A Tool to Calculate Corrosion-Related Costs

Issue 5 and Volume 112.

By Philip G. Rahrig, American Galvanizer’s Association

Paint or hot-dip galvanize? This tool may help you decide.

A large percentage of a generating facility’s budget is often dedicated to maintenance of steel structures, repairing or replacing steel because of corrosion. The use of hot-dip galvanized steel is already widely endorsed in the distribution and transmission sectors largely because there are little or no maintenance costs for 60 to 80 years, which usually exceeds the planned useful life. The zinc coating applied during the hot-dip galvanizing process is abrasion resistant during tower and substation erection and is durable in almost all atmospheric/weather conditions. Galvanized steel also is economically competitive on an initial cost basis with most two- and three-coat systems of epoxy urethane combinations and may carry only a 5 to 10 percent initial cost premium over the most basic primer/one-coat systems.

So, let’s examine why hot-dip galvanized steel for power production facilities may be just as applicable as it is in distribution and transmission.

Maintenance Factor

While initial cost is often the decisive factor when selecting a corrosion protection system for new power plant construction, there are often other costs that dwarf this initial funding outlay. Those costs are associated with scheduled maintenance during shutdown necessary to protect the facility from corrosion over the planned service life. For maximum protection of the asset, plans should be based on an ideal maintenance cycle. If a paint system is used for corrosion protection, an ideal cycle calls for touchup, maintenance painting and full-repainting prior to visual evidence of substrate steel corrosion. However, in most power generating plants a practical, less rigorous cycle is used. This typically means that maintenance is done when the coating has deteriorated to the point where the project looks to be in disrepair and iron oxide (rust) is visibly evident. Often, this delay creates an unsafe operating condition. If hot-dip galvanizing is chosen for corrosion protection, maintenance normally occurs many decades after the initial coating is applied and usually requires only applying a zinc-rich spray coating to extend the service life.

To determine the timing of practical maintenance, most paint coating systems have been tested in a laboratory using accelerated corrosion mechanisms. To be sure, if the testing indicates a touchup painting should be performed in, say, year eight, a maintenance paint applied in year 13 and a full repaint in year 18, the actual project may require maintenance according to normal wear and tear and the toll environmental corrosive elements have taken. That may mean earlier than planned maintenance indicated by the accelerated testing.

Extensive field testing of hot-dip galvanized steel has been conducted since 1920 and actual performance data collected to develop the predictive model/chart in Figure 1. As it indicates, with an American Society for Testing and Materials (ASTM) A 123 specified minimum coating thickness of 3.9 mils (100 microns), galvanizing will protect the steel from corrosion and be maintenance-free in an industrial setting like a generating plant for 70 years or longer.

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Comparing the maintenance costs associated with the performance of a paint system to hot-dip galvanizing can be an arduous number-crunching exercise further complicated by the various performance characteristics each coating system provides. A three-coat inorganic zinc-epoxy-polyurethane system may have initial durability, while hot-dip galvanizing provides corrosion protection inside hollow structural sections. A zinc-rich paint may be the standard of past projects, resulting in a reluctance to change. But, once the field is narrowed to a couple of optimal coating systems according to desired performance, it is important to use all the financial tools and models available to quantify future costs as accurately as possible, especially with maintenance budgets shrinking and the reality of substantial long-term maintenance costs. One tool is the lfe-cycle cost (LCC) calculator now available at www.galvanizingcost.com. As the URL implies, this site compares the initial and life-cycle costs for 30 (one, two or three coat) paint systems to hot-dip galvanizing.

Life-Cycle Cost

Summing up all costs associated with the initial application and maintenance of a corrosion protection system over the life of a power plant, the LCC calculator output offers definitive data showing which system will prove most economical in the long run. Calculating LCC is rather complex as the value of money changes over time. As a result, calculating LCC for maintenance must consider the effect inflation will have on future expenditures and, conversely, the lost opportunity to invest money at an interest rate over the life of the project. The LCC calculator does that, using established financial industry equations and a database of initial cost data and specific project input provided by the user.

