Friday, March 24, 2006
YBCO COsts - Responses from AMSC
In issue 2005 of Superconductor Week (20th March 2006), Angelo Santamaria (VP and General Manager, AMSC Wires) published a brief response to our article (see below). This was followed 3 days later by a press release from AMSC specifcially on the issue of the capital cost of the pilot plant and claiming an improvement of 240% in the productivity in Dec. 2007 compared with previous AMSC announcements (720 instead of 300 km/y).
Our original article was based on AMSC's data, and the "incorrect factual assumptions" mentioned by Angelo are AMSC's stated and published numbers.
Angelo appears to have missed the point that the important numbers refer to the productivity of the full-scale plant, not the pilot plant. Our estimates of the capital cost element of YBCO tape in the full production plant are entirely unaffected by what he says.
We used AMSC's published accounting reports for how long the pilot plant equipment lasts. We generously assumed that the pilot plant would remain in full production with no further investment required for a period of 10 years. Generally, if significant company assets have an engineering life which is longer than the baseline "accounting" life, then this should be published in a Note to the accounts.
The terms of the DoD agreement are public, and this is an extract. The DoD/DoE funding is to be used: "to demonstrate the technical and economic feasibility for expansion to even larger production levels. The program also includes the establishment of essential manufacturing infrastructure, including standard operating procedures, quality control, preventive maintenance, failure analysis and statistical control".
There may be some room for error in our assumption of the level of capital in the DoD funding but as Angelo does not make this point we have to assume that we are substantially correct.
Angelo Santamaria's op-ed piece said:
We read, with some surprise and puzzlement, Philip Sargent’s analysis (see Superconductor Week, Vol 20, No 2) of the cost of producing YBCO wire using American Superconductor’s RABiTS/MOD process.
Sargent’s analysis is fundamentally flawed because it rests on incorrect factual assumptions. Much of the equipment that has been procured for our pilot line has, in fact, much higher capacity than will be utilized for pilot production purposes only. Moreover, this same equipment will be used in the planned scale up of wider strip processing, and will form an integral part of our full-scale manufacturing line, leveraging the value of the investment in the pilot plant.
In short, nothin in Sargent's analysis alters our perspective that our plan provies a very practical and viable approach to scaling up low-cost, high-performance and mass-producable superconductor wire* to meet the burgeoning market for HTS wire*.
[* in fact he is referring to tape, not round wire.]
To read the complete issue, order Issue 2005 of Superconductor Week.
Saturday, March 04, 2006
Capital Costs May Make YBCO Coated Conductor Cost-Prohibitive
A solid, commercially-based roadmap for commercializing YBCO coated conductors has been constructed by a leading developer. However, we have added some dates and cost implications to this roadmap. While we do not assert that YBCO will not be a stunning success, we believe it might remain in the commercialization phase a little longer than everyone hoped.
The DOE has recently given American Superconductor and IGC SuperPower capital grants for YBCO tape pilot plants. If we assume that YBCO cost is dominated by capital cost, and that material and processing costs for YBCO tape are negligible, we can calculate a minimum cost of the YBCO tape.
Estimating the useful lifetime of a plant for one proposed pilot plant, the cost works out to be $65/kA-m, or 2.6 times the price target. For one proposed production plant, the price could eventually go down to $11/kA-m. This is still out of reach of the target $5-$10/kA-m that has been quoted as necessary for commercializing liquid nitrogen-cooled transformers.
The time necessary to reach the stage of a production plant has also been underestimated. We expect a baseline improvement rate of cost-effectiveness might be 7% a year, as is historical for the relatively mature NbTi industry. However, even taking the fastest development ever seen in any manufacturing process industry, hard disk drives, the capital cost element of the tape will still be $11/kA-m in 2026.
Additional topics covered in the story include: Cost of YBCO coated conductor materials - Costs and production yields for pre-commercial and “production” plants - Likely improvements in capital effectiveness between plant generations - Comments on Japanese YBCO manufacture - Comments on BSCCO.
To read the complete article, order Issue 2002 of Superconductor Week.