Transcript Show Me the Money“Digester Revenue Streams”

Show Me the Money
“Digester Revenue Streams”
DCEO Clean Water Energy Efficiency Summit
Oak Brook, Illinois
December 8,2014
Cliff Haefke, Principal Research Engineer
Energy Resources Center @ University of Illinois at Chicago
US DOE CHP Technical Assistance Partnership
Outline of Presentation
• Drivers for CHP in WWTFs
• Digester (Biogas CHP) Revenue Streams
• CHP and Critical Infrastructure
•
Biogas CHP Development
Considerations
• Conclusion and Next Steps
US DOE CHP Technical Assistance
Partnerships (CHP TAPs)

Market Opportunity Analysis.
Supporting analyses of CHP market
opportunities in diverse markets including
industrial, federal, institutional, and
commercial sectors

Education and Outreach.

Technical Assistance.
Providing information on the energy and nonenergy benefits and applications of CHP to
state and local policy makers, regulators, end
users, trade associations, and others.
Providing technical assistance to end-users
and stakeholders to help them consider CHP,
waste heat to power, and/or district energy
with CHP in their facility and to help them
through the development process from initial
CHP screening to installation.
http://eere.energy.gov/manufacturi
ng/distributedenergy/chptaps.html
Midwest CHP TAP located out of the
Energy Resources Center at the
University of Illinois at Chicago
Combined Heat and Power (CHP)
•
•
•
•
•
An integrated energy system
Located at/or near facility
Generates electricity and/or mechanical power
Recovers waste heat for heating, cooling, and/or dehumidification
Can utilize a variety of technologies and/or fuels
30
units
94
units
56
units
Power Plant
Fuel
Fuel
32% efficiency
(Including T&D)
Onsite Boiler
80% efficiency
Electricity
CHP
75% efficiency
Fuel
100
units
Heat
45
units
Total Efficiency
~ 50%
Total Efficiency
~ 75%
4
CHP Concept in WWTPs
Source: Energy from Biogas CHP Systems with Gas Engines,
Stefan Kohler (MDE), October 24, 2007, www.cogeneration.org
Drivers for WWTPs relating to CHP



Desire to reduce energy
costs

Increase biogas production

Utility load shedding
Resiliency of Critical
Infrastructure

Availability of incentives

Enhanced biosolid
management

“Green” publicity
Sustainability
planning/emissions
reduction

Enhanced Reliability

Facility Upgrades
Source: Oct 2011 EPA/CHP Partnership Report: Opp. For CHP at WWTF:
Market Analysis and Lessons
6
Show Me the Money:
Biogas CHP Revenue Streams
1
CHP-Electricity, Renewable Natural Gas, or Transport Fuel
2
CHP-Thermal energy (digester, on-site use, greenhouse, or other use)
3
Co-digestion = additional energy revenue
4
Tipping fees/avoided costs of managing organic wastes
5
Solids effluent (fiber) (e.g., bedding, compost, REPeat)
6
Liquid effluent (reclaimed water) (e.g., irrigation)
7
Commercial carbon dioxide sales
8
Environmental attributes: renewable energy credits (RECs) and carbon credits
Electricity Revenue
 On-site use can offset electricity from grid =
electricity savings
 Net metering is another offset option
 Direct sales usually accomplished with a power
purchase agreement (PPA)
 Some utilities or states have standard offer
contracts
 Feed-in tariffs may be used to give preference to
types of renewable electricity
Thermal Energy Revenue
 For digesters, some heat is used to maintain temps;
this parasitic load can vary by season
 Maximize thermal recovery: digester insulation, genset
jacket, exhaust stack recovery, oil cooler
 On-site uses can offset costs for electricity, natural gas
or propane (“revenue” in the form of savings)
 Thermal energy does not store or travel well, so colocated or adjacent uses are better
 Can stimulate economic development (e.g.,
manufacturing or food processing)
 Values typically expressed in BTUs
Co-Digestion Revenue
 Dairy digester example: adding 30% FOG or liquid
wastes (e.g., dairy whey, brewery, food
processing) can double gas production
 WWTP accepting similar materials can expect
significant increases in gas production,
depending on the materials received
 Extra costs for storage/mixing tanks for
measured, consistent input
 Risk: digester upset; practice caution with added
feedstocks
Tip Fee Revenue
 Avoided costs of managing organic residuals;
“revenue” in the form of savings
 Tip fees can be significant revenue for
digesters receiving outside organics
 Value of tip fees based on local disposal fees
or costs of alternative uses
 Risk: as more alternative uses develop for
same materials, the market value can shift
(e.g., from tip fees to costs)
Biosolids Revenue
 Project biosolids vary by source: WWTP, dairy,
MSW digestion
 WWTP biosolids (EPA regulated by class): Class A
heat treatment/pasteurization leads to land
application, compost or fertilizer
 Dairy digester: 1st level recovery of fiber for
bedding, compost or value-added peat
replacement; 2nd level recovery of suspended
solids for nutrients
 MSW digester: typically mixed with other
residuals into compost products
Liquid Effluent Revenue
 Value as reclaimed water for irrigation (livestock
producers already reuse this water)
 Not common at WWTPs; mostly seen in
demonstration projects
 Examples: application on golf courses
 May become more valuable as droughts intensify
 Can be added treatment cost, even for nonpotable water uses
Commercial Carbon Dioxide
 Emerging market opportunity
 Based on capturing and using BOTH methane
and carbon dioxide from biogas
 Most common uses in greenhouse food
production, co-located with biogas project
 Capture, compression and transport off site
for other end uses is more complicated still
“Environmental Attributes”








