Biopower and Waste Conversion Technologies for Santa Barbara County, California

Transcription

1 Biopower and Waste Conversion Technologies for Santa Barbara County, California Report for the Community Environmental Council Chapter 5: Biopower and Waste Conversion Technologies Prepared by: University of California, Berkeley affiliates: Mikhail Chester, PhD Student Department of Civil and Environmental Engineering Richard Plevin, PhD Student Energy and Resources Group Deepak Rajagopal, PhD Candidate Energy and Resources Group Daniel Kammen, Professor Energy and Resources Group Goldman School of Public Policy Nuclear Engineering Top: Santa Barbara Coastline [2] Below: Tajiguas Landfill [3] Final Report February 2007

2 Table of Contents 1) Assessment of Biopower and Conversion Technologies Power Potential a) Overview of Biopower and Conversion Technologies (CT) Industries today b) Review of Existing Biomass Energy Technologies c) Technical Potential of Biopower and CT Facilities in Santa Barbara County d) Economic Potential of Biopower and CT Facilities in Santa Barbara County e) Environmental Impacts of Biopower and CT Facilites f) Siting Biopower and CT Facilities g) Transmission Constraints ) Action Plan a) Environmentally Sensitive Siting b) Case Studies of Biopower and CT Facilities c) State and Federal Legislation d) Policy Mechanisms for Promoting CT e) Recommendations for Strategies to Optimize Biopower and CT Installations f) Summary of Recommendations References Biopower and CT for Santa Barbara County Draft Report Page 2 of 62

3 List of Tables Table 1. MSW Generation, Disposal, and Recycling (in tons) [15] Table 2. Paper and Organic Feedstock from Landfill and Recycling [15] Table 3. Feedstock for Santa Barbara County from Forest Sources [17] Table 4. Feedstock for Santa Barbara County from Agricultural Sources [17] Table 5. Feedstock for Santa Barbara County from Other Sources [17] Table 6. Technology Electricity Practical Yield Ranges [18] Table 7. Total Santa Barbara County Yearly Electricity Potential from Biomass Table 8. Total Santa Barbara County Yearly Electricity Potential from Biomass Table 9. Fraction of Santa Barbara County yearly electricity demand that could be met from biomass Table 10. Adopted 2005 Market Price Referents [19] Table 11. Costs of Alternative Solid Waste Processing Technologies Table 12. Calculation of Break Even Tipping Fee for a Sample CT Facility Table 13. Calculation of Break Even Electricity Price for a Sample CT Facility Table 14. Calculation of Break Even Electricity cost for a Sample CT Facility Table 15. Low, most likely, and high values used for cost simulations Table 16. Sensitivity of Break-even Electricity Price for a Waste Conversion to O&M and Capital Costs. 29 Table 17. Sensitivity of Break-even Electricity Price for Biopower Facility to O&M and Fuel Cost Table 18. Typical Costs and Capacity of New Transmission Lines [59] List of Figures Figure 1. Materials flow diagram for a mixed MSW processing facility. Percentage figures indicate flow of initial input Figure 2 Possible Biopower and CT Siting Locations for Santa Barbara County (Source: Google Maps) Figure 3 Dioxin/Furan Emissions from three MSW conversion systems. The IES system depicted is the Romoland facility detailed above [25] Figure 4. Commercially active gasification in Japan in cumulative tons/day. This figure represents capacity using MSW that was commercially active as of Currently inactive facilities that were in use during this period are not graphed. [7] Figure 5 Excerpt from LA DPW s Request for Proposals for a CT public education campaign Biopower and CT for Santa Barbara County Draft Report Page 3 of 62

4 1) Assessment of Biopower and Conversion Technologies Power Potential 1.a) Overview of Biopower and Conversion Technologies (CT) Industries today In California today the three primary sources of biomass energy are agricultural wastes, forestry wastes, and municipal wastes. Each of these resources must be converted to extract usable energy, and there is considerable overlap in the conversion technologies employed. However, in the state of California, municipal waste-to-energy (WTE) systems fall under the jurisdiction of the CA Waste Management Board, whereas biopower facilities that produce electricity from biomass other than municipal solid waste (MSW) are considered power producers rather than waste management systems. Thus, it is helpful to distinguish between these conversion pathways. In this report, the term biopower refers to the utilization of agricultural and forestry wastes for the production of electricity, while waste-to-energy (WTE) refers to the conversion of municipal solid waste (MSW) to electricity, specifically using conversion technologies (CT) other than combustion. This report reviews biopower and CT as they relate to electricity production. A separate report commissioned by the Community Environmental Council from Navigant Consulting, Inc., examines biological feedstocks (such as corn and soy) for use as a vehicle fuel to reduce petroleum demand. Industrial scale use of biomass for power generation emerged as a result of the federal Public Utility Regulatory Policy Act of 1978 (PURPA), enacted in response to the energy crises of the 1970s. Today, biomass accounts for about 1,700 MW of electricity nation-wide [4]. At its peak in 1994, the California biopower industry comprised about 30 plants and generated around 800 MW of power, then a little over 2 percent of California s electricity consumption [4]. The biomass industry, which initially utilized mostly sawmill wastes has since evolved to provide disposal options for a variety of other solid wastes like forest thinnings, agricultural byproducts, orchard removals, and urban wood waste. By converting these wastes into electricity, the biomass industry helps avoid open burning of tons of wastes, conserves landfill space and reduces the risk of wildfire in the forests. The biomass industry annually consumes 7 million tons of organic waste equivalent to 25 percent of all the waste (by tonnage) deposited in California landfills each year. Total employment in the California biopower industry is estimated at approximately 3,600 direct jobs, plus other indirect employment, with wages paid in California totaling approximately $200,000,000 per year [4]. Biomass plants are often the largest capital investment and largest taxpayer in many rural communities, providing substantial employment and tax revenues in areas hit hard by mill closures. The California Biopower and CT for Santa Barbara County Draft Report Page 4 of 62

5 biopower industry has helped create over 200 new businesses, including fuel collectors, processors, and transporters [4]. Although the technology is reliable and has proven itself for many years, biomass power plants are generally not competitive with fossil fuel power plants in California, though fossil fuel price increases in recent years are changing cost comparisons quickly. Biomass power is competitive with nuclear power, which, as a baseload power source, is the better comparison [5]. Moreover, comparisons of the cost of various power generation technologies on a life-cycle basis (including estimates for external costs like greenhouse gases, air pollution, etc.) have clearly shown technologies utilizing renewable sources like biomass and wind to be cheaper than fossil fuel sources [5]. Biomass electricity is about the same cost as geothermal (another baseload power source), cheaper than solar photovoltaics, but more expensive than wind power (an intermittent energy source). [5] 1.a.i) Environmental Impacts of Biomass Conversion The environmental impacts of energy produced from waste biomass differ from those from dedicated energy crops. This is because production of dedicated energy crops can result in changes in crop types, cropping patterns, pest management, cultivation techniques, fertilization, irrigation, harvesting, and processing and conversion. Hence, net effects compared to prior agricultural or other land use would need to be assessed in addition to the overall system level effects due, for example, to fossil fuel displacement. However, emissions from harvesting and use of biomass have been found to be well below emission levels from open burning for most pollutants, NOx and SOx being the principal exceptions although most emissions controls systems have been able to reduce these pollutants as well [6]. Incorporating energy conversion such as biogas power generation systems into animal operations will generally reduce odors, particulate matter, and VOC emissions but may increase NOx emissions due to the use of combustion engines, turbines, and boilers. Land application of digester residues may also lead to increased ammonia emissions compared with spreading of manure, but has offsetting benefits from greater nutrient availability and odor reduction. While most of the abovementioned impacts concern air quality, there are several other important environmental impacts like soil nutrient loss, changes in water quality, wildlife disturbance etc. that need to be considered. Nutrient cycling is impacted by the amount and type of agricultural or forestry residue removed from the land. Excess removal results in depletion of soil health necessitating greater use of chemical inputs during the next planting season. At the same time, removing the excess residues would provide a greater quantity of light and moisture for standing biomass in forests. The single largest impact on water quality from forest harvesting comes from new roads. Fugitive dust and direct emissions from the harvesting and transport equipment need to be considered for air quality impacts. Positive benefits to air quality will come through reduced smoke from open burning of residues and fewer forest fires. There Biopower and CT for Santa Barbara County Draft Report Page 5 of 62

6 is little conclusive research on the question of wildlife disturbance and biomass harvesting. Siting of biomass conversion facilities would require compliance with local air quality permits. Last, biopower facilities reduce greenhouse gas emissions when they substitute for fossil fuel-based power generation. Biomass combustion is considered carbon neutral because the carbon released during combustion was taken from atmospheric carbon dioxide during photosynthesis. On a life cycle basis, however, biopower systems are generally not carbon neutral as they use fossil fuels for their operations (such as transportation). That said, biopower systems generally have net carbon dioxide emissions much below those of fossil fuel sources of power. And, as our economy relies less on fossil fuels more generally, the carbon impacts of biopower systems will become progressively more positive. 1.a.ii) CT Industry The CT industry is similar to the biopower industry in that it is also concerned with the conversion of organic matter into energy or other useful chemical products. Technologically, both industries employ a range of technologies (e.g. combustion, gasification and digestion) for conversion of organic matter. However, there are several important differences too: whereas the biopower industry emerged in response to both the energy crisis and to air pollution caused by the open burning of agricultural and forestry residues, the CT industry has emerged as an alternative to landfilling as well as a response to higher energy prices and the search for viable alternatives to fossil fuels. Although CTs are widely deployed in Japan and Europe, there are presently no fully commercial operating conversion technology facilities in California. One major reason for this has been opposition by public interest groups concerned about the health impacts of emissions from MSW conversion processes and the impact of such facilities on efforts to increase recycling. 1.a.iii) Environmental Impacts of CT Although it is difficult to fully quantify the human health impacts of CT, we are able to reasonably estimate the actual emissions arising from a given CT facility and compare them with those from alternative disposal options. Emissions from thermochemical conversion of MSW include air pollutants such as oxides of nitrogen and sulfur (NO x and SO x ), hydrocarbons, carbon monoxide (CO), particulate matter (PM), volatile heavy metals, greenhouse gases such as CO 2 and CH 4 and toxic compounds like dioxins/furans [23]. In addition, fugitive gas and dust emission levels vary with control strategies, operational practices, and level of maintenance at a particular facility [23]. Dioxins and furans are of particular concern in terms of potential environmental consequences. These compounds are formed under high temperatures when chlorine and complex mixtures containing carbon are present, and they can be found in both gaseous and liquid form. However, existing data from facilities in Japan and Europe indicate that thermochemical conversion technologies can operate within constraints Biopower and CT for Santa Barbara County Draft Report Page 6 of 62

