Nineteen Agencies Team to Convert Biosolids to Energy for Regional Solution

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1 Nineteen Agencies Team to Convert Biosolids to Energy for Regional Solution Robert Gillette*, Todd Jordan (Carollo Engineers, Inc.) Caroline Quinn (Delta Diablo Sanitation ) EJ Shalaby (West County Wastewater ) *2880 Gateway Oaks Drive Suite 300 Sacramento, CA BACKGROUND Biosolids contain 10,000 to 12,000 BTUs per pound of volatile solids, latent energy that can be harnessed via capture and combustion of methane gas generated from anaerobic or direct combustion of the biosolids. Biosolids potential for renewable energy is especially important in urban areas, where their use as an agricultural product is limited by lack of suitable acreage or increasing restrictions on land application. In California, conventional biosolids handling options are also threatened by multiple regulatory initiatives, including solid waste initiatives to reduce landfill disposal and air quality initiatives to reduce volatile organic carbons, which are typically emitted from biosolids composting operations. Of the several wastewater agencies located in the San Francisco Bay Area of California, the estimated biosolids production exceeds 200,000 wet tons per year. Biosolids disposal and use locations for the Bay Area agencies require a broad land base that extends to outlying counties as far north as Sacramento County and as far south as Merced County. For many agencies, this involves long distance hauling of biosolids, requiring additional fuel and creating air pollution, including greenhouse gas emissions. At the same time, there is great need to expand our renewable energy resources. Progress towards meeting California s ambitious bioenergy goals has been slow, and in some cases, California is losing ground. 1 Meeting California s 20 percent Renewable Portfolio Standard (RPS) goal and the 2010 biopower targets would require an additional 6,562 GWh biopower generation annually assuming that total electricity consumption in 2010 will remain the same as in 2008 at 307,141 GWh. 2 The Global Warming Solutions Act, which requires a 25% cut in the California s greenhouse gas (GHG) emissions by 2020 and an 80% cut by 2050, is another consideration supporting local sustainable renewable energy solutions. The Obama administration is also pressing at the federal level to increase energy generation from renewable energy sources and to promote clean energy initiatives Progress to Plan, Bioenergy Action Plan for California, prepared for the Bioenergy Interagency Working Group, April Progress to Plan, Bioenergy Action Plan for California, prepared for the Bioenergy Interagency Working Group, April 2010.

2 APPROACH In order to simultaneously address limited biosolids disposal options and the need for renewable energy, nineteen members of the San Francisco Bay Area Clean Water Agencies, commonly referred to as BACWA, joined together to pursue development of a regional or sub-regional biosolids-to-energy (B2E) facility that, as its name implies, converts biosolids to energy. The nineteen-member group is called the Bay Area Biosolids to Energy Coalition, (Coalition). Most of the participating agencies already capture methane gas through anaerobic at their respective wastewater treatment plants, but significant energy value still remains in the digested biosolids that are hauled to either a landfill or a land application site. Table 1 shows the agencies and the quantity and quality of biosolids they produce. Biosolids can be converted to energy using a number of heat and chemical processes to generate gases that can be used to fuel the facility or further refined to create a fuel commodity. Biosolids conversion technologies include pyrolysis, gasification, incineration, arc plasma, and steam reformation. The Coalition is not set on any one technology; instead, they are focused on identifying technologies that can meet performance measures aligned with its priorities: maximizing net energy; minimizing greenhouse gas emissions; and meeting or exceeding stringent air quality requirements. In developing a regional/sub-regional project(s), the Coalition is investigating all aspects of the issue, from residual waste disposal to air quality. An important element of the project approach is community engagement to build understanding of biosolids management challenges, options, and state of the art technologies that minimize environmental impacts previously associated with conversion technologies. In addition to meeting or exceeding air quality emissions requirements and providing net environmental benefit, the Coalition is committed to developing a project that will be a community asset. Fostering Collaboration Coalition agencies vary significantly in size, with plant average dry weather flows ranging from 1.5 million gallons per day to over 110 million gallons per day. The agencies also vary in structure and size, from small special districts to large cities. However, all Coalition members share the vision of planning for the future and using innovation to meet the challenges our industry faces. The Coalition Steering Committee meets monthly with advance agendas, meeting notes documenting status and discussion, and issue memos when needed. The Steering Committee is comprised of one representative from each agency; depending on agency size and structure, the representative is the General Manager, Public Works Director or their designee, a person who can speak for the agency. Most decisions are made on a consensus basis. For decisions requiring a vote, each steering committee member has one vote, regardless of agency size. In this way, smaller agencies engage, knowing that their ideas and votes count as much as those of the larger agencies. This has been important in fostering

