1. ULTRASOUND & TOTEX: THE PERFECT MATCH BETWEEN TECHNOLOGY AND ECONOMY 19 th European Biosolids & Organic Resources Conference & Exhibition 17 th - 19 th November 2014, Manchester, UK 17 th - 19 th November 2014, Manchester, UK Luis Vergara Technical Director

2. 19 th European Biosolids & Organic Resources Conference & Exhibition Ultrasound & TOTEX: the perfect match between technology and economy Shifting to a new mind-set… Shifting to a new mind-set… WHY TOTEX? WHY TOTEX? If one of the targets is to get… AMP6 Or maybe a new approach is now required (AMP6, etc.) Then, what is the most appropriate strategy?

3. 19 th European Biosolids & Organic Resources Conference & Exhibition Ultrasound & TOTEX: the perfect match between technology and economy The best way to engage CAPEX & OPEX The best way to engage CAPEX & OPEX BUT WHAT IS TOTEX? BUT WHAT IS TOTEX? holistic Ofwat  …“A TOTEX approach considers expenditure in a more holistic way. This means looking at a total expenditure requirement rather than separate OPEX & CAPEX allowances” Ofwat water is not the only sector …But water is not the only sector interested in TOTEX… reducing cost over the long term  …”An approach focused on reducing cost over the long term, would provide lasting benefits for customers (RIIO models)”Ofgem

4. 19 th European Biosolids & Organic Resources Conference & Exhibition Ultrasound & TOTEX: the perfect match between technology and economy Some conceptualisations Some conceptualisations MODELLING TOTEX MODELLING TOTEX nowvaluablelater on Money now is more valuable than money later on Net Present Value The Net Present Value (NPV) could be then used as a helpful cash flow metric tool

5. 19 th European Biosolids & Organic Resources Conference & Exhibition Ultrasound & TOTEX: the perfect match between technology and economy Parameterizing & mathematizing the NPV Parameterizing & mathematizing the NPV EVALUATING TOTEX EVALUATING TOTEX T Net Present Value The Net Present Value (NPV) could be then an useful tool Key parameter!!!

6. 19 th European Biosolids & Organic Resources Conference & Exhibition Ultrasound & TOTEX: the perfect match between technology and economy Different scenarios for different “r” Different scenarios for different “r” SENSITIVE ANALYSIS SENSITIVE ANALYSIS r opportunity cost of capital If r = the rate of return that could be earned on an investment in the financial markets with similar risk (= the opportunity cost of capital) decidingr Then, what to consider when deciding about r? sensitive analysis … A sensitive analysis will cover a wide range of possibilities Driver (from last 20 years) Increase/yUnit Stock Market6.12% Retail Price Index3.75% Electricity5.71%

7. WwTW Wastewater Treatment Works (WwTW). And within this market two applications: Anaerobic Digestion Bulking and foaming ADF Anaerobic Digestion Facilities (ADF) applystandard unit5 kW scalable  Cases displayed below have been calculated to apply just one standard unit (5 kW) which is obviously scalable (  ) 19 th European Biosolids & Organic Resources Conference & Exhibition Ultrasound & TOTEX: the perfect match between technology and economy … Where we will see two different markets … Where we will see two different markets NOW, THE MATCHING… NOW, THE MATCHING…

8. 19 th European Biosolids & Organic Resources Conference & Exhibition Ultrasound & TOTEX: the perfect match between technology and economy Anaerobic digestion (AD) Anaerobic digestion (AD) SO, A FIRST APPLICATION IN WwTW SO, A FIRST APPLICATION IN WwTW Let’s consider a WwTW... Assuming typical costs/prices:  0.10 £/kWh purchased  0.12 £/kWh generated  20 £/t WS (disposal) ultrasoundTOTEX Then, it is possible to assess the impact of ultrasound on TOTEX WS = Wet Solids WwTW parameter QuantityUnit TS load to be digested8.0t TS/d Biogas production2,160Nm 3 /d TS load in digestate5.3t TS/d Cake dryness20% Sludge load for disposal26.5t WS/d

9. 19 th European Biosolids & Organic Resources Conference & Exhibition Ultrasound & TOTEX: the perfect match between technology and economy Ultrasound improves the VS-degradation Ultrasound improves the VS-degradation BENEFITS (COLLECTION) FOR AD IN WwTW BENEFITS (COLLECTION) FOR AD IN WwTW 5 kW Just a 5 kW reactor is required very simple installation … And a very simple installation!!! improvement So, assuming an improvement of approx. 20% in the VS-deg: Collection (C) QuantityUnit Energy production45.84£k/y Sludge reduction33.71£k/y Others*5.79£k/y * Polymer & dewatering 1.5 x 1.1 x 0.3 m

10. 19 th European Biosolids & Organic Resources Conference & Exhibition Ultrasound & TOTEX: the perfect match between technology and economy O&M costs have to be faced O&M costs have to be faced COSTS (PAYMENT) FOR AD IN WwTW COSTS (PAYMENT) FOR AD IN WwTW onlyconsumptionconsumables … Which only are consumption & consumables Thus, unlike other technologies:  Easy adaptation to existing processes  No problem with “by-products” (NH 3, dioxins, …)  Simple installation So, for the 5 kW unit: Payment (P) QuantityUnit Energy consumption6.80£k/y Consumables3.75£k/y Others0.00£k/y