7 established by their local regulatory agencies [23]. Conversion technologies will also produce a solid residue because all components of the solid waste stream contain inorganic material or ash and are not converted into a gas or liquid. Higher-volatility heavy metals, such as mercury, will enter the gas phase in thermal conversion and must be managed or captured before release as exhaust to the atmosphere. Conversion technologies do not generate heavy metals in ash but do concentrate heavy metals already present in the feedstock that would otherwise be landfilled [23]. With proper management, the concentrated heavy metals can be treated and disposed of in a controlled manner that poses no greater environmental threat than landfilling [23]. Conversion technologies will also generate liquid residues that must be managed appropriately. Liquid residues like sludge are produced in larger quantities as a result of conversion through anaerobic digestion [23]. Despite the lack of clear regulatory policies in California for CT facilities, many believe that due to heterogeneity in type and composition of feedstock, the wide range of process parameters, and degree of air pollution control, conversion technologies will generally need to be regulated on a case-by-case basis. Existing agencies in Santa Barbara County, such as the Santa Barbara Air Pollution Control District, have such authority over any facilities that may be sited in the county. 1.b) Review of Existing Biomass Energy Technologies This section provides a summary of some of the major technologies for conversion of MSW and agricultural and forestry residues (sometimes referred to as biomass) into electricity. Note that given the heterogeneous nature of the feedstock, the efficiency, performance and suitability of any given technology is likely to vary among installations. Conversion of organic matter into heat and electricity can be achieved using thermal conversion, thermochemical conversion, and biochemical conversion, each of which is discussed below. 1.b.i) Thermal Conversion Thermal conversion otherwise known as burning -- involves direct combustion of organic matter in an oxygen-rich environment, generating heat that can be used for electricity production. Incineration or Direct Combustion: Incineration is essentially direct combustion of organic matter in an oxygen rich environment with or without the accompanying extraction of useful heat. In some cases, the goal of incineration might simply be reduction in the volume of waste without energy recovery as in the case of medical waste disposal. Typical flame temperatures for combustion and incineration range between 1,500 F and 3,000 F. In the context of this report, incineration implies the accompanying extraction of useful heat for producing steam and electricity. Biopower and CT for Santa Barbara County Draft Report Page 7 of 62

8 1.b.ii) Thermochemical Conversion In contrast to direct combustion, thermochemical conversion utilizes heat and pressure in an oxygen deficient environment in order to produce synthesis gas, which is composed of lower molecular weight species such as methane, carbon monoxide, hydrogen and other lighter hydrocarbons, and is cleaner to combust than raw MSW. Thermochemical technologies have the added benefit of higher conversion rates when compared to other conversion pathways. Thermochemical conversion pathways include processes such as pyrolysis, gasification, plasma arc, and catalytic cracking. We provide a brief definition of the various processes below. A more detailed discussion can be found in the California Integrated Waste Management Board s report to the legislature on these technologies [7]. Pyrolysis: Pyrolysis involves thermal decomposition of feedstock at high temperatures (greater than 400 F) in the absence of air. The end product of pyrolysis is a mixture of solids (char), liquids (oxygenated oils), and gases (methane, carbon monoxide, and carbon dioxide) with proportions determined by operating temperature, pressure, oxygen content, and other conditions. Pyrolysis produces pyrolytic oils that can be used directly as boiler fuel or refined for higher quality uses such as engine fuels, chemicals, adhesives, and other products. Gases produced during the pyrolysis reaction can be utilized in a separate reaction chamber to produce thermal energy, which can be used to produce steam for electricity production. Solid residues from pyrolysis contain most of the inorganic portion of the feedstock as well as large amounts of solid carbon or char. Gasification: Gasification is the conversion of feedstock materials by either direct or indirect heating to fuel gases (methane and lighter hydrocarbons) and synthetic gases (carbon monoxide, hydrogen). While gasification processes vary considerably, typical gasifiers operate from 1,300 F and higher and from atmospheric pressure up to five atmospheres or higher. The product fuel gases are cleaned to remove unwanted particles and are then combusted in internal and external combustion engines, used in fuel cells, or processed further into methanol, ethanol, and other chemicals. An important aspect of gasification is that the chemical reactions can be controlled for the production of different products. Plasma Arc: Plasma arc technology is a heating method that can be used in both pyrolysis and gasification systems. Plasma arc technology uses very high temperatures generated using electricity to break down the feedstock into simpler by-products such as carbon monoxide (CO), hydrogen (H 2 ), and carbon dioxide (CO 2 ). The inorganic material is vitrified to form a glassy residue. Plasma arc systems are best viewed as a waste disposal option since a large fraction of the electricity generated by these systems is consumed to operate the plasma torches, significantly limiting the net electrical output of the facility. Biopower and CT for Santa Barbara County Draft Report Page 8 of 62

9 Catalytic Cracking: Catalytic cracking is a thermochemical conversion process that uses catalysts to accelerate the breakdown of polymers such as plastics into more basic units called monomers. The monomers can then be processed using typical cracking methods used in oil refineries to produce fuels such as low-sulfur diesel and gasoline. Catalytic cracking is more suited to produce liquid fuels rather than electricity. 1.b.iii) Biochemical Conversion Unlike thermal and thermochemical processes, biochemical conversion processes occur at lower temperatures and have lower reaction rates. Higher moisture feedstocks are more easily converted through biochemical processes. Non-biodegradable feedstocks, such as plastics and metals, are not suitable feedstocks for biochemical conversion. Anaerobic digestion and fermentation are two important types of biochemical conversion processes. We describe them briefly here. Anaerobic digestion: Anaerobic digestion involves the bacterial breakdown of biodegradable organic material in the absence of oxygen over a temperature range from about 50 to 160 F. The process of anaerobic digestion typically consists of three steps: 1. Decomposition of plant or animal matter by bacteria into molecules such as sugar (hydrolysis). 2. Conversion of decomposed matter to organic acids (acetogenesis). 3. Conversion of organic acid to methane gas (methanogenesis). The main end product of these processes is called biogas, which is mainly methane (CH 4 ) and carbon dioxide (CO 2 ) with some impurities such as hydrogen sulfide (H 2 S). These gases are in fact naturally released by sewage sludge, livestock manure, and other wet organic materials. Biogas can be used as fuel for engines, gas turbines, fuel cells, boilers, and industrial heaters, and as a feedstock for chemical manufacture (with emissions and impacts commensurate with those from natural gas feedstocks). Fermentation: While anaerobic digestion is essentially a form of fermentation, fermentation usually refers to the processing of organic matter into alcohols. While future demand for ethanol from cellulosic sources is likely to make fermentation more attractive, it is relatively less significant for electricity production. (Ethanol production and other topics relating to vehicular energy use is discussed in a separate report by Navigant Consulting, Inc., commissioned by the Community Environmental Council.) Biopower and CT for Santa Barbara County Draft Report Page 9 of 62

10 1.b.iv) Technological and Commercial Maturity of Conversion Technologies The various technologies described above are at different levels of technical and commercial maturity today. Direct combustion, often termed incineration, is the simplest and most mature technology for waste disposal. Incineration has been used widely all over the world for disposing of MSW in densely populated areas with scarce landfill space. However, incineration also faces the strongest public resistance owing to the high levels of emissions especially of dioxins associated with the prior generation of solid waste combustion facilities. The technology has improved markedly in the past 15 years: several technical reports including those by the CIWMB note that state-of-the-art incineration facilities emit extremely low levels of criteria [8] and hazardous pollutants [6,29]. In any case, it is widely believed that barriers to incineration in California are unlikely to be overcome in the near future. Pyrolysis and gasification are not new technologies, having been used for coal and other materials since the early 20th century. Although they have been commercially used for electricity production in places like Japan and Europe they are commercially unproven in the US at least for MSW; gasification of wood waste and biomass has been deployed commercially in North America. Similarly, a large number of anaerobic digestion facilities are operating in Europe and Canada that use unsorted MSW as a feedstock [7]. Fermentation processes for the production of ethanol from MSW have not matured to the same extent as anaerobic digestion but in any case they are more relevant for ethanol production a topic discussed in a different report rather than electricity production. 1.b.v) The Future: Bio-energy Action Plan for California California Executive Order S established targets to increase the in-state production and use of bioenergy, including ethanol and biodiesel fuels made from renewable resources. For biofuels, the specific targets are to produce in-state a minimum of 20 percent of biofuels used in California by 2010, 40 percent by 2020, and 75 percent by Accordingly, these goals do not specify any absolute amount of biofuel production. Rather, they specify that a portion of whatever amount will be used at the specified times must come from in-state production. Regarding the use of biomass for electricity, state law requires all utilities to provide 20 percent renewable electricity by 2010, which will include biomass. The state s energy agencies and the Governor have supported advancing this goal to 33 percent by 2020 (though this is not yet codified in law). Biopower and CT for Santa Barbara County Draft Report Page 10 of 62

11 1.c) Technical Potential of Biopower and CT Facilities in Santa Barbara County The following subsections describe the feedstock for the County as well as the technical electricity potential using certain conversion technologies. Technical potential refers to the amount of electricity that could be produced with feedstocks in the County, adjusted downward from gross potential to take into account various technical limitations. 1.c.i) Municipal Solid Waste Santa Barbara County s municipal solid waste (MSW) falls into two categories: waste disposed and waste recycled. Each of these categories represents a potential feedstock for a biomass-to-electricity conversion facility. Santa Barbara County generates 240,000 tons of waste that is sent to landfills (the city of Santa Barbara contributes 105,000 tons yearly) [9]. This number is based on an estimated diversion rate that does not necessarily reflect the actual percentage of material recycled. Most municipalities within Santa Barbara have diversion rates greater than 50%, while many others have rates greater than 60% [10]. For each jurisdiction within Santa Barbara County, we determined the population from the 2000 census as well as the total waste landfilled based on CIWMB profiles and population weighted generation [11, 12]. Using the county waste profile, the residential and commercial portions of total waste could be determined as well as the material makeup of that waste (papers, glass, metals, plastics, etc.) [13]. The total waste landfilled does not represent the entire MSW feedstock as the potential to use materials from current recycling markets also exists although it is politically and environmentally undesirable. The main issue is that official figures for diversion rates typically over-estimate the amount of material sent to recycling, so the recycling rate itself (as a subset of the diversion rate) should be determined for each jurisdiction. To determine an appropriate recycling rate, we used statewide data presented in Biocycle s annual report, State of Garbage in America [14]. In this study, an official diversion rate in California of 48% was examined, but the study found this resulted in only a 40% recycling rate. Assuming all diversion rates are similarly 20% higher than actual recycling rates, recycling rates for each jurisdiction within the county were calculated based on the reported diversion rates. Lastly, given total waste landfilled and a given recycling rate, the total waste recycled was determined. Table 1 below summarizes these findings. Biopower and CT for Santa Barbara County Draft Report Page 11 of 62

