Cost analysis and profitability of the cable train : a mobile platform for manufacturing underground cable systems

Abstract

As the profitability and technological viability of renewable energy projects continues to improve, the issue of connecting remote supply and demand becomes increasingly important. In certain instances where supply and demand locations are far apart, high voltage direct current (HVDC) power transmission lines become more efficient and cost effective than traditional alternating current lines. Installing overhead HVDC cables is sometimes the simplest, cheapest solution to this problem, but there is often difficulty in getting these projects approved due to public displeasure as well as higher security risks. The alternative solution, laying underground lines, can be four to fourteen times more costly than overhead lines. However, over long distances, there is a break-even distance where underground HVDC becomes more efficient than overhead because of factors such as lower power losses, less accessories are necessary, and a smaller right-of-way is required. Luke A. Gray, Professor Alexander H. Slocum, et al. have proposed a method of transporting raw materials along existing railroad lines and continuously manufacturing and laying HVDC cables in trenches made along the railroad's right-of-way.We hypothesize that it is possible to lay HVDC cable at a lower cost than traditional methods by using this newly proposed solution. This paper investigates the cost breakdowns of both the overhead and operating costs involved in a "Cable Train" HVDC cable manufacturing system and does a fiscal analysis of profitability and potential for scaling. The overhead costs of the "Cable Train" provide a relatively high barrier to entry at $61 million, and operating costs for the project in our chosen configuration are $2.8 million per mile. Compared to $21.1 million for other projects discussed in this paper in the same configuration, the Cable Train lays cable at a much lower cost. For expected project lengths of over 100 miles, overhead becomes relatively small, indicating high potential for the "Cable Train" to be used on different projects. Methods used to calculate the costs of overhead on the "Cable Train" rely on quotes (minimum of two) provided by anonymous vendors, while operating costs largely rely on industrial estimation methods requiring two or more statistics gathered by myself, Gray, or by data conglomerates.