generated by using

statistical distribution modeling of the key variable
results and making consistent assumptions regarding
their potential correlations. Additional research is
possible in this area.
To build supercritical or subcritical, that is the question.

In either case, it is best to understand the realities of the
technology choice, the results that are possible, and
capture the higher-quality, actual industry data in a
robust pro forma financial model before you decide.
¹ “Bootstrap Methods and Their Application,” Cambridge

Series in Statistical and Probabilistic Mathematics, No.
1, Davision, A.C., Hinkley, D.V, Cambridge University
Press, 2003.
Authors: Anthony J. Carrino, Contributing Editor, is

senior consultant-power generation with Dallas-based
Solomon Associates. Richard B. Jones, Ph.D. is
Director of Statistics and Risk Modeling, also for
Solomon Associates. He has authored two books on
Reliability Centered Management and risk management.
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Modeling New Coal Projects: Supercritical or Subcritical? - Power En... https://www.power-eng.com/articles/print/volume-110/issue-11/depar...

Decisions made on new-build coal-fired plants are

Solomon Associates has been collecting cost,

analysis and models of new plants.

Future uncertaintyor riskin pro forma analysis may exist

However, one of the biggest concerns an experienced

A substantial, industry-wide database cannot be

Since supercritical technology has a clear efficiency

Reliability/availability performance depends on total

To provide insight, Solomon compiled performance and

In this analysis, Solomon has made some statistical

The IEEE’s Equivalent Unavailability Factor (EUF) and

EUF is an overall reliability indicator that accounts for

CUI provides an important indication of the monetary

greater percentage of the higher-market- price periods

Table 1 presents the industry average EUF and CUI, as

As shown in Table 1, industry-wide data indicates that

With respect to CUI, Table 1 shows that the computed

data show that low commercial unavailability with both

Total cash less fuel (TCLF) measures total operating

Table 2 presents the industry average for TCLF ($/MWh)

The average TCLF shown in Table 2 is approximately 25

As can be seen in Table 2, the MI mean and the

commitment necessary to support each technology.

The efficiency advantage is the primary reason to

Table 3 presents the industry averages for fuel cost

As shown in Table 3, the mean fuel cost is lower for

Improved heat rate is the obvious advantage of

be attributed to economic dispatch models keeping the

Newer supercritical units currently in development or

In the description above, reliability, cost and efficiency

The inherent uncertainty in these selections is further

The counter-example is also valid: either lower-than-

Net cash margin (NCM) is defined as:

NCM = Pmp (1-CUI) (FC + MC)

The risk model uses a statistical “bootstrapping” method

The market economics that set or forecast the revenue

The bootstrapping technique is a standard statistical

For supercritical and subcritical boiler technologies, the

Figure 1 depicts the cumulative probability of achieving

Additionally, other notable observations are as follows:

As described in this analysis, choosing supercritical over

Because of these disadvantages, the overall efficiency

The data suggests, however, that care must be taken to

As the current and future carbon credit valuation policies

The risk model approach provides realistic, data-driven,

performance data has yet to be generated by using

To build supercritical or subcritical, that is the question.

¹ “Bootstrap Methods and Their Application,” Cambridge

Authors: Anthony J. Carrino, Contributing Editor, is

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