12 MSW Generation, Disposal, and Recycling City Name Total Waste Landfilled (tons/yr) Estimated Diversion Rate Estimated Recycling Rate Total MSW Generated (tons/yr) Total MSW Recycled - Organics & Others (tons/yr) Buellton 1,925 61% 50% 3,816 1,891 Carpinteria 7,137 61% 50% 14,150 7,012 Goleta 27,759 56% 46% 59,924 32,165 Guadalupe 2,846 47% 39% 7,274 4,429 Lompoc 20,668 65% 55% 37,882 17,214 Santa Barbara 105,000 63% 53% 200,000 95,000 Santa Maria 38,931 62% 51% 75,638 36,707 Solvang 2,681 62% 51% 5,209 2,528 Los Alamos % 46% 1, Mission Canyon CDP 1,312 56% 46% 2,833 1,521 Mission Hills CDP 1,580 56% 46% 3,411 1,831 Montecito 5,028 56% 46% 10,855 5,827 Orcutt 14,497 56% 46% 31,295 16,798 Santa Ynez 2,305 56% 46% 4,976 2,671 Summerland CDP % 46% 1, Toro Canyon % 43% 1,974 1,120 Vandenberg AFB CDP 3,093 56% 46% 6,677 3,584 Vandenberg Village CDP 2,917 56% 46% 6,298 3,381 Total 240, , ,377 Table 1. MSW Generation, Disposal, and Recycling (in tons) [15] With total waste generated by jurisdiction and a characterization profile of the waste stream, we estimated the amount of paper and organics in the landfill and recyclables streams. We determined the fraction of paper destined for landfills using the residential and commercial waste landfilled. Paper was determined to be waste categorized as cardboard, paper bags, newspaper, white or color ledger, computer and office paper, magazines and catalogs, phone books and directories, as well as other miscellaneous or composite paper. Assuming recycling rates previously discussed, we then determine the amount of paper set out for curbside collection in a recycling end-market. The amount of paper landfilled and recycled by jurisdiction in Santa Barbara county is shown in Table 2. We employed a similar methodology to determine MSW organics, which we identified as food, leaves and grass, prunings and trimmings, branches and stumps, textiles, and composite organics. The resulting MSW organic feedstock is shown in Table 2. All feedstocks have some moisture content which has been removed so only dry tons of plant matter are considered. Biopower and CT for Santa Barbara County Draft Report Page 12 of 62

13 Paper and Organic Feedstock from Landfill and Recycling City Name MSW Paper Landfilled (Dry Tons/Yr) MSW Organics Landfilled (Dry Tons/Yr) MSW Paper Recycled (Dry Tons/Yr) MSW Organics Recycled (Dry Tons/Yr) Buellton Carpinteria 2,012 1,395 1,977 1,370 Goleta 7,827 5,424 9,069 6,285 Guadalupe , Lompoc 5,828 4,039 4,854 3,364 Santa Barbara 29,607 20,517 26,787 18,563 Santa Maria 10,977 7,607 10,350 7,173 Solvang Los Alamos Mission Canyon CDP Mission Hills CDP Montecito 1, ,643 1,139 Orcutt 4,088 2,833 4,736 3,282 Santa Ynez Summerland CDP Toro Canyon Vandenberg AFB CDP , Vandenberg Village CDP Total 67,673 46,897 66,369 45,993 Table 2. Paper and Organic Feedstock from Landfill and Recycling [15] The gap between potential feedstock and available feedstock can be bridged by investment in additional sorting technologies. Currently, MSW is generally sent to a landfill in trash bags containing commingled desirables (e.g., paper and organics which can later be used to produce electricity) and undesirables. Instead of collecting commingled trash in garbage trucks for burial in a landfill, it could be sorted at a Material Recovery Facility (MRF) where the desirable feedstock is separated from the undesirable. 1.c.ii) Forest Residues In addition to MSW, several other potential feedstocks exist for biomass conversion including forest residues. Several sources of forest matter can be sustainably collected and used as a biomass feedstock, including logging slash, biomass from forest thinning operations, mill residues, and shrub and chaparral [16]. The California Biomass Collaborative s 2005 California biomass database is publicly available and provides detailed information about Santa Barbara county (not just for forest residues but agricultural residues and other feedstocks which will be discussed further in the following sections) [17]. Biopower and CT for Santa Barbara County Draft Report Page 13 of 62

14 A summary of the total biomass potential from forest residues is summarized in Table 3. The table shows both the total bone dry tons (BDT) and useable BDT for the county. The total BDT reflects how much material could be harvested on a yearly basis unsustainably. The useable BDT reflects how much material could be sustainably collected with considerations for soil fertility, erosion control, terrain limitations, ecosystem requirements, collection inefficiencies, as well as other constraints. Feedstock from Forest Sources Item BDT (BDT/yr) Percent Useable Useable BDT (BDT/yr) Forest Thinnings 6,033 34% 2,068 Forest Slash 83,707 47% 39,191 Shrub 129,904 29% 37,555 Mill Residue 12,821 32% 4,046 Total 232,466 82,860 Table 3. Feedstock for Santa Barbara County from Forest Sources [17] 1.c.iii) Agricultural Residues Similar to forest residues, agricultural residue feedstocks for the County were taken from the CBC biomass database. The agricultural feedstock includes three main categories: field and seed, orchard and vine, and vegetable. For each category, we determined the biomass availability in the County as shown in Table 4. Feedstock from Agricultural Sources Item BDT (BDT/yr) Percent Useable Useable BDT (BDT/yr) Field and Seed 7,055 40% 2,797 Orchard and Vine 32,942 70% 23,060 Vegetable 71,527 5% 3,576 Total 111,524 29,433 Table 4. Feedstock for Santa Barbara County from Agricultural Sources [17] Similar to the forest feedstocks, special considerations must be made to distinguish useable material from total material: excessive removal of agricultural practices decreases soil quality and increases soil erosion and the need for nutrient replacement through fertilization. The useable BDT presented in Table 4 accounts for these factors. Biopower and CT for Santa Barbara County Draft Report Page 14 of 62

15 From Table 3 and Table 4, we show that the total useable forest BDT is almost three times as large as the useable agricultural BDT. Although this suggests that the bulk of biomass used for electricity conversion technologies in the County should come from forest residues, the number itself does not address logistics or economics. The infrastructure for gathering and delivering agricultural residues to a conversion facility is much more developed than the infrastructure for forest residues. Mechanisms already exist in the agricultural industry for locating, collecting, processing, and distributing agricultural material from farms to processing facilities. This is not true for forest residues. In considering the feasibility of establishing collection of these materials, it is important to consider the infrastructure and mechanisms that may need to be developed to collect and distribute forest residues. 1.c.iv) Other Feedstocks There are several other feedstocks that can be considered as inputs to conversion technologies processes, including animal manure, food processing wastes, and biosolid gas (biogas) generation from landfills. Of these three sources, animal manure, mainly from cows, comprises the majority. Food processing waste is the second largest feedstock, of which 80% is useable. Lastly, methane gas from landfills, which is often converted to electricity onsite, could be diverted from the landfills and used by the city to exploit existing infrastructure. This may not be practical in the sense that many landfills have removed themselves from the grid by using these gases to power their facilities. Feedstock from Other Sources Item Total BDT Percent Useable Total Useable BDT Animal Manure 54,348 25% 13,437 Food Processing 7,312 80% 5,850 Landfill Gas 7,351 80% 5,881 Total 69,011 25,168 Table 5. Feedstock for Santa Barbara County from Other Sources [17] Table 5 summarizes these other sources. Although animal manure comprises a significant portion of the total BDT, only 25% is useable while food processing wastes and landfill gases are 80% useable. The total useable BDT of these three materials is almost as large as the total source of agricultural residues. 1.c.v) Electricity Potential The three most likely technologies for converting biomass or other feedstocks to electricity are incineration, gasification/pyrolysis, and anaerobic digestion; each offers a distinct range of electricity Biopower and CT for Santa Barbara County Draft Report Page 15 of 62

16 yields. A recent report by the city of Los Angeles evaluating alternatives to solid waste landfilling evaluates these three technologies through several case studies [18]. The report lists the actual electricity yield for each of the case studies given their biomass input. Using this data, we identified a practical expected range for each of the three technologies. Technology Electricity Practical Yield Ranges (kwh/ton) Facility Type Minimum Expected Maximum Incineration Gasification / Pyrolysis Anaerobic Digestion Table 6. Technology Electricity Practical Yield Ranges [18] Using this range of values for each technology, the electricity generation potential from biomass for the County was determined. This was based on the minimum and maximum practical yields (kwh per ton) for each of the technologies. Table 7 summarizes the results. Energy Potential Feedstock Total Santa Barbara County Yearly Electricity Potential from Biomass (Lower and Upper Potentials in MWh) Incineration Potential Gasification / Pyrolysis Potential Anaerobic Digestion Potential Lower Upper Lower Upper Lower Upper MSW Paper and Organic Recycled 60, ,647 68,068 85,085 14,399 35,343 MSW Paper and Organic Landfilled 61, ,781 69,405 86,756 14,682 36,037 Forest Residues 43,767 78,971 49,476 61,845 10,466 25,689 Agricultural Residues 14,541 26,237 16,438 20,547 3,477 8,535 Animal Manure 4,031 7,273 4,556 5, ,366 Food Processing 2,513 4,534 2,840 3, ,475 Landfill Gas 2,469 4,456 2,791 3, ,449 Total Potential (Excluding Recycled) 128, , , ,884 30,780 75,552 Table 7. Total Santa Barbara County Yearly Electricity Potential from Biomass We expect the actual yield to be close to the middle of the ranges in Table 7 as shown in Table 8. Biopower and CT for Santa Barbara County Draft Report Page 16 of 62

