Engine vs.

Turbine
The Ultimate Confrontation
Presentation to the Ministry of Mines and Industries July 13, 2005

Fair Comparison
Engine: Caterpillar GCM34

Turbine: GE LM2500, combined cycle

Both are recent technology, widely used Considered best in class Cost data from Gas Turbine World, May 2005

Logistics, Delivery
Generation Unit Options Manufacturer Type Model Delivery FOB Transport Installation months months months months Gas Engine Caterpillar Recip Gas GCM34 13 1 4 18 Simple Cycle Combined Cycle Solar GE Titan 130 + LM2500 Steam Turb. 11 1 1 13 14 1 16 31

GESolar LM2500 Titan 130

Largest item dimensions Package Length Package Width Package Height Approximate Weight

m m m tonnes

12.3 3.1 4.8 132.7

14.0 3.3 3.3 73.7

Advantage: Turbine

Capital Costs ($000)

Capital Costs ($000) Gas Engines Electrical, controls Gas Turbines Steam Generation HRSG & Turbine Compressor Civil works Demineralization, extra wells & pumps Spare parts, tools & equipment Interconnection 15% Contingency 5%/year Security Engineering, project management, start-up Owners' cost, training, insurance TOTAL PROJECT CONSTRUCTION COSTS Power Capacity - SITE CONDITIONS (MW) Installed Cost per kW ($/kW) $ Engines 58,600 3,186 8,500 2,450 2,665 11,310 6,503 14,000 2,800 110,014 102.3 1,075 $ Turbines 44,000 55,200 3,000 8,500 4,000 2,450 2,665 17,972 17,798 18,000 2,800 176,385 * No IDC 108.2 1,630

Advantage: Engine

Operation and Maintenance ($000)

Gas Price Operating Expenses Gas Operation and Maintenance Water Cost Compressor O&M TOTAL ANNUAL OPERATING EXPENSES Energy Production (MWH) Operating Cost - /kWh 4.50 Engines 30,321 10,595 40,916 847,595 4.83 4.50 Turbines 29,796 8,582 1,904 140 40,422 858,164 4.71

Advantage: Turbine

Lifetime Cost per kWh

Cost per kWh build-up Capital cost to build - lifetime ($000) Financing charge, 20-year, 10% blended rate Financing cost per energy production - /kWh Engines 110,014 12,922 1.52 Turbines 184,825 21,710 2.53

Adding capital & operating components Capital Cost per kWh - /kWh Operating Cost - /kWh Total lifetime cost per kWh - /kWh 1.52 4.83 6.35 2.53 4.71 7.24

Advantage: Engine

Project IRR, NPV

NPV & IRR Calculation (000's) One-time investment Revenues at Expenses Annual Profit IRR - 20 year, pre-tax basis NPV - 20 yr pre-tax 10% Disc. Rate 8 /kWh Engines 110,014 67,808 40,916 26,891 23.7% $224,281 Turbines 184,825 68,653 40,422 28,231 13.8% $235,031

Advantage: Engine

Effect of Sheberghan Location

Adjusting for site conditions Power Capacity - MW nameplate, ISO Derating due to temperature Derating due to altitude Performance degradation Parasitic load Gas compressor parasitic load Power Capacity - SITE CONDITIONS (MW) Heat Rate, (kJ/kWh) nameplate at ISO Derating due to temperature Derating due to altitude Performance degradation Parasitic load Gas compressor parasitic load Heat Rate at Site - before adjustments Waste heat to amine benefit Net heat rate SITE CONDITIONS (kJ/kWh) Engines 105.1 0.4% 0.0% 0.5% 1.8% 0.0% 102.3 8273 0.4% 0.0% 0.5% 1.0% 0.0% 8430 -481 7950 Turbines 124.0 3.3% 5.0% 2.0% 1.5% 1.0% 108.1 6810 3.3% 5.0% 2.0% 2.0% 1.0% 7716 0 7716

LM2500 Turbine vs. GCM34 Engine

Engine

Turbine

Turbine loses output significantly in high temperatures.