Catch-all for values separate from electrons or BTUs
Renewable Energy Credits (RECs) – the environmental benefits
from 1 MW of electricity
Carbon credits or offsets for carbon dioxide reductions can occur
from fuel switching renewable biogas for power (in the absence of
RECs) or fuels, like nat gas or propane.
Carbon credits or offsets for methane reductions can occur with
digesters at livestock facilities or by diverting food residuals from
landfills
Carbon credits are not for business as usual activities at landfills or
WWTPs; must be “additional”
Values differ by voluntary or compliance markets
Verification and transaction costs can be significant
Risks: policy give and take at all levels
Critical Infrastructure
“Critical infrastructure” refers
to those assets, systems, and
networks that, if
incapacitated, would have a
substantial negative impact on
national security, national
economic security, or national
public health and safety.”
Patriot Act of 2001 Section 1016 (e)
Applications:
o Hospitals and healthcare
centers
o Water / wastewater
treatment plants
o Police, fire, and public
safety
o Centers of refuge (often
schools or universities)
o Military/National Security
o Food distribution facilities
o Telecom and data centers
Infrastructure Resiliency
 A key principle of disaster preparedness
 Ability to maintain operation despite a devastating
event
 CHP (if properly configured):
◦ Offers the opportunity to improve CI resiliency
◦ Can continue to operate, providing uninterrupted
supply of electricity and heating/cooling to the
host facility
Uninterrupted Operation
Requirements
•
•
•
•
•
Black start capability
◦ allows the system to start up independently from the grid
Generators capable of grid-independent operation
◦ the system must be able to operate without the grid power signal
Ample carrying capacity
◦ system size must match critical loads
Parallel utility interconnection and switchgear controls
◦ the system must be able to disconnect from the grid, support
critical loads, and reconnect after an event
Uninterruptable
◦ The equipment runs 24/7 so no lag in power outage switch over
Wastewater Treatment
A Critical Facility



What is the critical load for the WWTF?
• Are emergency gensets on-site?
• What size?
• What interconnection equipment is in place with the
utility? – May reduce cost of CHP system
Does the WWTF have natural gas available?
• Can it be stored on site?
• What is the current diesel/fuel oil storage in run time hours
Energy independence is a pathway for resolving critical facility
concerns
• Example Gresham, Oregon WWTF
19
WWTF Biogas CHP… early questions
to get ready steps for analysis of
systems with digesters
• What are the biogas volumes by month (seasonality) – Determines size
of power equipment unless natural gas is also available
• What is the Btu content of the biogas - 600 Btu/scf is a rule of thumb
• What contaminants are in the biogas? – Check for H2S, moisture,
siloxanes
• What additional revenue streams can result from a biogas CHP system
• One year’s worth of electric and thermal energy bills
• What is the critical load in power outages
20
Parameters for CHP Success
 CHP Champion on site
 Interaction and Relationship with local Utility
 System design
•
•
•
•
•
Collaborate with DOE CHP TAPs
Experienced project developer preferred
Biogas scrubbing a key balance of plant (BOP) component
Using co-digestion: It can flip the economics positive (natural gas can
supplement)
Visit DOE CHP Deployment website for project profiles
http://www1.eere.energy.gov/manufacturing/distributedenergy/chp_projects.html

Operation and Maintenance
• Requires personnel or 3rd party with appropriate CHP O&M training
• Specific experience with biogas scrubbing issues and maintenance
important
Source: Oct 2011 EPA/CHP Partnership Report: Opp. For CHP at WWTF:
Market Analysis and Lessons
21
Conclusion & Next Steps
 Economic advantage – make your own power for on-site
use or sell it/wheel it
 A long-term power purchase agreement is helpful
 Quality design is essential
 Use the biogas efficiently – maximize heat recovery
 Services available to help with next steps
◦ CHP Qualification Screenings (go/no go scan of potential)
◦ Technical assistance
22
CHP TAP Technical Development
Assistance
Screening and
Preliminary
Analysis
Quick
screening
questions with
spreadsheet
payback
calculator.
Feasibility
Analysis
Uses available site
information.
Estimate: savings,
Installation costs,
simple paybacks,
equipment sizing
and type.
Investment
Grade Analysis
Procurement,
Operations,
Maintenance,
Commissioning
3rd Party review of
Engineering
Analysis.
Review
equipment sizing
and choices.
Review
specifications
and bids,
Limited
operational
analysis
16
Questions?
Thank You
Cliff Haefke, Principal Research Engineer
US DOE CHP Technical Assistance Partnership
www.MidwestCHPTAP.org
[email protected]
(312) 355-3476