17 Total Santa Barbara County Yearly Electricity Potential from Biomass (Expected Potentials in MWh) Energy Potential Feedstock Incineration Potential (Expected) Gasification / Pyrolysis Potential (Expected) Anaerobic Digestion Potential (Expected) MSW Paper and Organic Recycled 87,048 75,049 21,926 MSW Paper and Organic Landfilled 88,758 76,523 22,356 Forest Residues 63,272 54,551 15,937 Agricultural Residues 21,021 18,124 5,295 Animal Manure 5,827 5,024 1,468 Food Processing 3,632 3, Landfill Gas 3,570 3, Total Potential (Excluding Recycled) 186, ,431 46,870 Table 8. Total Santa Barbara County Yearly Electricity Potential from Biomass The generation potential for the County presented in Table 8 is more easily evaluated from the viewpoint of the fraction of demand met. This is shown in Table 9 and is based on the current 2,500 GWh per year demand. Fraction of Santa Barbara County Yearly Electricity Demand Met from Biomass (Expected Potentials as % of 2500 GWh Demand) Energy Potential Feedstock Incineration Potential (Expected) Gasification / Pyrolysis Potential (Expected) Anaerobic Digestion Potential (Expected) MSW Paper and Organic Recycled 3.4% 3.0% 0.9% MSW Paper and Organic Landfilled 3.5% 3.0% 0.9% Forest Residues 2.5% 2.2% 0.6% Agricultural Residues 0.8% 0.7% 0.2% Animal Manure 0.2% 0.2% 0.1% Food Processing 0.1% 0.1% 0.0% Landfill Gas 0.1% 0.1% 0.0% Total Potential (Excluding Recycled) 7.4% 6.4% 1.9% Table 9. Fraction of Santa Barbara County yearly electricity demand that could be met from biomass Electricity produced from the available waste streams, using the three technologies identified can meet between 1.9% and 7.4% of the county s current electricity demand. Table 9 shows that MSW paper and organics currently landfilled provide the largest fraction of the potential electricity generation for the Biopower and CT for Santa Barbara County Draft Report Page 17 of 62

18 County, followed by forest residues and agricultural residues. The feasibility of forest and agricultural feedstocks has been previously discussed but should be re-familiarized when considering Table 9. The feasibility of producing electricity from the paper and organics MSW stream should also be considered carefully. Although this represents material which is currently of no value and is deposited in landfills, additional costs will be incurred for its collection. The reason for this is that additional sorting technologies will be needed to remove this material from the commingled waste stream. Commingled trash (collected from houses, commerce, and industry) will have to be sent to a Materials Recovery Facility (MRF) instead of directly to a landfill, and separated to collect the desired materials. This will involve capital expenditures as well as operational costs. Operational costs will include modified vehicle routing patterns as well as sorting costs. Sorting of commingled wasted is a process that involves many stages. Desirables must be removed from everything else through use of sorting technology or often just manual labor. This process is illustrated in Figure 1. Figure 1. Materials flow diagram for a mixed MSW processing facility. Percentage figures indicate flow of initial input. Figure 1 illustrates the processing involved in a mixed MSW facility for removal of organics from a commingled stream. The 58% organic fraction was determined from the CIWMB for the County of Santa Barbara [13]. The sorting process will have to be created and implemented at a cost that should be considered in any analysis considering the implementation of conversion technologies in the County. Biopower and CT for Santa Barbara County Draft Report Page 18 of 62

19 Animal manure and landfill gas should also be considered as potential feedstocks. Collection of animal manure from farms can produce only about 0.1% to 0.2% of SBC s electricity demand. Since collection energy requirements will likely exceed the energy produced from this source, utilization in centralized facilities would not be appropriate. Landfill gas represents a unique scenario in that it is often used to produce electricity at the landfill. Landfills collect methane from biodigestion processes and use internal combustion engines or gas turbines to produce electricity for the site. Often, excess electricity is produced and sent back into the grid. This setup is probably best as additional loses would only occur if the County collected the landfill gas and transported to the conversion facility, forcing the landfill to purchase electricity from the grid (in this reconfiguration, more energy would be required in the transport of the gas compared to the status quo where energy is produced where the feedstock is produced). Given these constraints on the animal manure and biosolid feedstocks, we recommend that the focus be placed on other resources instead. 1.d) Economic Potential of Biopower and CT Facilities in Santa Barbara County The economic analysis described in this section has been carried out for a thermal conversion facility and does not apply to biological conversion processes. We do recognize that on a capital cost basis i.e., $/ton of waste processed by a conversion technology, biochemical conversion is cheaper than thermal conversion. However there are other factors we considered important that led us to emphasize thermal conversion. These include 1. Biological conversion produces far less electricity per ton of waste than do gasification-based systems (about 2.5 MW of net electricity per 100,000 tons of waste from biological conversion systems versus about 8 MW from thermal conversion.) If the "fossil free by '33" goal is paramount, this would favor gasification. 2. Biological conversion results in less mass reduction, and thus results in greater residues that need to be disposed of in landfills. In other words, biological conversion achieves a lower diversion rate. We understand that increasing diversion is one of the major goals for the county. 3. A significant portion of the revenues from biological conversion depends on the marketability of the byproduct, compost. However, there is significant uncertainty with regard to regulatory policies and the marketability of this by-product. As we note elsewhere in the paper, some analysts believe the compost market may be quickly saturated. Our focus on thermal conversion technologies is based on our understanding that electricity production and landfill diversion are the main goals. Nonetheless we have no reason to believe there is a desire Biopower and CT for Santa Barbara County Draft Report Page 19 of 62

20 locally within the county to pursue a thermal conversion process or that energy and landfill diversion should be the sole guiding factors in the determination of the appropriate technology. Public acceptance is one of the most important aspects that decision makers ought to be concerned about. Biological systems are viewed as more benign, and are less likely to encounter opposition than thermal systems. 1.d.i) Market Price Referent According to the California Public Utilities Commission, the market price referent (MPR) represents a proxy for the cost of a comparable, long-term contract with a combined cycle gas turbine facility, levelized into a cent-per-kwh value. It also represents a dividing line for bids submitted to the investor-owned utilities for a Renewable Portfolio Standard (RPS) contract such that: Bid prices at or below the MPR may be accepted as per se reasonable by the CPUC; Bids priced above the MPR may be eligible for supplemental energy payments an additional subsidy provided by the state to cover the difference between the MPR and the bid price, subject to funding availability and subject to CEC determination. Adopted 2005 Market Price Referents (Nominal - $/kwh) Resource Type 10-year 15-year 20-year 2006 Baseload MPR Baseload MPR Baseload MPR Baseload MPR Baseload MPR Baseload MPR Baseload MPR Table 10. Adopted 2005 Market Price Referents [19] Table 10 shows the MPR values for a marginal baseload plant for use in the 2005 RPS solicitations issued by the utilities, as per Resolution E-3980, which formally adopted the 2005 MPR. 1.d.ii) Methodology for Determination of Economic Potential of Biopower and CT Facilities Although commercially successful WTE facilities currently operate outside the US, there is little economic information available that is directly applicable to Santa Barbara. Biopower facilities that convert forestry and agricultural biomass residues to electricity on the other hand have been commercially operational within California for many years. To determine whether conversion of MSW (or other biomass) to electricity is economically viable in the County of Santa Barbara, we estimate a break-even tipping fee for MSW (or electricity price) (measured in $/ton) at which a hypothetical biopower/ct facility is likely to Biopower and CT for Santa Barbara County Draft Report Page 20 of 62

21 break even, i.e., the annualized costs equal the annualized revenues. We then compare this break-even tipping fee with the prevailing tipping fee at the Tajiguas Sanitary Landfill, the primary landfill for the southern portion of Santa Barbara County or compare the break-even electricity price to the prevailing electricity generation costs. This is because in the absence of special economic incentives for wasteutilization, landfills or open burning are the alternative to a biopower/ct facility. If the estimated breakeven tipping fee is less than the actual tipping fee, there is a potential for positive profits and a biopower/ct facility becomes economically viable. On the other hand, a higher break-even tipping fee than the prevailing tipping fee implies negative profits and economic unviability in the absence of some variety of subsidy for biopower/ct facilities. 1.d.iii) Uncertainty and Concern in Economic Analysis Due to the lack of data and highly speculative nature of the economic variables in this analysis, it is very important to consider the sensitivity and uncertainty in the parameter assumptions. In several of the break-even calculations performed, only the low capital, low operation and maintenance case was economically viable. Furthermore, the sensitivity analysis through Monte Carlo simulation draws further attention to the large variability in final outcome related to small effects in specific input parameters. Sections 1.d.iv) through 1.d.viii) present the break-even calculations performed and detail the predicted output parameters associated with each. Sections 1.d.ix) through 1.d.x) present and discuss the sensitivity analysis and the volatility of the break-even calculations. It is recommended that the calculations presented in the following sections be thoroughly understood in terms of assumptions and sensitivities before they are used in any decision-making. 1.d.iv) Major Economic Parameters We now describe the major economic parameters and the assumptions used in our economic models. Please note that although we model the economics of biopower and CT separately, the major economic parameters are common to both types of facilities. Costs Capital Cost: The cost of the biopower/ct facility depends on the type of the technology and the plant throughput, i.e., the annual handling capacity of the facility in tons of waste or biomass per year. Table 11 shows representative costs of thermal conversion technologies like gasification and pyrolysis for a waste-handling capacity of 100,000 tons per year. Operating and Maintenance costs: These are variable costs that depend on the type of technology, the quality of feedstock, and overall utilization of the capacity of the conversion facility. Table 11 shows representative costs of thermal conversion technologies like gasification and pyrolysis for a throughput of 100,000 tons per year. Biopower and CT for Santa Barbara County Draft Report Page 21 of 62

22 Fuel Costs: Unlike CT facilities, which incur negative fuel costs (i.e., they are paid a tipping fee for receiving MSW), biopower facilities may be required to purchase biomass feedstock at a certain price. This price would at least equal the cost of collecting and delivering agricultural or forestry wastes to biopower facilities. The costs are likely to be higher depending on the competing uses of biomass. However, if there are laws prohibiting open burning of waste and if there are no alternative disposal mechanisms, BM facilities may also incur negative or zero costs. Cost of Alternative Solid Waste Processing Technologies Model (Number indicates throughput in tons/yr) Capital Cost ($/ton) Annual O&M ($M/year) Net Electricity Capacity (MW) Ebara Whitten IWT Wastegen Average Table 11. Costs of Alternative Solid Waste Processing Technologies Source: City of LA Summary Report on Evaluation of Alternative Solid Waste Processing Technologies by URS Corp. Sep Revenue Sale of Electricity: Electricity sales represent one major source of revenue for biopower/ct facilities. We used a Market Referent Price (explained earlier) of $ per kwh to compute the total revenue from electricity sales by the conversion facility. (We assume that the facility commences commercial operations by 2008 as a baseload power generation facility). Tipping Fees: Tipping fees are the fees paid by waste collection agencies for disposal of waste at a landfill. This represents a second major source of revenue for CT facilities. We use the listed Tajiguas landfill tipping fee of $52.50 per ton [20]. Biopower facilities, in contrast, may be required to pay a price to procure biomass fuel as opposed to receiving a tipping fee. Revenue from sale of recovered recyclables: Recovery of sale of recyclables contained in MSW is considered more economical compared to conversion of recyclables into energy. This is because the value of recovered materials such as paper, glass, metals, etc., is likely to be higher as recyclable material than as feedstock to produce electricity, despite the additional costs incurred for such sorting. Lave, et al., suggest a price of $45 per ton of recyclables [21]. Following Biopower and CT for Santa Barbara County Draft Report Page 22 of 62

