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COMPARATIVE
FINANCIAL COST/BENEFIT ANALYSIS OF MEDIUM-VOLTAGE AND
LOW-VOLTAGE (MV-LV) NETWORKS WITH ALUMINUM AND COPPER
CONDUCTORS
Designs
of Medium and Low Voltage Electricity Networks frequently
omit an analysis of the use of Conductors in relation
to the material and its hostile environment and surroundings,
considering a priori the advisability of using
Aluminum, whose benefits should be verified in order to
make the right decision.
SUMMARY
Based
on real data, the present article summarizes the Comparative
Financial Cost/Benefit Analysis of utilizing Aluminum
or Copper Conductors in typical MV-LV combined Electricity
Networks in an Electrification Project. This is based
on the Financial Costs and Benefits fixed according to
well-known indicators such as VANE, TIRE and the COST/BENEFIT
ratio of Investment, over a 20 year period, that also
is usually accepted, a priori, as the average useful
life of Aluminum.
The
results obtained, even when the duration is considered
identical to that of Copper, do not, in the case of Aluminum
conductors, confirm the financial advantages attributed
to same, nor do those of "lesser initial investment"
(in this case the results are only 0.2% lower), but rather
their financial competitiveness diminishes compared to
the option of Copper Conductors, as the mentioned period
of analysis lengthens.
1.
INTRODUCTION
The
most significant antecedent is that in many cases in our
country, Technical and Economic preeminence is officiously
conferred on Aluminum Conductors to be applied in Medium
and Low Voltage Distribution Networks, without taking
their location into account.
Said
preference is apparently related to the wish to optimize
programmed investment, without impairing the safe and
long-lasting installations for efficient service. However,
it is well-known that when making this decision, the adverse
conditions prevailing in the environment and surroundings
are not taken into consideration, especially when said
Projects are located on the extensive coastal strip or
in some inland zones affected by saline contamination
and micro-climates with high humidity environments, that
submit any and all materials to a difficult performance.
2.
SCOPE OF THE ANALYSIS
The
object of the Comparative Financial Analysis, with a 20-year
horizon of useful life for the installations summarized
in this article, is to make appraisals starting with the
tables of investment covering the Designs and Specifications
conforming to Regulations of propitious plans to replace
deteriorated Conductors and Accessories, and also the
tables of Operating Costs focused on official and officious
directives and provisions in force, when considering an
Overall Project to provide electric service (800 watts/block)
for a typical small settlement (280 kVA) close to a town
and located in an atmosphere and surroundings hostile
to materials, with the following infrastructure:
- Four
Distribution Sub-Stations, of which three are 22.9/0.40
– 0.23 kV (2x100 + 1x40) kVA, and one of 22.9/0.44 –
0.22 kV (1x40) kVA.
- Primary
Medium Voltage Network of 1.47 km plus an additional
5% for slag in 22.9 kV only with the neutral solidly
grounded in the sub-stations.
- Secondary
Low Voltage Networks for Private Service, Public Lighting
and house connections. (5,455 km of Al and 5,634 km
of Cu) respectively plus 5% for slag, in 380 - 220V
and 400 - 220V with a Supporting Neutral solidly grounded
in the terminals.
- The
electric service is aimed at attending a total of 402
blocks of domestic service, 8 Special Three-phase Electric
Loads and 170 Public Lighting lamps.
3.
THE ELECTRIFICATION PROJECT
In
order to achieve an equitable analysis that clearly reflects
the magnitude of the investment necessary for the infrastructure
and the Development Costs, starting with the Conductors’
performance, first of all attributing to them equal properties,
and later according to their own performance when facing
the reality imposed by the unfavorable environment and
surroundings. In this respect, the following Technical
and Administrative premises have been considered:
3.1
Technical Premises
a)
The Electrification Project involves the Medium and
Low Voltage Networks that cover the whole of the settlement,
not including investment in the Distribution Line
connected to the Electric System. In one case Aluminum
Alloy Conductors are applied and, in the other, Copper
Conductors. (Table 1, Table 2).
