PJM Cost of New Entry (CONE) Study

Sargent & Lundy and the Brattle Group provided consulting support to PJM for updates to PJM's capacity market

Cost of New Entry (CONE) Study
Client: PJM Interconnection LLC

Project Highlights:

  • Plant type: combustion turbines and combined-cycle
  • Fuel: natural gas
  • Size: 321-355 MW (CT), 1126-1160 MW (CC)
  • Configuration: 1x0 (CT), 2x1 (CC)
  • Major Equipment: GE 7HA.02 gas turbines

Project Description:

Sargent & Lundy, as a subcontractor to The Brattle Group, reviewed key elements of PJM’s capacity market, which is called the Reliability Pricing Model, and prepared estimates of the cost of new entry (CONE) into the PJM market. Sargent & Lundy supported Brattle in the screening and selection of reference plant technologies and subsequently prepared cost estimates and performance projections, including:

  • Total gross overnight capital costs, including most owner’s costs, all owner-furnished equipment, and all EPC balance-of-plant (BOP) costs;
  • A capital drawdown schedule to be used in calculating interest during construction in the capital budgeting model;
  • First-year fixed and variable operations and maintenance (O&M) costs; and
  • Performance data (MW output and heat rates) relevant for calculating energy and ancillary services (E&AS) revenues.

View the full report.

This is another example of a successful collaboration between The Brattle Group and Sargent & Lundy. The strong economic and regulatory capabilities of The Brattle Group pair well with the strong technical capabilities of Sargent & Lundy.

Project Scope:

  • Screening of reference plant technologies and locations
  • Development detailed technical specification of each of the CT and CC plant technologies
  • Bottom-up capital cost estimates
  • Fixed O&M and variable O&M estimates (hours based and starts based)
  • Heat balances for performance estimates
  • Addressing stakeholders’ questions

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