23 Lave et. al. we assume that up to 16.5% by weight of the MSW received by the CT facility can be recovered as recyclable material. Federal Renewable Electricity Production Tax Credit: The Renewable Electricity Production Tax Credit (PTC) is a per kwh tax credit for electricity generated by qualified energy resources. The Energy Policy Act 2005, provides 1.9 cents/kwh of income tax credit to closed-loop biomass facilities [22]. 1.d.v) Parameters excluded in cost calculations The following parameters were not considered in our economic analysis mainly because of lack of data. However they warrant inclusion in any detailed economic analysis. Cost incurred for disposal of residual wastes from conversion: All conversion processes result in solid waste comprised of char, ash, metal, glass etc. and liquid waste called sludge that require careful handling and disposal. In most cases these might require disposal at a landfill. The cost of disposal will vary depending on local environmental regulation and the existing markets for such wastes. Revenue from sale of by-products like ash, compost, etc.: Conversion processes result in several by-products such as ash, compostable residues (especially in the case of anaerobic digestion), etc. Depending on the local regulatory and market conditions, these products could be sold to generate additional revenues. Other special subsidies and payments: Special subsidies and payments other than federal production tax credits for alternative power generation like state subsidies on capital cost, subsidies on fuel costs, etc., which would also serve to lower the effective cost of a biopower or CT facility should be included if any exist in future analyses 1.d.vi) Calculation of Break Even Tipping Fee for CT facility Biopower and CT for Santa Barbara County Draft Report Page 23 of 62

24 Calculation of Breakeven Tipping Fee Model Inputs Mean Case Low Capital Low O&M Low Capital High O&M High Capital Low O&M High Capital High O&M Capital Cost of Thermal Conversion Technology ($/ton) $ 700 $ 500 $ 500 $ 800 $ 800 Annual Operating and Maintenance Cost ($/year) $ 7,000,000 $ 5,000,000 $ 8,000,000 $ 5,000,000 $ 8,000,000 Calculated Values Mean Case Low Capital Low O&M Low Capital High O&M High Capital Low O&M High Capital High O&M Total Capital Cost ($) $ 70,000,000 $ 50,000,000 $ 50,000,000 $ 80,000,000 $ 80,000,000 Annualized Capital + O&M Costs ($/year) $ 14,000,000 $ 10,000,000 $ 13,000,000 $ 13,000,000 $ 16,000,000 Difference between annualized cost and annual revenues $ 8,000,000 $ 4,000,000 $ 7,000,000 $ 7,000,000 $ 10,000,000 Break even tipping fee with PTC $ 98 $ 48 $ 86 $ 85 $ 122 Difference between Lanfill fees and Breakeven tipping fee ($/ton) $ (45) $ 4 $ (33) $ (32) $ (70) Parameters Plant Throughput (tons of waste/year) 100,000 Plant Life (years) 20.0 Cost of Capital 7.5% Market Price Referent for Baseload ($/kwhr) $ 0.08 Landfill Fees at Tajiguas Sanitary Landfill ($/ton) $ 52.5 % of waste recovered as saleable recyclables 17% Revenue from recyclables ($/ton) $ 45 Net Generation Capacity (MW) 8 Plant Capacity Factor 85% Federal Production Tax Credit ($/kwhr) $ % of biomass left over as solid residue to be landfilled 20% Capital Recovery Factor 0.10 Net Electricity Sales (MWhr/year) 60,000 Annual Revenues from Electricity Sales ($/year) $ 4,800,000 Annual Revenues from Sale of Recovered Recyclables $ 4,800,000 Annual Revenues from PTC $ 1,100,000 Data Sources Thermal Conversion technology costs are mean values from URS Report to City of LA reference. Lave et al., Journal of Environmental Engineering, October 1999 (see detailed list of references) Mean value for various 100,000 tons per year CTs cited in URS Report to City of LA Federal Renewable Electricty Production Tax Credit - Title 26, U.S. Code, section 45 Table 12. Calculation of Break Even Tipping Fee for a Sample CT Facility Based on the above calculations we can see that the required break-even tipping fee for the conversion facility under the mean case ($98) is higher than the prevailing tipping fee ($53) by about $45 per ton. This implies negative profits (-$45) under the assumed conditions. Even under a low capital and low O&M scenario, profits are -$3. 1.d.vii) Calculation of Break-even Electricity price for CT Facility An alternative approach for determining the economic potential is to estimate the break-even electricity price ($/kwh) at which the CT facility is likely to break even, i.e., the annualized costs equal the annualized revenues. Whereas in the earlier case we assumed all electricity sales to take place at the MPR, in this case we assume the tipping fee to be equal to the landfill fees at the Tajiguas Landfill. Biopower and CT for Santa Barbara County Draft Report Page 24 of 62

25 Calculation of Breakeven Electricity Price for CT Facility Model Inputs Mean Case Low Capital Low O&M Low Capital High O&M High Capital Low O&M High Capital High O&M Capital Cost of Thermal Conversion Technology ($/ton) $ 700 $ 500 $ 500 $ 800 $ 800 Annual Operating and Maintenance Cost ($/year) $ 7,000,000 $ 5,000,000 $ 8,000,000 $ 5,000,000 $ 8,000,000 Calculated Outputs Mean Case Low Capital Low O&M Low Capital High O&M High Capital Low O&M High Capital High O&M Total Capital Cost ($) $ 70,000,000 $ 50,000,000 $ 50,000,000 $ 80,000,000 $ 80,000,000 Annualized Capital + O&M Costs ($/year) $ 14,000,000 $ 10,000,000 $ 13,000,000 $ 13,000,000 $ 16,000,000 Annual cost for disposal of solid residues $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 Difference of total annualized cost and revenues $ 9,000,000 $ 5,000,000 $ 8,000,000 $ 8,000,000 $ 11,000,000 Break even electricity price ($/kwhr) $ 0.15 $ 0.08 $ 0.13 $ 0.13 $ 0.18 Difference between MPR and breakeven price ($/kwhr) $ (0.07) $ (0.00) $ (0.05) $ (0.05) $ (0.10) Effective breakeven price with PTC $ 0.13 $ 0.06 $ 0.11 $ 0.11 $ 0.16 Effective difference with PTC $ (0.05) $ 0.02 $ (0.03) $ (0.03) $ (0.08) Parameters Plant Throughput (tons of waste/year) 100,000 Plant Life (years) 20 Cost of Capital 7.5% Market Price Referent for Baseload ($/kwhr) $ 0.08 Landfill Fees at Tajiguas Sanitary Landfill ($/ton) $ 52.5 % of waste recovered as saleable recyclables 17% Revenue from recyclables ($/ton) $ 45 Net Generation Capacity (MW) 8 Plant Capacity Factor 85% Federal Production Tax Credit ($/kwhr) $ % of biomass left over as solid residue to be landfilled 20% Capital Recovery Factor 0.10 Annual Revenues from Tipping fees ($/year) $ 5,300,000 Annual Revenues from Sale of Recovered Recyclables $ 740,000 Net Electricity Sales (MWhr/year) 60,000 Data Sources Thermal Conversion technology costs are mean values from URS Report to City of LA reference. Lave et al., Journal of Environmental Engineering, October 1999 (see detailed list of references) Mean value for various 100,000 tons per year CTs cited in URS Report to City of LA Federal Renewable Electricty Production Tax Credit - Title 26, U.S. Code, section 45 Table 13. Calculation of Break Even Electricity Price for a Sample CT Facility. Based on the table above we see that the break-even price ($0.15) is larger than the MPR ($0.08) by about $0.07 per kwh, necessitating very large supplemental energy payments from the state just to break even. Although these two analyses suggest that CT technologies are uncompetitive under the assumed conditions, it would be wrong to conclude so definitively due to the uncertainty in the capital and operating costs and in the conversion efficiencies of each technology. However, it seems clear that public support will be required to advance conversion technologies in the County. This could include financial and regulatory assistance from a municipality or state government institution to offset capital and operating Biopower and CT for Santa Barbara County Draft Report Page 25 of 62

26 costs, to facilitate the availability of feedstock, to provide supplemental payments above and beyond the MPR, to develop a market for the various products and by-products of conversion, etc. Future decrease in capital and operating costs can be expected as a result of increased research, development and deployment, learning-by-doing, learning-by-using etc. 1.d.viii) Calculation of Break-even Electricity Price for Biopower Facility The following table shows the economic estimates for a sample biopower facility. For consistency with earlier estimates for CT, we assume a capacity of 100,000 tons of biomass per year. One main difference is that the biopower facility, unlike a CT facility, incurs a positive cost for fuel. Biomass feedstocks such as forestry residues have a higher heating value than MSW and also higher conversion efficiency to electricity. Biopower and CT for Santa Barbara County Draft Report Page 26 of 62

27 Calculation of Breakeven Electricity Price for Biopower Facility Model Inputs Mean Case Low Capital Low O&M Low Capital High O&M High Capital Low O&M High Capital High O&M Fuel cost ($/ton) Calculated Outputs Mean Case Low Capital Low O&M Low Capital High O&M High Capital Low O&M High Capital High O&M Total Capital Cost ($) $ 31,000,000 $ 28,000,000 $ 28,000,000 $ 39,000,000 $ 39,000,000 Annualized Capital cost $ 3,100,000 $ 2,700,000 $ 2,700,000 $ 3,800,000 $ 3,800,000 Annual Fuel costs ($/year) $ 2,000,000 $ 1,000,000 $ 4,000,000 $ 1,000,000 $ 4,000,000 Total Annual Costs $ 8,600,000 $ 7,300,000 $ 10,300,000 $ 8,400,000 $ 11,400,000 Difference of total annualized cost and revenues $ (370,000) $ 960,000 $ (2,040,000) $ (140,000) $ (3,140,000) Breakeven electricity price ($'kwhr) Diff. between MPR and breakeven price w/o PTC ($/kwhr) $ (0.02) $ (0.01) $ (0.04) $ (0.02) $ (0.06) Difference between MPR and breakeven w. PTC ($/kwhr) $ (0.00) $ 0.01 $ (0.02) $ (0.00) $ (0.04) Parameters Plant Throughput (bone dry tons of biomass/year) 100,000 Fuel Heating Value (MJ/kg) 15 Net Efficiency of Plant 20% Plant Capacity Factor 85% Capital Cost of Biomass Gasification Technology ($/kwe net) $ 2,800 Annual Operating and Maintenance Cost ($/kwhr) $ 0.03 Plant Life (years) 20 Cost of Capital 7.5% Market Price Referent for Baseload ($/kwhr) $ 0.08 Federal Production Tax Credit ($/kwhr) $ % of biomass left over as solid residue to be landfilled 20% Landfill Fees at Tajiguas Sanitary Landfill ($/ton) $ 52.5 Annual Electricity Generation (kwhr/year) $ 83,000,000 Net Plant Capacity (MWe) 11 Capital Recovery Factor 0.10 Annual O&M Costs ($/year) $ 2,500,000 Annual lanfilling cost for solid residues $ 1,000,000 Annual revenes for electricity sales $ 7,000,000 Production Tax Credits $ 2,000,000 Total annual revenues $ 8,000,000 Data Sources Representative data from UC Davis' Cost of Energy Calculator ( Federal Renewable Electricty Production Tax Credit - Title 26, U.S. Code, section 45. Table 14. Calculation of Break Even Electricity cost for a Sample CT Facility Table 14 shows that the biopower facility, under the mean case, just breaks even with the PTC, but not so without the PTC. However the economics appear significantly better than for a CT facility. This is partly attributable to the lower capital cost, higher fuel value and higher conversion efficiency. Again it is worth reiterating that these estimates carry significant uncertainty and hence definitive conclusions cannot be drawn without a more comprehensive analysis incorporating risk and uncertainty. They also probably don t incorporate all financial incentives available to developers, discussed in more detail below. Biopower and CT for Santa Barbara County Draft Report Page 27 of 62