Aluminum
Copper (Cu)
Aluminum Copper (Cu)
Alloy
(AA) Hard Temper
Standards
ASTM B398 MNTEC 370-043
ASTM 3998 or IEC 1089
Nominal
Section: 16mm2 10mm2
Outside
Diameter: 5.1mm 4.05 mm
No.
of Strands per diameter: 7 x 1.7mm 7 x 1.35mm
Electric
Resistance 20oC: 2.15W /km
1.86W /km
Current
capacity, weight: 102 A, 43 kg/km 101
A, 89 kg/km
Table
1 Bare Conductors for Primary Networks
Aluminum
Copper (Cu)
Alloy
(AA) Annealing
Rule:
NF C33-209 NF C33-209, ITINTEC 370.051
IEC
228, IEC 1089/ IEC 228, ITINTEC 370.042. 370.043
ASTM
B-232 ASTM A 475-95
3x25
+ 16/25mm2 3x25 + 10/16, 3x16 +
10/10mm2
3x16
+ 16/25mm2 3x10 + 10/10, 3x10 +
6/10mm2
2x16
+ 16/25mm2 3x6 + 6/6, 2x10 + 6/10,
1x6/6mm2
Bare
AA Support Insulated Hard Cu Support
Table
2 Self supporting Conductors for Secondary Networks
b)
The Technical Analysis relating to the Design, Execution
and Commercial Operation of Medium and Low Voltage Electricity
Networks is based on the efficiency of the Conductors’
electric performance regarding said applications and on
their servicing durability within the 20-year useful life
period considered for installations.
c)
The Mechanical Design of the conductors has been conventionally
drawn up, with its demands applying the normally prevailing
Conditions of its State, through the meteorological factors
(Wind velocity, Temperature, etc.) according to Peruvian
Territory Zoning and the Mechanical Loads defined by the
National Electricity Code (CNE).
d)
The necessary investments to replace Conductors bare of
Aluminum are adjusted at maximum average intervals of
duration by corrosion until total replacement, or rather,
when they are insulated, the average interval for breakage
by pitting of insulation that starts its deterioration,
which lapses are known from prior experience in Exploitation
of Coastal and Inland Electricity Networks.
- For
Primary Networks (Bare Conductors). An average useful
life of 10 years is estimated until total replacement,
having opted to locate the acquisitions at the end of
the fifth year of service.
- For
Secondary Networks (Insulated Conductors). Breakage
is estimated at two years later, 15 years, which covers,
on the average, the entire insulation, opting to locate
the acquisitions in the 16th year of service.
(Normally the Aluminum Alloy Support will have deteriorated
and collapsed in the 10-year interval).
e)
For Installations with Copper Conductors, no reinvestment
for replacement is programmed, since experience shows
that the use of said material in Coastal Electricity Networks
affords them a duration greater than 20 years, normally
exceeding 30 years (until the insulation falls off).
f)
The Maximum Demand, as well as Losses per Feeder is determined
by the coefficients corresponding to the type of project,
and taking into consideration the calculated Loss of Voltage
effected. To determine the Energy, a Load Factor is assumed
of linear variation growing from 0.3 to 0.4 during the
20-year period.
g)
The valuation of Recovery by Dismantling the installations
at the end of 20 years of service, depending on the material
of the Conductors, covers different components in both
options. For those still in a good state, the acceptable
margin of valuation is taken at 25% of the Cost of the
new Supply (Table 3).