Power plant projects located in industrial areas may experience aggressive corrosion initiated by sulfide and chloride emissions.
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The costs of coating materials, steel surface preparation and in-shop and field application labor/materials are included in the database, which drives the calculations of both initial cost and life-cycle cost. The database also contains time information (based on corrosion rates) until coating touchup, first maintenance repaint and full repaint. As the LCC calculator advances from page to page, other user-provided information is required in response to “pull-down” menus, including:

  1. Coating type for primer, intermediate (if applicable) and topcoat (if applicable). For example: inorganic zinc primer, epoxy intermediate coat, and polyurethane topcoat.
  2. Power plant design and expected life.
  3. Service life environment per ISO 12944-2 Classification of Environments.
  4. Project structural member composition.
  5. Surface preparation to be used.
  6. Shop or field application of the paint.
  7. Spray or brush application.
  8. Paint material type.
  9. Total project size in square feet or tons.
  10. Cost of hot-dip galvanizing or the national average.
  11. Inflation rate to determine the cost of future maintenance.
  12. Interest rate to calculate the investment opportunity lost.

The primary driver and input variable of the life-cycle cost calculation is the corrosion data for the project’s environmental location. If a power generation plant is in a rural area, corrosion rates are low because of lower corrosive elements in the air. For a project in an industrial area, aggressive corrosion may be initiated by sulfide and chloride emissions from the plant including high levels of automobile/truck exhaust. There are four input options for the environment and all correspond to categories described in ISO 12944-2 “Classification of Environments,” and the LCC calculator uses the corrosion data associated with the chosen environment.

The financial component of the LCC calculator also may be customized and based on standard net future value (NFV) and net present value (NPV) calculations where the time value of money is considered. The user selects what rate of inflation is assumed over the life of the project to determine the value of money at each maintenance time and the average interest rate future expenditures on maintenance could earn; that is, the lost opportunity cost. Both are used to calculate the more easily understood and meaningful average equivalent annual cost (AEAC) for each coating system being modeled for any specific project.

NFV = initial cost [(1+i)n], where i = inflation; n = project life in years

NPV = NFV[1/(1+i)n], where i = interest rate; n = project life in years

AEAC = NPV[i(1+i)n/(1+i)n – 1], where i = interest rate; n = project life in years

The information on cost of each paint system and its practical service sequence in years for each of the ISO environments is contained in a database. Based on the user’s selection of a particular coating system, the software accesses the appropriate field and incorporates the data into the life-cycle calculation. There are two options for the cost information of hot-dip galvanizing, also in a database. The user may either select the default (which is a U.S. average cost) or input any number in dollars per pound or dollars per kilogram, based on market information in his/her locale.

The objective output of the LCC calculator will be a direct comparison of the calculated, initial project cost of two corrosion protection systems, one of them being hot-dip galvanizing. More importantly, the output will provide a comparison of the two systems’ life-cycle cost based on opportunity cost interest rate and projected inflation rate. This direct comparison should simplify the selection of the most economical corrosion protection system for the life of the power plant. The LCC calculator does not impute indirect costs related to planned/unplanned maintenance. Those costs can be often far greater than the actual repair labor and materials, making the selection of hot-dip galvanizing or paint even more critical.

LCC in Practice

To more clearly understand how the calculator works, consider this example. Examining an average-size power plant under construction and two different corrosion protection methods, the following input was made into the LCC calculator to compare hot-dip galvanizing and a typical three-coat paint system of inorganic zinc-rich paint, epoxy and polyurethane.

Parameters include a 60-year service life, a very highly corrosive industrial environment, 3 percent inflation, 6 percent rate of interest and 3,000 tons of medium-size structural steel.

The initial cost of the paint system equals $2.30/ft2. Hot-dip galvanizing would initially cost $1.80/ft2 and seems like the logical choice to protect the steel from corrosion. That is only a small part of the story, however, considering the paint system would require touchup in year 15, maintenance painting in year 20 and a full repaint in year 28. The touchup and maintenance repaint would repeat in years 43 and 58, respectively, to protect the steel for the projected service life of 60 years.

When these costs are annualized in present dollars, the cost to utilize paint for the power plant is $0.47/ft2/year, or over the planned life a total of more than $4.5 million. For the same plant protected from corrosion by hot-dip galvanizing, the costs are $0.16/ft2/year, or $1.5 million over the lifetime.

Author: Philip G. Rahrig is Executive Director of the American Galvanizers Association, based in Centennial, Colo.