28 1.d.ix) Sensitivity Analyses Given the uncertainty in the input parameters to our economic model, we performed a sensitivity analysis using Monte Carlo simulations to determine the sensitivity of the results to our choice of input assumptions. Our procedure was to assume that each input parameter is a random variable with a triangular distribution. A triangular distribution is defined by three parameters: a low value, most likely value and high value. Based on these simulations, we identified two of the most important parameters and then developed point estimates of high and low scenarios. Our assumptions of low and high values for the simulations are listed below. The most likely value is the value used for deriving the point estimates. Sensitivity Analysis Assumed Range for Inputs for Waste Conversion Most likely Low High Capital Cost of Thermal Conversion Technology ($/ton) $ 700 $ 500 $ 800 Annual Operating and Maintenance Cost ($/year) $ 7,000,000 $ 5,000,000 $ 8,000,000 Landfill Fees at Tajiguas Sanitary Landfill ($/ton) $ 53 $ 45 $ 60 % of waste recovered as saleable recyclables 16.5% 15% 20% Revenue from recyclables ($/ton) $ 45 $ 35 $ 50 Plant Capacity Factor 85% 75% 90% % of biomass left over as solid residue to be landfilled 20% 15% 25% Assumed Range for Inputs for BM facility Most likely Low High Fuel Heating Value (MJ/kg) Net Efficiency of Plant 20% Plant Capacity Factor 85% Capital Cost of Biomass Gasification Technology ($/kwe net) Annual Operating and Maintenance Cost ($/kwhr) Fuel cost ($/ton) Cost of Capital 7.5% 7% 8% % of biomass left over as solid residue to be landfilled 20% Table 15. Low, most likely, and high values used for cost simulations An analysis of the sensitivities of break-even tipping fee and break-even electricity price shows that uncertainty in annual operating and maintenance (O&M) and capital costs are the most important factors in the case of a CT facility. Table 16 shows that except for the case with lowest capital and O&M costs, the CT facility does not break-even. Table 17 shows that in the mean case and the case with high capital but low fuel cost, the biopower facility is likely to just break even, while for the scenario with low capital and low fuel cost there is likelihood of positive profits. Biopower and CT for Santa Barbara County Draft Report Page 28 of 62

29 Sensitivity of Economics of Waste Conversion to Capital Cost and O&M cost Scenarios Mean Case Low Capital Low O&M Low Capital High O&M High Capital Low O&M High Capital High O&M Capital cost of technology ($/ton) Annual O&M cost ($ Million /year) Breakeven tipping fee in $/ton at MPR of per kwhr Difference between prevailing landfill fee and breakeven fees ($/ton) Breakeven electricity price at tipping fee of $52.5/ton Difference between MPR and breakeven electricity price ($/ton) Table 16. Sensitivity of Break-even Electricity Price for a Waste Conversion to O&M and Capital Costs Sensitivity of Economics of Biomass Conversion to Capital Cost and Fuel Cost Scenarios Mean Case Low Capital Low O&M Low Capital High O&M High Capital Low O&M High Capital High O&M Capital cost of gasification technology ($/kwe net) Fuel cost ($/ton) Difference between MPR and breakeven electricity price($/kwhr) Table 17. Sensitivity of Break-even Electricity Price for Biopower Facility to O&M and Fuel Cost 1.d.x) Summary of Sensitivity Analyses Capital and O&M costs are the critical economic parameters for both biopower and CT facilities. Considering a range of possible values for these parameters demonstrates that under most conditions, biopower facilities are barely, if at all, profitable. CT facilities are more likely unprofitable, except under low capital and O&M costs. 1.d.xi) Summary of Federal and State Financial Incentives (other than PTC) In this section we summarize some of the key incentives provided at the federal and state level for biomass, which have not been included in our economic assessment. Some of these have expired, while others have restrictions for specific technologies. We mention here only those that are directly and financially relevant, like production subsidies, tax credits, etc. This means we do not consider policies that establish renewable portfolio standards, net metering, funding for research, information programs, etc. The following review is entirely based on a California Biomass Collaborative Report [Contract # ] from June Federal Incentives: The Renewable Energy Production Incentive (REPI) provides incentive payments for electricity sold by new qualifying renewable facilities owned by non-tax-paying entities such as local governments or tribes, including landfill gas, biomass, anaerobic digestion, and fuel cells Biopower and CT for Santa Barbara County Draft Report Page 29 of 62

30 employing renewable fuels. The REPI expired for new projects in December 2003, but was renewed in the 2005 Energy Policy Act through Qualifying Facilities are eligible for annual incentive payments of $0.015/kWh indexed for inflation for the first ten years of the project. MSW combustion projects were ineligible for the program. State Incentives: 1. CPUC Self-generation Incentive (SELFGEN) program encourages customer-owned gridconnected renewable and distributed generation (DG) to help meet on-site energy needs. In 2003, AB 1685 extended the program through Incentive payments are $1 to 4.50/W, depending on technology employed. Incentives for biomass are available for fuel cells, microturbines, small gas turbines, and internal combustion engines operating on renewable fuels up to a maximum capacity of 1.5 MW. 2. Renewable Resources Trust Fund is a Public Benefits Fund initially established in the amount of $540 million by AB 1890 in 1996 and extended through 2012 by AB 995 (2000) with an additional $1.35 billion. The trust fund manages four accounts including the Existing Renewable Facilities Program, the New Renewables Program, the Emerging Renewables Program, and the Consumer Education Program, all administered by the California Energy Commission. The Existing Facilities program is divided into two tiers, with biomass and solar thermal in Tier 1 and wind in Tier 2, and offers support through production credits, as does the New Renewables program. The Emerging Renewables program provides rebates for certain renewables to gridconnected utility customers within the PG&E, SCE, and SDG&E service territories. For biomass, the rebate would apply to fuel cells using renewable fuels. The program provides $3.20/W beginning 1 January, Dairy Power Production Program (DPPP): The dairy power production program was established under SB 5X (2001) and provides two support mechanisms: cost buy downs and incentive payments. The buydown option covers 50% of cost up to $2000/kW. The incentive payments pay for energy at $0.057/kWh. The program is intended to reduce environmental impacts of dairies, particularly nitrates in groundwater and greenhouse gas and pollutant air emissions, and to increase peak electricity generation. 4. Supplemental Energy Payments (SEP): SB 1038 and SB 1078 both require production incentives or supplemental energy payments (SEP) to cover the above market costs of renewable resources selected by the investor-owned utilities (as retail electricity sellers) in fulfilling obligations under the RPS. The California Public Utilities Commission (CPUC), in consultation Biopower and CT for Santa Barbara County Draft Report Page 30 of 62

31 with the California Energy Commission (CEC), establishes a market price referent from which the above-market cost is determined. Eligible renewable energy facilities compete through the existing and new renewable facilities programs of the CEC. SEPs are paid to the extent funds are available from the Public Goods Charge established under AB As of early 2007, no SEPs had been distributed through this program, indicating either that it has not been needed (unlikely) or that it is not an attractive incentive for developers. 5. Rice Straw Tax Credit Program: SB 38 (1996) established the Rice Straw Tax Credit Program. The program is administered by the California Department of Food and Agriculture and encourages the development of off-field uses of rice straw as alternatives to field burning or infield disposal. Eligible purchases of rice straw can be made through The program is in effect until December 1, The aggregate amount of the tax credits granted to all taxpayers cannot exceed $400,000 per calendar year. Certificates are issued in order of receipt. The credit of fifteen dollars per ton of rice straw is allowed against net tax. AB 2514 (2000) established the Rice Straw Utilization Grant Program to facilitate the development of offfield uses of rice straw by providing grants for processing, feeding, generating energy, manufacturing, controlling erosion and other environmentally sound purposes other than openfield burning. The program provides incentive grants at a rate of not less than $20 per ton with no single grant exceeding $300,000. Projects must also demonstrate environmental benefits and the ability to assist in developing a market for rice straw not dependent on government assistance. 1.e) Environmental Impacts of Biopower and CT Facilites 1.e.i) Opposition Due to Concerns about Emissions An essential step in promoting CT will be to address the concerns of communities and campaign groups opposed to deploying these technologies. The primary concerns voiced by these groups about CT are: 1) CT facilities emit toxins (e.g. dioxins, furans, sulfur trioxides, heavy metals). 2) CT facilities reduce the amount of materials available for recycling 3) Conversion of waste to energy should not be considered renewable. These are each addressed in the following sections. 1.e.ii) Emissions for CT Facilities Two Bay Area groups, Greenaction for Health and Environmental Justice and Global Alliance for Incinerator Alternatives (GAIA), published a report in 2006 describing conversion technologies as Biopower and CT for Santa Barbara County Draft Report Page 31 of 62