Item Primary
Network Items AA-US$ Cu-US$
1.0 Wooden
Posts and Crossarms 5,439.2 5,439.2
2.0 Conductors
and Accessories - 1,644.4
3.0 Insulators
(porcelain) & Accessories 2,587.1 2,587.1
4.0 Grounding
materials 813.8 805.5
5.0 Handling
Protection Equipment
(Lightning
Rods) 900.0 900.0
6.0 Low-Voltage
Power Cables 288.8 288.8
7.00 Distribution
Transformers 9,910.0 9,910.0
Total
Cost of New Supply 19,938.9 21,575.0
Total
Recovery Valuation ,984.7 5,393.8
Item Secondary
Network Items AA-US$ Cu-US$
1.0 Wooden
posts 14,624.8 14,624.8
2.0 Cables
and Conductors - 13,128.6
3.0 Grounding
material 939.3 929.7
4.0
Electric Connections Conductor:
House
connections:
Cable
2x4mm2 6,706.8
6,706.8
Applied
Special Charges:
Cable
3x6 mm2 268.8
268.8
Total
Cost New Supply 22,539.7 35,658.7
Total
Recovery Valuation 5,634.9 8,914.7
Table
3: Recovery of Primary and Secondary Networks according
to Conductors material
3.2
Administrative Premises
- The
Financial Appraisal will be carried out, assuming that
the Investment will be for the account of a distribution
Concessionaire, whose activities, as contracted, will
adhere to the Electricity Concessions Law.
- The
analyzed Electrification Project is classified and treated
as a "Marginal Project", independent of Costs and Benefits
that might result from other projects developed in the
zone (e.g. Electric Trunk Line) and on the temporary
target period of the analysis.
- The
Investment items (domestic and foreign prices at February
2000), as well as income from Sale of Power at the existing
Tariff, and various disbursements, have been translated
into US Dollars (Exchange Rate US$1 = 3.47 New Soles,
at Feb.18, 2000), in order to have a single monetary
unit for comparison.
- In
the financial formulation of investments, to Direct
Cost (DC = Supply, Transport + Assembly, Engineering),
there are added the usual percentages of same to cover
the Contract expenses for Execution of the Project and
to the Total Cost (TC = DC + General Expenses + Profits),
legal taxes have been applied:
-
15% of the DC for Contractor’s General Expenses
-
10% of the DC as Contractor’s Profit
-
18% of the Value Added Tax (VAT) TC.
- Tariffs
applied both to the Sale of Power (Capacity) and Energy
as well as for calculating losses, correspond to the
Tariff Bill of Nov. 3, 1999, valid for analysis that,
for Insulated Systems B2 Typical Sector 2, consider:
-
For Purchase of Energy in MT2
For
Capacity : 21.30 New Soles/kW-h
For
Energy: 24.19 Centimes of New Sol/kW-h
- For
Sale of Energy in BT5
Fixed
Capacity Charge: 1.74 New Soles/Client
For
Energy: 49.79 Centimes of New Sol/kW-h
- Maintenance
Costs are taken from the percentage normally applied
to Electrification Projects, amounting to 2% p.a. of
the initial Investment cost: This criterion is also
used to determine the annual costs required for repairs
when the analysis programs Replacements due to Deterioration
(breakage).Characteristics of Primary Network Components
4.
CHARACTERISTICS OF PRIMARY NETWORK COMPONENTS
The
Primary Network consists of Feeders in 22.9 kV with bare
Conductors suspended by Insulators from the supports,
are installed in the same way as the Distribution Lines,
following the recommendations of Norms and Regulations
(National Electricity Code-CNE). In this case, either
option, whether Aluminum Conductors or Copper Conductors,
is installed in the same way.
4.1
Accessories for Conductors
Depending
on the Conductors’ material, its installation demands the
use of only a reduced number of differentiated accessories
equally available on the market, the specifications of which
are shown in Table 4.
Accessory Al
Alloy (AA) Cu Hard Temper
Double
Assembly ROD AA or Aluminized Heavy
bi-metallic or
Steel
for 16mm2 Galvanized Steel
for
Conductor
10mm2 Conductor
Connector AA
Type Comp Copper or Alloy
R.(*)
Traction > 95% R.(*) Traction
> 95%
Of
Conductors of Conductors
Splicing
Wire AA, Annealing Copper Annealing,
16mm2
section 10mm2 section
Dead
end clamp AA- 1a Fusion of
Bimetallic or heavy
Passing
type Galvanized Steel
Table
4: Differentiated Accessories for Aluminum and Copper
Conductors
4.2
Porcelain Insulators for Bad Weather
Outside
Insulation and its Accessories for Primary Networks are
measured in any equal way, whichever the material of the
Conductors be. The Study considers those of the minimum
vanishing line Table 5. However, should the contamination
of the place be either Severe or High, other geometry
for a greater Vanishing Line will have to be utilized,
to permit longer terms between maintenance. Insofar as
ironwork is concerned, this will always be the same, Pistol
type clamps, Eyebolts, Curved double square washers, Steel
threaded grommet and Forged Steelball or Malleable Iron
Adapters, all hot galvanized.