11. 19 th European Biosolids & Organic Resources Conference & Exhibition Ultrasound & TOTEX: the perfect match between technology and economy The 5 kW reactor is the asset to be evaluated The 5 kW reactor is the asset to be evaluated ESTIMATED NPV FOR AD IN WwTW ESTIMATED NPV FOR AD IN WwTW K  All the expenditures are included in K (reactor + ancillaries + installation…) n  10 years have been considered as the asset lifetime in n r  4 has been selected as a reasonable value for rParameterQuantityUnit K (variable)175£k n10y r4% PV607£k NPV432£k

12. NPV = f(r) and there is one r that makes f(r) = 0 Internal Rate of Return(IRR) This r is the Internal Rate of Return (IRR) the highest IRR is preferred IIR is used to evaluate the attractiveness of an investment and the one with the highest IRR is preferred Ultrawavesextremely high IRR Ultrawaves technology offers an extremely high IRR 19 th European Biosolids & Organic Resources Conference & Exhibition Ultrasound & TOTEX: the perfect match between technology and economy Let’s consider different values for r… Let’s consider different values for r… SENSITIVE ANALYSIS FOR AD IN WwTW SENSITIVE ANALYSIS FOR AD IN WwTWrNPV 2497 3463 4432 5403 6375 …… 10285 15200 41.40 K & n = constants

13. 19 th European Biosolids & Organic Resources Conference & Exhibition Ultrasound & TOTEX: the perfect match between technology and economy Bulking and foaming Bulking and foaming ANOTHER APPLICATION IN WwTW ANOTHER APPLICATION IN WwTW Let’s consider a WwTW... Assuming typical costs/prices:  0.10 £/kWh purchased  0.15 £/kg (Chemicals)  0.4 £/kg TS (disposal) ultrasoundTOTEX So, it is also possible to assess the impact of ultrasound on TOTEX WwTW parameter QuantityUnit Type of processActivated Sludge RAS flow12,000m 3 /d Dominant FilamentM. Parvicella PAX dose per unit of RAS150ppm Sludge load for disposal1.2t TS/d

14. 19 th European Biosolids & Organic Resources Conference & Exhibition Ultrasound & TOTEX: the perfect match between technology and economy Ultrasound removes just the filaments Ultrasound removes just the filaments BENEFITS FOR BULKING & FOAMING BENEFITS FOR BULKING & FOAMING 5 kW Just 5 kW are required again easy installation … and the easy installation!! reduction So, assuming a reduction of approx. 25% in the SVI: Collection (C) QuantityUnit Chemicals48.60£k/y Sludge reduction23.09£k/y Others*9.82£k/y * O&M works & RAS pumping saving

15. 19 th European Biosolids & Organic Resources Conference & Exhibition Ultrasound & TOTEX: the perfect match between technology and economy So, the 5 kW reactor is the asset again So, the 5 kW reactor is the asset again NPV AND IRR FOR BULKING & FOAMING NPV AND IRR FOR BULKING & FOAMING  O&M costs associated with the 5 kW reactor are the same as AD  The parameters K, n and r relative to NPV have also remained unmodified the IRR is also very good!!  And for this case the IRR is also very good!!ParameterQuantityUnit K (variable)175£k n10y r4% PV576£k NPV401£k rNPV39.10

16. 19 th European Biosolids & Organic Resources Conference & Exhibition Ultrasound & TOTEX: the perfect match between technology and economy Anaerobic Digestion Facilities (ADF) Anaerobic Digestion Facilities (ADF) NOW, A DIFFERENT MARKET: RENEWABLES NOW, A DIFFERENT MARKET: RENEWABLES Let’s consider an ADF... Assuming typical costs/prices:  11.52 p/kWh generated (FITs)  0.05 £/kg (feedstock) ultrasound TOTEX The impact of ultrasound on TOTEX has two scenarios: energy production feedstock saving!! energy production and/or feedstock saving!! DS = Dry Solids ADF parameter QuantityUnit No. of digesters2Tank FeedstockMaize silage Load to be digested25t/d Plant capacity475kW HRT60d Biogas production4,500Nm 3 /d

17. 19 th European Biosolids & Organic Resources Conference & Exhibition Ultrasound & TOTEX: the perfect match between technology and economy Ultrasound improves the VS-deg and mixing Ultrasound improves the VS-deg and mixing BENEFITS FOR ADF: ENERGY OR FEEDSTOCK BENEFITS FOR ADF: ENERGY OR FEEDSTOCK 5 kW Just 5 kW are newly required very simple installation … And the very simple installation!!! improvement So, assuming an improvement of approx. 15% in the VS-degradation: Collection (C) Scenario 1 Scenario 2 Unit Energy production78.690£k/y Feedstock saving058.01£k/y Mixing5.26 £k/y 2 x 2 x 2 m Small container: 2 x 2 x 2 m Scenario 1: Electricity production & Scenario 2: Feedstock saving

18. 19 th European Biosolids & Organic Resources Conference & Exhibition Ultrasound & TOTEX: the perfect match between technology and economy Once more, the 5 kW system is the asset Once more, the 5 kW system is the asset ESTIMATED NPV & IRR FOR ADF ESTIMATED NPV & IRR FOR ADF  O&M costs, K, n and r are the same as the cases above IRR is pretty large once again!!  … And the IRR is pretty large once again!!Parameter Scenario 1 Scenario 2 Unit K (variable)175 £k n10 y r44% PV591423£k NPV416248£k r1r2NPV40.227.10

19. Mission possible: successful implementation

20. 19 th European Biosolids & Organic Resources Conference & Exhibition Ultrasound & TOTEX: the perfect match between technology and economy … come to visit Ultrawaves at the Exhibitors Room!! Any questions?