3 Table 1 BAB2E Coalition Agency Biosolids Production Coalition Member San Francisco Public Utilities Commission City of Burlingame City of Richmond West County Wastewater Delta Diablo Sanitation Fairfield-Suisun Sewer Sausalito Marin City Sanitary Union Sanitary Vallejo Sanitation City of Livermore North San Mateo County Sanitation Central Marin Sanitation Agency Dublin San Ramon Services Ironhouse Sanitary South Bayside System Authority City of Millbrae Stabilization Method Dewatering Method OSP Belt filter press SEP Centrifuge Cake Concentration 17% 28.5% Belt filter press 22% 5,031 In transition Unknown 11,315 Sludge drying beds 80 to 90% 5,475 Centrifuge 26% 11,801 Screw press 19% 14,278 Screw press 24% 675 Centrifuge 26% 19,098 Lime treatment Belt filter press 31% (at ph 12) 11,623 Belt filter press 17.5% 8,247 Centrifuge 25% 5,450 Centrifuge 26.5% 5,827 Dedicated land disposal Unknown for facility Annual Biosolids Production [wet tons] 77,111 11,340 None Belt filter Press 15% 4,000 Centrifuge 23% 12,903 Belt filter Press 18% 1,380 City of San Jose Drying beds 80% 38,000 and sludge lagoons City of Santa Rosa Belt filter press 15% 27,244 City of Palo Alto None Belt filter press 28% 26,100

4 collaboration. To talk through and frame significant issues, members volunteer to serve on issue-specific subcommittees, which vet the issues and make recommendations to the full Steering Committee. State and Federal Advocacy Given the strong alignment of the Coalition s goals with state and federal initiatives, the Coalition is also pursuing state and federal partnerships and participating in legislation that could help or hinder efforts to realize the energy value in biosolids. To this end, the Coalition has retained a state and a federal lobbyist to build support and identify initiatives on which to focus. The Department of Energy at the federal level and the California Energy Commission have goals to promote renewable energy development. Funding solicitations for renewable energy often are focused in very narrow areas, for instance dairy waste. The Coalition has addressed this challenge by meeting with agency staff to inform them of the energy-wastewater nexus and opportunities to use biosolids as a renewable energy feedstock. The Coalition also discusses these issues with our elected state and federal representatives. The Coalition size is helpful in lobbying efforts. Collectively, Coalition members are represented by eleven members in the US House of Representatives, seventeen in the state assembly and eleven state senators. State programs that BAB2E may fit include new Electric Program Investment Charge (EPIC), funded by a utility ratepayer surcharge and administered by the California Energy Commission. Investment plan areas include applied research, technology demonstration and deployment, and market facilitation. The Alternative and Renewable Fuels and Vehicle Technology Program could provide funding related to a project that fosters alternative vehicle fuel, such as renewable diesel or hydrogen. In addition, California s quarterly Cap-and-Trade auctions are generating revenue to fund various greenhouse gas reduction efforts. The state is holding public workshops as part of the California Air Resources Board preparation of an investment plan for Cap-and-Trade revenues. Biosolids to Energy could potentially fit into these plans. Potential federal programs for funding biosolids to energy include Advanced Research Projects Agency- Energy (ARPA-E) and Energy Efficiency and Renewable Energy (EERE). Request for Qualifications Process A request for Qualifications (RFQ) was issued in 2010 and the Coalition selected three teams to participate in a subsequent Request for Proposals (RFP) to develop a biosolids to energy facility. These teams include Synagro WWT, Intellergy, and Maxwest, with technologies that co-fire dried biosolids at a biomass facility, create hydrogen fuel through steam reformation, and create syngas that can be used by the facility through gasification, respectively. Since the release of the 2010 RFQ, technology advancements appeared to have led to the significant development of newer biosolids to energy technologies. The Coalition elected to issue a subsequent RFQ in April 2012 to allow consideration of the progression of biosolids technologies and the new competitors in the field. This RFQ contained updated

5 criteria that required proposed biosolids to energy systems to generate net usable energy, which includes syngas, hydrogen, biofuels, electricity, etc. Teams prequalified under the 2010 RFQ maintained their status for the 2012 RFQ, and they were allowed to refresh their submissions with any new developments. Based on the RFQ process, the Coalition has now updated the prequalified Proposers for the subsequent issuance of one or more RFPs that will be aimed toward awarding one or more contracts for design-build-own-operate facility(ies). Given the geographical distribution of Coalition agencies, our desire to minimize hauling and the total amount of biosolids produced, multiple smaller sub-regional facilities are preferred to best meet the Coalition s needs. Contract terms under consideration may range from ten to twenty years. Through the RFQ process and related work, the Coalition has identified new processes that have promising features: ability to process high moisture feed stocks; elimination or reduction of drying required prior to conversion process; and the potential to produce different valuable forms of energy: For instance, electricity-generating power stations or coal-burning cement kilns can supplement or replace a portion of their feedstock with dried biosolids. Although not new to the industry, waste heat can be efficiently recycled some proposed systems to generate electricity. Perhaps the most versatile form of energy, syngas can be used to fuel cogeneration units to produce electricity, purified to create hydrogen that can be used in fuel cell electric vehicles, or converted into diesel fuel, jet fuel, or fuel additives. Fostering Technology Development Some technologies have been pilot-tested at a small scale and some are operating at fullscale, but, all are ready for commercial-scale demonstration. However, commercial demonstration is quite capital intensive; some have called this stage of technology development the valley of death due to the challenges, primarily funding. We are told that, in order to secure financing, vendors must at least have a commitment that, if successfully demonstrated, a longer term commitment will follow providing a pathway for financing initial capital costs. Technology development companies often must also augment their structure to address the planning, regulatory work, design, construction, marketing, economics, financing and operational elements that come into play at the commercial scale. It is this stage of technology development where state and federal funding and other (private) partnerships are needed to help bridge the funding gap and foster strong competition. Once new technologies are successfully demonstrated, there is high interest among wastewater treatment agencies, particularly in urban areas, for permanent installations. Outside the RFQ/RFP process, the Coalition has been approached by vendors interested in demonstrating newer technologies. Some of these technologies seem to hold the