32 incinerators in disguise, calling pyrolysis, gasification, plasma arc, and catalytic cracking systems a new generation of incineration technologies [23]. These groups consider CT a two-stage combustion process in which the intermediate gas or liquid produced in the first stage is combusted for energy recovery in a second stage. The report includes case studies of failed facilities, including plasma arc systems in Washington and Hawaii and gasification systems in Karlsruhe, Germany and Wollongong, Australia. The latter two failed emissions tests. The Karlsruhe facility, operated by ThermoSelect, was unable to reach nameplate capacity and closed in 2004; the Australian facility went out of business in 2003 and the parent company, Brightstar Environmental, no longer exists. Concerns about emissions are not easily dismissed. For example, the life-cycle analysis (LCA) study by RTI International [24], commissioned under AB 2770, includes the following findings: For criteria air pollutants, the CTs are not necessarily better than existing options. There are not enough data to adequately assess the potential for CTs to produce emissions of dioxins and furans and other hazardous air pollutants (HAPs). Like recycling, CTs will likely result in greater local environmental burdens and a potential reduction in regional or global burdens. No CT facilities exist in the United States for MSW, and therefore, there is a high level of uncertainty regarding their environmental performance. There is much uncertainty about the amount of unwanted metals, glass, and plastics that the CT facilities will be able to remove through the up-front separation and preprocessing steps. For this study, we assumed a 5 percent contaminant level entering the CT process. Higher levels of process contaminants would result in higher levels of local pollutants. However, a subsequent report by UC Riverside s College of Engineering-Center for Environmental Research and Technology [25] evaluated several pilot CT facilities and found emissions to be below EPA and (more restrictive) German regulatory limits, concluding: Independently-verified emissions test results show that thermochemical conversion technologies are able to meet existing local, state, and federal emissions limits. Today, there are advanced air pollution control strategies and equipment that were not available even ten years ago. It is obvious from the results that emissions control of thermochemical conversion processes is no longer a technical barrier. That said, it is recommended that facilities and agencies provide both continuous and periodic monitoring to keep the public informed and ensure ongoing compliance. Biopower and CT for Santa Barbara County Draft Report Page 32 of 62

33 The current circumstances, with competing findings from reputable studies, present a chicken-and-egg problem: emissions data for a commercially-operated CT facility appear to be prerequisites to building such a facility. This leads to one clear policy recommendation: Support the development by the State of California of a commercial scale CT facility to allow rigorous testing and proceed accordingly. 1.e.iii) Dioxin Emissions The dioxin issue is one of the more complex areas surrounding CT and waste management in general. Uncontrolled incineration of municipal and medial waste before the 1990s was responsible for large releases of dioxin into the environment. Conversion technologies and even modern waste incineration emit a tiny fraction of the dioxin previously spewed by incinerators, but the modern systems remain tainted by the legacy of their predecessors. Several points are worth noting about dioxin. 1) All waste management alternatives emit or leach dioxin, even landfilling and composting. According to the EPA, dioxins and furans can also be formed during composting via microorganism action on chlorinated phenolic compounds [26]. High-temperature CT systems, however, also destroy dioxin, and through flash cooling, can prevent its reformulation in the post-combustion phase [27]. 2) At least a third, and perhaps more than half of human dioxin exposure is through dietary exposure due to reservoir (previously emitted) sources [26]. 3) If landfill fires are included, the CT processes, waste-to-energy (WTE), and even coal boilers have lower emission factors for dioxins and furans than landfilling has. However, if landfill fires are excluded, landfills have lower emission factors [24]. The EPA dioxin study completed in 2003 provides estimates for sources of dioxin in Sources quantifiable with reasonable confidence are responsible for an estimated 3255 g/year of TEQ DF - WHO 98 (World Health Organization Toxic Equivalence values for aggregated dioxin/furan species.) This sum omits an additional category of emissions for which estimates are highly uncertain; of this, an additional 1000 g/year of emissions to air is attributed to landfill fires, and 2700 g/year from rural soil erosion to surface water. The EPA considers these figures to be [b]ased on extremely limited data, judged to be clearly non-representative. If these values were certain, they would be the first and third largest known sources of dioxin, with MSW incineration (more certain) in second place with 1250 g/year. If landfill fires produce only half the EPA s estimated dioxin emissions they would still represent the fourth largest source of emissions, between backyard barrel burning at 628 g/year, and medical waste incineration at 488 g/year. Although these emissions are highly uncertain, it is clear that Biopower and CT for Santa Barbara County Draft Report Page 33 of 62

34 landfilling cannot be considered benign from a dioxin perspective. The potential dioxin emissions from conversion technologies should be judged relative to these risks. 4) Waste-to-energy systems provide two services: waste management and energy production. The environmental performance of these systems should therefore be compared to both landfilling and/or composting as the baseline waste management technology, and to the baseline energy production technology. It is also essential to consider distributional equity: who exactly is exposed under these alternatives? Since there are many sources and reservoirs of dioxin and DLCs, it s essential to consider not only the emissions from a single facility that may be under consideration, but to consider the cumulative impact on affected communities from all sources and reservoirs. It seems unlikely that a properly managed CT facility alone will create a health hazard, but it can contribute to one over time. 1.e.iv) Dioxin Emissions from MSW Facilities in Germany Regarding emissions from MSW facilities, the German Environment Ministry says, Emissions of toxic contaminants from waste incineration have been drastically reduced since Total dioxin emissions from all 66 waste incineration plants in Germany has dropped to approx. one thousandth as a consequence of the installation of filter units stipulated by statutory law Whereas in 1990 one third of all dioxin emissions in Germany came from waste incineration plants, for the year 2000 the figure was less than 1%. Chimneys and tiled stoves in private households alone discharge approximately twenty times more dioxin into the environment than waste incineration plants [28]. 1.e.v) Impact on Recycling A major concern for opponents of WTE systems is that these facilities will compete with recycling programs for available materials, thereby reducing recycling and/or composting rates. Underlying this argument is the concern that economics will drive the waste stream to the alternative that provides the greatest profit, or perhaps simply incurs the least cost. For example, the Sacramento-based group Californians Against Waste (CAW) is opposed to giving diversion credit for WTE systems on the basis that closed loop recycling should remain the primary approach followed for waste management. CAW recognizes that the residue from a materials recovery facility (MRF) would be landfilled anyway, and considers it reasonable to convert these to energy [29]. However, CAW is concerned that there will be competition for the highest energy content recyclable plastics and organics such as paper with economic forces steering feedstocks toward CT systems [29]. Biopower and CT for Santa Barbara County Draft Report Page 34 of 62

35 There is evidence that this phenomenon may not occur, and that there can be a high degree of compatibility between WTE systems and recycling [30]. A 2002 survey, detailed in MSW Management magazine indicates that the recycling rate in communities with WTE systems was slightly higher than the national average (33% versus 28%), The article highlights communities in which recycling rates have increased since the introduction of WTE systems in several states. In many cases, the high tipping fees charged at the WTE plant subsidize recycling efforts. A follow-up survey of WTE communities in 2005 yielded similar results [31]. This survey aimed specifically to test the validity of the major concerns voice by environmental groups about WTE systems. The specific concerns dealt with in the survey include: The constant demand for MSW to operate WTE plants at full capacity forms a disincentive to recycle. The existence of put-or-pay contracts (i.e., where a community must deliver a guaranteed amount of MSW to the WTE plant or otherwise pay) forms a disincentive to recycle. Recycling rates tend to be higher where WTE tip fees are high, and there is no put-or-pay contract in place. Investment in WTE capital infrastructure does not leave a lot of capital for a community to also invest in recycling infrastructure. Recycling rates tend to be higher where innovative waste reduction programs such as PAYT programs (i.e., where households are charged for waste collection based on the amount of waste they throw away) are in place. WTE communities would not be expected to have such programs; and WTE is not compatible with recycling since it burns recyclable materials like paper and plastic. The survey results show that: A community s recycling rate does not appear to be negatively influenced by a WTE plant s demand for municipal waste or by the existence of put-or-pay contracts. Ten of the 12 communities contacted (83%) with put-or-pay contracts also reported that their recycling programs are expanding. Further, two of the three WTE communities reporting no recycling growth do not have put-or-pay contracts. Ninety-five percent of the WTE communities contacted specifically reported that their WTE plant has not limited the community recycling rate. Ninety-five percent of the WTE communities reported that their investment in WTE capital infrastructure has not limited their investment in recycling infrastructure. Biopower and CT for Santa Barbara County Draft Report Page 35 of 62

36 Several communities noted that if the objective is to maximize recycling, one may have to guard against the perception that WTE should manage the entire waste stream, including recyclables, plus that the community must sometimes be willing to pay more to recycle if the WTE tip fee is low. Surely the existence of these cases doesn t guarantee that recycling won t be impacted by the use of conversion technologies; it does, however, indicate clearly that this outcome is not pre-ordained. If the County of Santa Barbara opts for a CT facility, it should simultaneously adopt measures to ensure compatibility between recycling and CT systems, such as to guarantee that all materials that can actually be recycled (i.e. not merely shipped abroad) are removed from the waste stream prior to processing in CT systems. That is: ensure that recycling has higher priority than conversion. BRI Energy, which is promoting its waste-to-ethanol technology, has proposed legislation limiting CT to using post-recycled waste, but, according to BRI Vice President James Stewart, they still face opposition from environmental groups. Stewart says 40 million tons of post-recycling organic waste are currently landfilled in California, which would be enough to keep BRI busy for decades [32]. The County of Santa Barbara is planning to develop a new dirty MRF at the Tajiguas landfill to process mixed wastes, seeing this as the only way to further increase recycling rates [33]. Since the public is already recycling at a high rate, the county believes that removing recyclables remaining in the waste stream is the next step. They also recognize that the MRF lays the groundwork for the eventual deployment of CT: the facility will provide a better characterization of the waste stream, and provide the preprocessing necessary for the environmental and economic optimization of a CT system. 1.e.vi) Composting as Preferred Handling of Organics Californian s Against Waste favors maximal composting of non-recyclable organics and prefers anaerobic digestion systems in part because they won t compete for plastics. Scott Smithline, with CAW, says his group does not categorically object to CT as long as diversion credits are off the table. He says when BRI proposed just that, CAW stopped opposing them [29]. According to a report commissioned by the Alameda County Public Utilities Board, composting is limited as a solution in that (a) plastics, which are the fastest growing component of the waste stream, cannot be composted, (b) as a low-temperature process (below 200 degrees Fahrenheit) composting doesn t destroy contaminants, and (c) the supply of compost could easily overwhelm present demand [34]. Biopower and CT for Santa Barbara County Draft Report Page 36 of 62

