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Show Me the Money “Digester Revenue Streams” DCEO Clean Water Energy Efficiency Summit Oak Brook, Illinois December 8,2014 Cliff Haefke, Principal Research.

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Presentation on theme: "Show Me the Money “Digester Revenue Streams” DCEO Clean Water Energy Efficiency Summit Oak Brook, Illinois December 8,2014 Cliff Haefke, Principal Research."— Presentation transcript:

1 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

2 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

3  Market Opportunity Analysis. Supporting analyses of CHP market opportunities in diverse markets including industrial, federal, institutional, and commercial sectors  Education and Outreach. Providing information on the energy and non-energy benefits and applications of CHP to state and local policy makers, regulators, end users, trade associations, and others.  Technical Assistance. 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. US DOE CHP Technical Assistance Partnerships (CHP TAPs) ng/distributedenergy/chptaps.html Midwest CHP TAP located out of the Energy Resources Center at the University of Illinois at Chicago

4 Fuel 100 units CHP 75% efficiency CHP 75% efficiency Total Efficiency ~ 75% Total Efficiency ~ 75% 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 Fuel 30 units Power Plant 32% efficiency (Including T&D) Power Plant 32% efficiency (Including T&D) Onsite Boiler 80% efficiency Onsite Boiler 80% efficiency 45 units Electricity Heat Total Efficiency ~ 50% Total Efficiency ~ 50% 94 units 56 units 4

5 CHP Concept in WWTPs Source: Energy from Biogas CHP Systems with Gas Engines, Stefan Kohler (MDE), October 24, 2007,

6 Drivers for WWTPs relating to CHP  Desire to reduce energy costs  Resiliency of Critical Infrastructure  Sustainability planning/emissions reduction  Enhanced Reliability  Facility Upgrades  Increase biogas production  Utility load shedding  Availability of incentives  Enhanced biosolid management  “Green” publicity Source: Oct 2011 EPA/CHP Partnership Report: Opp. For CHP at WWTF: Market Analysis and Lessons 6

7 Show Me the Money: Biogas CHP Revenue Streams 1CHP-Electricity, Renewable Natural Gas, or Transport Fuel 2CHP-Thermal energy (digester, on-site use, greenhouse, or other use) 3Co-digestion = additional energy revenue 4Tipping fees/avoided costs of managing organic wastes 5Solids effluent (fiber) (e.g., bedding, compost, REPeat) 6Liquid effluent (reclaimed water) (e.g., irrigation) 7Commercial carbon dioxide sales 8Environmental attributes: renewable energy credits (RECs) and carbon credits

8 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

9 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 co-located or adjacent uses are better  Can stimulate economic development (e.g., manufacturing or food processing)  Values typically expressed in BTUs

10 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

11 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)

12 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: 1 st level recovery of fiber for bedding, compost or value-added peat replacement; 2 nd level recovery of suspended solids for nutrients  MSW digester: typically mixed with other residuals into compost products

13 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 non- potable water uses

14 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

15 “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

16 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

17 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

18 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

19 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

20 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

21  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 ml ml  Operation and Maintenance Requires personnel or 3rd party with appropriate CHP O&M training Specific experience with biogas scrubbing issues and maintenance important Parameters for CHP Success Source: Oct 2011 EPA/CHP Partnership Report: Opp. For CHP at WWTF: Market Analysis and Lessons 21

22 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

23 Screening and Preliminary Analysis Feasibility Analysis Investment Grade Analysis Procurement, Operations, Maintenance, Commissioning Uses available site information. Estimate: savings, Installation costs, simple paybacks, equipment sizing and type. Quick screening questions with spreadsheet payback calculator. 3 rd Party review of Engineering Analysis. Review equipment sizing and choices. Review specifications and bids, Limited operational analysis CHP TAP Technical Development Assistance

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25 Questions? Thank You Cliff Haefke, Principal Research Engineer US DOE CHP Technical Assistance Partnership (312) 355-3476

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