6 greatest promise for efficient conversion to valuable fuels with minimal by-products and small-scale deployment. To the extent the technology may qualify for grant funding and vendors can bring their own resources to bear, the Coalition and it s members are exploring the potential to participate in these demonstrations. Specific projects that are underway include: A CEC funded gasification and dry demonstration project that is under construction and will utilize biosolids and green waste, An entrepreneur funded biological drying process demonstration project that purports to biologically produce over 60 percent solids from dewatered anaerobically digested biosolids which is breaking ground, An entrepreneur funded pyrolysis process that has been piloted and produces certified clean biogenic diesel is in the planning stages, A CEC funded demonstration project which uses a new efficient drying process and a chemical process to produce hydrogen. NEXT STEPS The Coalition is working on a solicitation for the shortlisted teams from both RFQs to submit project proposals. The solicitation will address barriers that have been identified through the Coalition s work to date. The primary inhibitor to be addressed is that of a predictable revenue stream for capital-intensive commercial demonstration. The approach calls for demonstration of the selected technology using modular units of the size that would be produced for commercial operation, so that the equipment can be deployed commercially once successfully demonstrated. In this way, the efficacy of the process can be tested and demonstrated at actual commercial scale and then used commercially to generate revenue. To further address the revenue issue, the Coalition will agree to a specified volume of biosolids to commit to the facility at a specified tip fee under a longer-term (i.e years) contract upon successful completion of demonstration. This approach will lead more quickly to commercial deployment than the traditional approach of separating the procurement processes for first demonstrating and then deploying technologies. To protect the Coalition agencies, the contract will also provide terms for exiting the contract if the specified performance measures are not met during the demonstration period. Performance measures will include BAB2E goals of net energy and GHG reduction among others.

7 The Coalition will release the RFP in The solicitation will include a minimum and maximum scale, likely in the range of wet tons per day. It is expected that the actual capacity proposed by vendors will be a function of the sizing availability of the particular process equipment to be utilized and the company s business plan. The solicitation will call for proposals to include performance measures to be achieved during the demonstration period, specifically: Net energy recovery within a specified demonstration time period. Compliance with all permit conditions and any CEQA and/or NEPA mitigation measures, including materials handling. Reuse (or disposal as a last resort) of all byproducts from the operation (both solid and liquid streams). Specified odor requirements met. Reduction of GHG from present agency practices. The project will be phased to allow the proposer to develop, construct, and operate the facility. The phases will include: A development period to complete all pre-construction activities, such as securing the facility site, permits, regulatory approvals, design, and obtaining financing. A construction phase to build the B2E facility. A start-up period to demonstrate the biosolids processing and energy generation capabilities of the proposed system. A full-scale operation period during which the B2E system must operate reliably at 100 percent capacity. FUNDING The state and federal government have an interest and role in addressing renewable energy development and GHG reduction by assisting with funding projects like the Coalition s B2E project. These funds could lessen the gap required to develop newer B2E technologies to the municipal market. Once commercially demonstrated and proven, these technologies have high value and can be replicated on a broad scale by wastewater treatment plants, making a significant impact in achieving the state s goal for development of energy derived from renewable biomass. The project is consistent with the California Energy Commission s Public Interest Energy Research guiding policy goals. This policy directs the Energy Commission to develop, and help bring to market, energy technologies that provide increased environmental benefits, greater system reliability, and lower system costs. The policy further requires that proposed projects provide tangible benefits to electric utility customers through investments in advanced electricity technologies that reduce or eliminate consumption of water or other finite resources, increase use of renewable energy resources, or improve transmission or distribution of electricity generated from renewable energy resources.

8 The B2E project accomplishes this by demonstrating a technology that can efficiently utilize biosolids, a renewable resource already produced continuously by wastewater treatment plants throughout the state, to produce electricity for meeting local demand and relieve the grid by providing distributed generation at wastewater treatment plants. The Coalition has secured $1 million from the Energy Commission for the demonstration project. Additional state and federal funding is being pursued for the project. SUMMARY This podium presentation will demonstrate a multi-agency, multi-faceted, and technological approach for biosolids handling on a regional/sub-regional level. It will present the findings of the technology confirmation screening and demonstrate the Coalition s efforts towards demonstrating a new B2E technology and funding. In summary, this project is an exemplary collaboration that brings a regional solution to biosolids management in the San Francisco Bay Area, using a unique approach to address disposal issues and harness a renewable energy from a pervasive resource.