For
Both Conductors Materials
Insulator,
PIN Type (Porcelain)
Type:
NEMA/ANSI 56-2, Vanishing Line 432 mm
Disruptive
Tensions Dry/Under Rain: 110/70 kV
PIN
for Insulator pin
Material:
Iron or steel, Lead Alloy Thread
Diameter,
length: 25 mm diameter, 357 mm long
Suspension
type (Porcelain) Insulator
Type:
NEMA/ANSI 52-3, Leak Line 300 mm
Disruptive
Tensions, Dry/Under rain: 80/50 kV
Table
5 Porcelain Insulators with normal characteristics
5.
Characteristics of secondary network components
The
design of Secondary Networks with Self-supporting Conductors
of both materials is similar, although for the 40 meter
openings that are applied in the Study, the Copper Conductors,
despite complying with the minimum guard distances, present
a greater slag translated into the need to acquire a small
additional length.
5.1
Accessories for Installation of Self-supporting Cables
This installation is more economical since it does not
require crossarms nor insulators, and moreover the components
both for splicing and shunting for d0eeding are of general
usage: basically Suspension and Dead End Clamps, Stirrups,
Shunting and House connections and for Aluminum Conductors:
Bimetallic wedge Connectors.
5.2
Components for House Connections
The installation of house connections from Low Voltage,
self-supporting Conductors, is the same in both cases,
and prepares for both Three-Phase Loads as well as Single-Phase
Loads. The specifications of the respective components
are identical: Concentric Cables for Home Applications
and Special Loads, Meter boxes, Turnbuckles, PVC and Steel
Pipes, and Accessories.
5.3 Public Lighting and other Lamps
The Public Lighting System has 70-W High Pressure Sodium
Vapor Lamps, 5.800 Lumens having an average 10,000 hours
of life, with acrylic Reflector and complete rustproof
Accessories, for both options analyzed. The only difference
is the Bimetallic Connector that demands Aluminum Alloy
Conductors for the respective connection.
6. CHARACTERISTICS OF BOTH NETWORKS’ COMPONENTS
Furthermore,
the principal infrastructure for Primary and Secondary
Networks is formed by the Conductors, by the Wooden Posts
with their respective Support Accessories, their Bridles
and Grounding, that are the usual installation, whichever
material is used in the Conductors.
6.1
Wooden Posts and Crossarms and Steel Cables for Bridles
The
wooden Posts for the Primary Network are higher, to
support Medium Voltage Bare Conductors, as well as to
have to ensure bigger openings and guard distances for
the passing of vehicles. In the case of the Secondary
Network, the Posts are not so high, since they support
self-supporting Low Voltage Conductors. Table 6
includes the characteristics of the Posts, of which
those with angles and bridles need to be erected with
steel guy wires.
For
Both Conductors’ Materials
Standards:
ANSI 05.1-92, ITINTEC 251-021, 022, 023, 025
Type: Yellow
Pine from the South, or Douglas Fir
Treatment:
AWPA-C4, C1, ITINTEC 251-026, 027, 034
Specifications
for Primary Networks (PN): Length 12 m, Class 6,
Group D
Specifications
for Secondary Networks (SN): Length 8 m, Class 6,
Group D
Crossarms
and Tables: ITINTEC 251.026, 251.027. 251-034
Crossarms
and Derivations 90x 254x 2400, Alignment
90x 115 x 2400 mm
Species:
Treated timber (Screw tree or similar)
Basic
Transformer Table: 300x3000x25 mm
PN/SN:
Primary Network/Secondary Network
Table
6: Wooden Posts and Crossarms
6.2
Grounding components
The
Grounding Design for the Medium Voltage Network is of
a simple installation in each support, while that for
the Low Voltage Network is only wrapped at the end of
each Branch shunted from the Feeder Circuits. These are
formed by a well with Vertical Copper Electrodes connected
in the first case to the point where the Insulator’s rods
meet, and in the second case to the Supporting Neutral.
