Can the Enterprise meet the Government price target of US$0.1288 per Kwh ?

The Government via Phillip Paulwell has indicated that EWI has set a benchmark of US$0.1288 and any new entrant must be able to come it at this figure or below, but is that really possible.

I presented some figures which showed that EWI could not have provided energy to JPS at $0.1288 and instead the best price based on my calculations would be US$0.1675 per kWh, which would not be the final price to the customer, based on the price of LNG out of Asia. With EWI out of the picture I decided to explore new project of 381 MW (base load).

See my analysis below as well as LNG US Export prices. Now you be the judge.

Installed Capacity (MW)	381
Rated output (MW) based on CF 90%	342.9
Uptime	85%
# Days	365
Projected Run hrs	7446
Total Generated power (MWh)	2,553,233.40
Plant Rated Eff  (CCGT)	50%
Average Heating (MWH/CF)	5.13E-06
Total volume of LNG Req CF	16,578,153,629
Cost LNG US$/ ( 1000CF USA) $15.49	$                                     0.0155
Total Fuel Cost /Annum	$                          256,795,600
Fuel cost as % total cost	85%
O&M	15%
Est total annual cost	$                    302,112,470.24
Fuel Cost / KWH	$                                     0.1006
Total Cost per KWH	$                                     0.1183
Interest payment	$43,019,358.24
Total Annual Cost Incl Int Pay	$345,131,828.48
Cost per Kwh	$0.1352

Plant Est Cost	$656,000,000
Loan amount	$556,000,000
Ave weighted cost of borrowing	6.60%
Length of loan yrs	30
Annual Maintenance Cost 1.5% Cap cost	$9,840,000.0

ROI > 6.6%( After tax)	8.50%
Tax Rate	33.30%
EBT based on 33% Int rate
Total Generation Cost to meet ROI	$428,730,029.38
Sale Price to JPS	$                                     0.1679

 

In order for the enterprise team to get electricity to the grid at Paulwell’s figure this would be what is required in terms of fuel price.

Installated Capacity (MW)	381
Rated output (MW) based on CF 90%	342.9
Uptime	85%
# Days	365
Projected Run hrs	7446
Total Generated power (MWh)	2,553,233.40
Plant Rated Eff  (CCGT)	50%
Average Heating (MWH/CF)	5.13E-06
Total volume of LNG Req CF	16,578,153,629
MMBTU of fuel required	290,387.75
Cost LNG US$/ ( 1000CF USA) $10.35	$                                     0.0104
Total Fuel Cost /Annum	$                          171,583,890
Fuel cost as % total cost	85%
O&M	15%
Est total annual cost	$                    201,863,400.07
Fuel Cost / KWH	$                                     0.0672
Total Cost per KWH	$                                     0.0791
Interest payment	$43,019,358.24
Total Annual Cost Incl Int Pay	$244,882,758.30
Cost per Kwh	$0.0959

Plant Est Cost	$656,000,000
Loan amount	$556,000,000
Ave weighted cost of borrowing	6.60%
Length of loan yrs	30
Annual Maintenance Cost 1.5% Cap cost	$9,840,000.0
ROI > 6.6%( After tax)	8.50%
Tax Rate	33.30%
EBT based on 33% Int rate
Total Generation Cost to meet ROI	$328,480,959.20
Sale Price to JPS	$                                     0.1287

 

The last time we saw LNG at that price was March 2013 see table attached.

Jan-2011	8.2
Feb-2011	9.71
Mar-2011	10.28
Apr-2011	8.25
May-2011	8.62
Jun-2011	11.6
Jul-2011	12.72
Aug-2011	11.6
Sep-2011	12.76
Oct-2011	12.54
Nov-2011	15.29
Dec-2011	12.83
Jan-2012	11.83
Feb-2012	11.3
Mar-2012	10.67
Apr-2012	8.54
May-2012	16.1
Jun-2012	17.55
Jul-2012	8.49
Aug-2012	15.15
Sep-2012	8.4
Oct-2012	11.57
Nov-2012	8.86
Dec-2012	11.76
Jan-2013	10.11
Feb-2013	10.85
Mar-2013	10.02
Apr-2013	11.36
May-2013	12.84
Jun-2013	13.38
Jul-2013	12.89
Aug-2013	13.25
Sep-2013	13.53
Oct-2013	13.09
Nov-2013	13.45
Dec-2013	12.69
Jan-2014	13.7
Feb-2014	15.49

 

Unless we get a damn good deal on long-term supply of LNG (not sure how), the proposed cost of US$0.1288 is nothing but  piped dream.

Challenges to the above is welcomed,  as long it is  accompanied by data .