Tailor-made off the shelf: reducing the cost and construction time of thermal power plants
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Over the last ten years, the average cost and construction time of greenfield fossil fuel-fired power plants has been reduced by approximately 50%, even as their performance has improved. This is the result of technological changes and increased competitive pressures arising from the deregulation of power markets. This paper provides an overview of steps that have been taken by the power industry to respond to this challenge by designing and building standardized power plants based on sound technical solutions and optimized economics, with short preparation and construction times and a high degree of operational reliability. The paper deals with the key factors which have contributed to these changes: standardization of power plant designs; modularization; automation of power plant design; technological improvements; and the impact of these changes on design and manufacturing of power plants in developing countries. The paper discusses the advantages of the approach for the client and supplier. Modularization Significantly Reduces the Costs of Thermal Power Plants. Compared with the customized approach for project design and construction, modularization can significantly reduce project-financing costs (by up to 10 percent) in three categories: detailed engineering and supervision, price contingencies and interest during construction.