Assumptions and Ground Rules
The following common cost assumptions are applied for all H2A Central and Forecourt supply options, unless a case for any different values is provided otherwise:
- Analysis Methodology — Discounted Cash Flow (DCF) model that calculates a levelized H2 price that yields prescribed IRR
- Reference Financial Structure — 100% equity with 10% IRR — Include levelized H2 price plot for 0 to 25% IRR - Model allows debt financing
- Reference Year Dollars — 2005, to be adjusted at half-decade increments (e.g., 2005, 2010)
- Technology Development Stage — All Central and Forecourt cost estimates are based on mature, commercial facilities
- Inflation Rate — 1.9%, but with resultant price of H2 in reference year constant dollars
- Income Taxes — 35% Federal; 6% State; 38.9% Effective
- Property Taxes and Business Insurance — 2%/year of the total initial capital cost
- Sales Tax — Not included on basis that facilities and related purchases are wholesale and through a general contractor entity
- Working Capital Rate — 15% of the annual change in the total operating costs
- Analysis Period — 40 years for Central; 20 years for Forecourt
- Facility Life — 40 years for Central with case exceptions; 20 years for Forecourt with case exceptions
- Depreciation Type and Schedule for Initial Depreciable Capital Cost — MACRS — 20 years for Central with case exceptions; 7 years for Forecourt
- Construction Period and Cash Flow — Varies per case for Central; 0 for Forecourt
- Planned Replacement Capital — Post startup capital costs spread over time based on specific replacement estimates. Depreciation is based on MACRS schedule and 7 years or the same as the replacement period if it is shorter than 7 years.
- Unplanned Replacement Capital — Specified percentage of initial depreciable capital cost meant to handle unplanned replacement capital expenses that occur during an operating year of the plant. Depreciation is based on MACRS schedule and 7 years.
- Project Contingency — % adjustment to the total initial capital cost such that the result represents the mean or expected cost value. Periodic replacement capital includes project contingency.
- Process Contingency — % adjustment to the total initial capital cost such that the result incorporates the mean or expected overall performance.
- Land Cost — 5000$/acre purchased for Central; $0.5/sqft/month for long-term lease for Forecourt
- Capacity Factor — 90% for Central, with case exceptions; 70% for Forecourt
- Average Burdened Labor Rate for Staff — 50$/hour for Central; 15$/hour for Forecourt
- G&A Rate — 20% of the staff labor costs above
- Forecourt Maintenance and Repair — 5%/yr of initial depreciable capital cost for small capacity and 3%/yr for large capacity
- Co-produced and Cogenerated Electricity Price — $30/MWh with sensitivities based on 20$/MWh low and 50$/MWh high
- CO2 incentive (when CO2 sequestration is not plausible) — not included in Base cases, sensitivity included at 100$/tonne C (27.3$/tonne CO2) for Central and Forecourt.
- O2 Credit — Not included in Base cases, sensitivity included at 20$/tonne for Central and Forecourt.
- Salvage Value — 10% of initial capital, with case exceptions; 0% for Forecourt
- Decommissioning — 10% of initial capital, with case exceptions; 0% for Forecourt
- Hydrogen Pressure at Central Gate — 300 psig. If higher pressure is inherent to the process, apply pumping power credit for pressure >300psig.
- Central Storage — Buffer only as required for efficient operations
- Hydrogen Storage Pressure at Forecourt — 6250 psig
- Forecourt Compressed H2 Storage — 87.5% of maximum daily production (based on 35% of production divided by an assumed 40% dispensable hydrogen fraction)
- Hydrogen Purity — 98% minimum; CO < 10ppm, sulfur < 10ppm
- Sensitivity Variables and Ranges — Based on applying best judgment of 10% and 90% confidence limit extremes to the most significant baseline cost and performance parameters