The features of the components given in Table 7,
include a low Bimetallic Connector for the option of Aluminum
Alloy Conductors.
For
both Conductors’ materials
Conductor:
Annealing Bare Cu, (No 2 AWG): 35
mm2
No.
of Strands, Diameter, Ground: 7 x 2.52 mm, 0.31 kg/m
Maximum
Electric Resistance CC at 20oC: 0.53 W
/km
Electrode:
Cu Rod, Diameter: 16 mm, Length: 2.40 m.
Pressure
Terminal: Bronze, Electrode-Conductor Connection
"U"
Clamps: Copper plated Steel, Downward fastening PAT(*)
Bimetallic
Connector parallel tracks: Cu-Al
Application:
Neutral downward Connection PAT (*)
(*)
Grounded
Table
7 Grounding components
7.
COST OF WORKS AND INSTALLATIONS
The
Works Budget according to the option of material in Conductors,
in this case presents a slightly lower Cost of about 0.2%
in favor of Aluminum Conductor Networks Table 8.
In other projects this could increase up to 2.65% from
having to use Low Voltage Network Posts, with their one
meter of additional height, to comply with the demands
of the guard distances of Urban Networks.
With Aluminum With Copper
Concept
Conductor (US$) Conductor (US$)
PN SN PN SN
Materials 28,807.96 80.,823.69 27,177.49 80,685.70
Assembly
7,799.03 18,934.73 7,799.03 18,979.88
Transport
1,340.40 4,041.18 1,358.87 4,034.29
General
Expenses 5,392.11 15,569.94 5,450.31 15,554.98
Profits
3,594.74 8,650.86 3,633.54 10,369.99
Net
Cost 44,934.23 129,749.52 45,419.24
129,624.82
VAT
(18%) 8,088.16 23,354.91 8.175.46 23,332.47
Work
Costs 53,022.39 153,104.43 53,594.71 152,957.29
TOTALS
205,126.82 206,552.00
Table
8 Budgets in US$ of Works Studied in the Analyses
8.
COST/BENEFIT ANALYSIS METHOD
The
Engineering Design of the Primary Network (PN) and the
Secondary Networks (SN), as well as the equipping and
infrastructure, lead to an evaluation of investments (Table
8), as the Total Cost of the Project at the end of
a period, for both Conductors Materials which are compared.
On one side there are the Costs of Losses of Power and
Energy, as well as the operative costs that include Maintenance,
Re-investments, Recoveries, Additional items of Maintenance
and the Purchase of Energy. On the other side appear the
income from Sale of Energy and net Income: the evaluation
term of the assigned 20 years, corresponds to the Useful
Life interval, that the Aluminum Conductors are expected
to have in normal Environmental Conditions, the considered
Rate of Annual Interest being 12%.
8.1
Quantification of the Loss of Power and Energy
The
Operation of the Projects’ Electricity Networks covers
a Net Power (kW) required by Clients without including
loss, the Net Energy (kW-h) having to be determined, utilizing
a uniformly variable load factor between 0.3 and 0.4 within
the period of appraisal and consecutively the total respective
losses (kW and kW-h), according to the Study data obtained
with the Maximum Demand in each Low Voltage Feeder. Table
9 presents a sample of said analyses premises which
are applied to both options.
Net AA
Losses Cu Losses
Year
Power Energy Power Energy Power Energy
kW
kW-h kW kW-h kW kW-h
0
0 0 0 0 0 0
1
183.17 489,394 16.19 42,243 15.49 41,378
2
183.17 497,416 16.19 43.952 15.49 42,056
i
- - - - - -
i+1
- - - - - -
19
183.17 633,805 16.19 56,033 15.49 53,588
20
183.17 641,828 16.19 56,712 15.49
54,266
Table
9 Quantification of Net Power and Energy and loss
of same in a 20-year interval.
Evident
from the beginning has been the financial disadvantage
represented by the use of the Aluminum Conductor, due
principally to the great technical power losses (16.19
kW for Aluminum and 15.49 kW for Copper).
8.2
Quantification of Comparative Costs and Income
The
Quantification of Costs starts with the initial investment
(Total Budgets that do not include the cost of licenses
nor of rights to passage), while the Re-investment for
Renewal of Conductors is carried out with the Items of
Supplying the Aluminum Alloy Conductor and Accessories,
adding on the costs of reinstallation (that do not include
indirect costs) for the established Periods, which it
is not necessary to apply to Copper Conductors.
The
Cost of Power Losses is obtained by applying the Cost
per loss of Annual Power, in the same way as Costs of
Energy Loss are calculated on the Cost of the Bar of Energy
(purchase) according to the tariff. Then there is added,
as an annual constant, the Cost of Operations and Maintenance
that represents 2% of the Initial Investment, a criterion
that is also adopted for re-investments, in the intervals
during replacements.
The
Cost of Net Energy is calculated applying the Bar Tariff
(Purchase), and then the Total Cost is formed by adding
all the Costs during the year. Income from the Sale of
Energy (Net) is determined by the Sale Tariff to the Final
User and the Fixed Charge for Power. Finally, the Net
Income is the difference between the amounts of the Energy
Sale and Total Cost, showing the parameters used in the
evaluation (Table 10) and the indices of the VANE,
TIRE and Cost/Benefit (Co/Be) Appraisal (Table 11).
Cost
per Power Loss: US$/kW-Year 73.69
Bar
Tariff (Purchase): US$/kW-h 0.0697
Fixed
Charge by Capacity: US$/Client 0.5014
Sale
Tariff to Final User: US$/kW-h 0.1435
Discount
Rate: 12%
Exchange
Rate (Feb. 18, 2000): US$1 = New Sol 3.47
Table
10 Parameters of Cost/Benefit Financial Analyses
PN
and SN Networks with Aluminum Networks
with Electrolytic
According
to Useful Alloy Conductors Copper Conductors
Life
in Corrosive
Environment
VANE TIRE Co/Be VANE TIRE Co/Be
20
years No deterioration 28,476 14.01% 1,1382 29,821
14,09% 1.1444
20
years with deterioration 24,287 13.73% 1.1178 29,821
14.09% 1.1444
25
years with deterioration 30,070 13.95% 1.1459 37,498
14.38% 1,1815
30
years with deterioration 31,145 13.91% 1.1511 40,703
14.43% 1.1971
Table
11 Summary of Cost/Benefit Analyses of Investments
in MV-LV Networks
with Aluminum and Copper Conductors.
CONCLUSIONS
The
Comparative Cost/Benefit Financial Analyses of MV-LV Networks
with Aluminum and Copper Conductors, starting with a Real
and Complete Project, does not confirm, for the choice
of Aluminum, the traditionally supposed advantages of
better capital Opportunity Cost, greater Profitability
and greater Cost/Benefit ratio, even when considering
it as equally long-lasting as Copper during the 20 year
interval.
The
assumption that confers on the use of Aluminum Conductors
the greater advantage of "Requiring less initial investment",
in this analysis, proves to be almost misleading since
it is only 0.2% less than the Copper Conductors budget.
What is more, even increasing said difference to 2.65%
in order to utilize Low Voltage posts, which are a meter
taller, the financial indicators for 20 years in a hostile
environment show the Copper to be more favorable by increasing
the maintenance periods.
The
choice of Copper as the material for conductors for Medium
and Low Voltage Electricity Networks for periods of 20
years or more, will provide real advantages and efficiency
in the electricity business, because it will reduce the
needs for Field Personnel, Technical Losses, Maintenance
visits and Repair Costs, while at the same time improving
Reliability, Quality of Supply and the Safety of the Networks.
This
publication has been prepared by engineer Justo Yanque
M., M.E, National Engineering University, M.Sc. App –
FPMS, Belgium, who is a Specialized Consultant with ample
technical experience in carrying out electric-mechanical
projects.
Those
interested in further information on this matter, as well
as in obtaining the bibliographical references used, should
communicate with Procobre Peru.
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