37 1.f) Siting Biopower and CT Facilities Decisions on siting biopower and CT facilities should consider both transportation costs and community sensitivities. This section focuses on transportation costs. This report presents a feedstock assessment for the county based on municipal wastes, recyclables, forest residues, and agricultural residues. Data was gathered from several sources (see Section 1.c) to quantify the feasibility of producing electricity from these feedstocks in the county. Unfortunately, no agricultural data is available with resolution finer than the county level [35]. This makes it more difficult to discuss optimal siting of facilities in relation to the available feedstocks. It was possible to use average data for each city based on the county profile, but this method would not be best as feedstock amounts from residues can change significantly depending on the crop. What can be inferred from the feedstock data presented is that about 44% of all County landfilled waste is generated by the city of Santa Barbara and landfill feedstocks represent about 57% of total electricity generation potential. This means that the landfill waste feedstock from the City of Santa Barbara represents about 25% of the total electricity generation potential for the County. In the context of facility location, this has strong implications. First, the landfill feedstock is already collected and transported under a waste management infrastructure. This is not the case with forest and agricultural residues where collection and distribution mechanisms may need to be created. Second, the costs of transporting feedstock from its origin to a biopower or CT facility places financial constraints on the siting of those facilities. Facilities located near major resources such as the MSW available in the City of Santa Barbara will likely enjoy lower operational costs (though perhaps higher rent.) The Transportation Research Board puts the cost of truck transport at 5.35 per ton-mile [36]. The City of Santa Barbara generates an estimated 50,000 tons of waste for landfilling each year (Table 2). This means that the County will pay almost $3,000 per mile for the transport of this waste to a CT facility (the largest cost among any town or feedstock within the county). Given this cost and the large fraction of the waste stream, it makes sense to locate any CT facility as close to the City of Santa Barbara as possible. In order to identify a list of top sites it would be necessary to have access to finer resolution data about city feedstocks. As mentioned earlier, this data is presumed not to exist. With the goal of cost and carbon dioxide reduction, siting should minimize transport distances. Attention should be given to the other airborne releases from the biopower and CT facilities as discussed in Section 2.a). Emission residence times (the length of time the emission lingers) must be considered to evaluate if emissions will significantly affect the surrounding population. Although economic considerations are important, it is also important to recognize that political and residential pressures may resist siting facilities near population centers. An interview with Carlyle Biopower and CT for Santa Barbara County Draft Report Page 37 of 62

38 Johnston of the County of Santa Barbara Public Works Office helped identify plausible siting options given the constraints described [33]. Currently, Santa Barbara County has two major landfills and one minor (excluding the facility at Vandenberg Air Force Base). The two major landfills are at Tajiguas and in Santa Maria and are permitted for 1,500 tons/day and 740 tons/day, respectively [37]. The smaller Lompoc facility is permitted for 400 tons/day. Santa Maria Landfill City of Lompoc Sanitary Landfill Tajiguas Sanitary Landfill Figure 2 Possible Biopower and CT Siting Locations for Santa Barbara County (Source: Google Maps) The map in Figure 2 shows the locations of these facilities within the County. The interview with Johnston elaborated on political and residential concerns for a CT facility near a population center. A more plausible scenario would be the siting of such a facility at a disposal site such as Tajiguas or Santa Maria Landfills. This would likely provide the least resistance from residents as the facility would already be located at a waste processing location. Additionally, waste collection logistics would already be configured for transport to these facilities. Based on previous discussions of economic considerations and given the location of Tajiguas and Santa Maria Landfills, it seems to make most sense to site such a facility at the Tajiguas location. Because the City of Santa Barbara constitutes such a large fraction of the Biopower and CT for Santa Barbara County Draft Report Page 38 of 62

39 potential feedstock for any CT facility, the Tajiguas landfill would be the ideal location as it is the closest to the City and close to all major roads. 1.g) Transmission Constraints Santa Barbara County does not appear to be a transmission-constrained region. There are currently several projects to increase transmission capacity between Los Angeles and San Diego [38] but these do not appear to directly affect Santa Barbara County. Additionally, current data pertaining to the loading levels of transmission lines in the County is not publicly available due to national security reasons. However, given that the CT facility may act as a substitute to other imported electricity, and will likely not exceed MW in size, transmission should not be an issue. 1.g.i) Hydrogen Production With recent advances in fuel cell technology and increased investment into research for a hydrogen infrastructure, the use of biomass to create hydrogen fuel can be considered. The US Department of Energy s Energy Efficiency and Renewable Energy (EERE) program has been promoting research into the development of hydrogen through biomass gasification, which converts the biomass into carbon monoxide, carbon dioxide, hydrogen, and other species. The carbon monoxide is then exposed to water to produce carbon dioxide and more hydrogen. This technology is highly immature and not commercially available. The county should postpone further study of hydrogen production from biomass until the technology matures. Biopower and CT for Santa Barbara County Draft Report Page 39 of 62

40 2) Action Plan 2.a) Environmentally Sensitive Siting Siting of MSW conversion facilities should be sensitive to environmental concerns and community values. Environmental sensitivity means both Avoiding harm to ecosystems, including damage to animal habitats. Avoiding discharge of pollution to land, air, or water, where it may affect not only local residents, but downstream communities as well. Sensitivity to community values includes several aspects: Avoiding placement of polluting facilities near communities without their consent. Ensuring community participation in decision making not mere tokenism, but actual empowered involvement in the decision-making process. Ensuring procedural justice, including both accountability and accessible, fair procedures for appealing decisions affecting communities. Ensuring distributional justice: new developments generally distribute costs and benefits to distinct groups of stakeholders. For example, CT facilities are expected to increase local pollution while reducing regional and global pollution [24]. Who should be required to carry this burden? Greenaction.org web page on Plastic Energy LLC [1] Protect Air Quality and the Community from this Toxic Threat Plastic Energy LLC (Hanford Plastic Energy) wants to build a catalytic cracking facility for plastics at 7803 Hanford Armona Road. Hanford residents have a right to know the truth about the potential dangers of this plastics plant that would use an unproven technology for the first of its kind facility in the entire United States... before it is built. The company refuses to meet with residents in a public meeting, yet wants to import waste into Hanford to their proposed plant that would emit pollution into the air. The company wants to receive plastic materials including plastic bottles, shrink wrap, and PVC plastics, then heat the plastics using a thermal technology called catalytic cracking to produce diesel and energy as byproducts. According to a company representative, no energy would be generated for public use. Waste gases would be burned, an incineration process that would emit toxic pollution into the air. Plastics would be shipped to the facility from across the San Joaquin Valley, and possibly from cities and towns in other areas. Kings County Planning Department and the San Joaquin Valley Air Pollution Control District approved this project without public hearings, an environmental impact report or proper notice to residents. The good news is that the Air District suspended the company s permits on August 4th in order to further review the project. The main concerns voiced by communities about siting decisions are: (a) facilities are either expected to release toxic substances into the local environment or insufficient data is available to know if this will be Biopower and CT for Santa Barbara County Draft Report Page 40 of 62

41 the case, and (b) the communities were not informed and involved in the decision to site the facility in their neighborhood [39]. Key principles for siting are: 1. Involve all stakeholders in discussions of proposed developments. Hold community forums early in the process, and post notices of these meetings in the languages spoken by the potentially affected communities. 2. Assess anticipated impacts from the proposed facility, both under normal operation and under failure modes. Perform cumulative impact analysis on residents including the proposed facility in addition to existing exposures. These principles are clearly designed to prevent siting potentially polluting facilities in areas where they will have significant impacts. A particular difficulty for CTs is that waste streams are heterogenous and variable: the actual emissions from CTs depend on the efficacy of waste separation. In addition, there is insufficient data in the US to adequately assess the potential emissions from these facilities, particularly for dioxins/furans and other hazardous air pollutants [24]. 2.a.i) AB 1497 Several of these environmental justice principles are now codified in AB 1497 (discussed further in section 2C). These include requirements for public notification of proposed changes, informational hearings, and comment periods. The informational meeting must be held near the facility at a time when people are likely to be able to attend, and with adequate notification beforehand. The intent is clearly to prevent the situation where the affected community feels ambushed by the change in facilities. Supporters of AB 1497 say the new rules represent substantial progress in the environmental justice movement in California and will help to provide equity and environmental balance for communities that host solid waste facilities, and provides for meaningful public participation and increased opportunities for communities to have a voice in the decision-making process for solid waste landfills in the state [40]. Detractors are concerned AB 1497 will trigger never-ending public hearings, and that the law will prevent CT being sited with existing waste management facilities, resulting in sub-optimal economic and environmental performance [41]. Indeed, given the high-level of community resistance to any wasteprocessing facilities, following these principles may make it very difficult to site a biomass conversion facility unless and until it can be shown that siting these facilities will actually benefit local residents. 2.b) Case Studies of Biopower and CT Facilities While advanced thermochemical conversion technologies are in wide use in Japan and to a more limited extent in Europe, there are no commercial CT facilities in the US presently. EU countries and Japan have Biopower and CT for Santa Barbara County Draft Report Page 41 of 62

42 more rapidly adopted these technologies in response to particular conditions including participation in the Kyoto Protocol, higher population densities and less available space for landfilling, regulatory response to the high emissions from early incineration systems resulting in stricter emissions limits that are more easily met by advanced CT systems [7, 34]. Beyond thermochemical processes, the implementation of anaerobic digestion (AD) facilities is also growing rapidly in Europe, with capacity increasing 250% per year as of May 2005 [7]. Biomass facilities are, as mentioned above, common in California and elsewhere in the U.S. A few cases are examined below, including a set of modern incineration facilities in Connecticut, a landfill gas energy system in California, a proposed plasma arc pyrolysis system tested in California, and a general overview of CT in Japan. 2.b.i) Connecticut Resources Recovery Authority The Connecticut Resources Recovery Authority (CRRA) is a quasi-public agency established by the state of Connecticut in 1973 to modernize the state s solid waste disposal [42]. The CRRA operates both massburn (i.e. no front-end separation of waste stream) and refuse-derived fuel (RDF) facilities. In the RDF facility, trash is pre-processed to remove recyclable metals and other non-combustible materials. The recyclables are sold and the remainder of the non-combustibles is landfilled. The remaining waste is then shredded. This pre-processing produces a more uniform conversion feedstock that can be combusted with higher efficiency, producing steam to spin turbines that generate electricity. The Mid-Connecticut RDF facility can process 2,850 tons per day of MSW, and serves seventy towns and cities. The emissions from CRRA s sites have been closely examined and are well below both health-based and technology-based (e.g. Best Available Control Technology, BACT) standards. Emissions data presented on the CRRA website for several of its projects demonstrates that (a) emissions for mass-burn facilities are generally far below EPA best available control technology regulatory limits for particulate matter, cadmium, and dioxins, and well below the limits for carbon monoxide and sulfur oxides. The Bridgeport Project, however, consistently exceeds limits for emissions of hydrogen chloride by approximately 5%, and there were spikes in dioxin emissions approaching but not exceeding regulatory limits at the Wallingford and Bridgeport facilities in Emissions from the Mid-Connecticut RDF facility were generally lower than those of the four mass-burn facilities [42]. It should be noted that these emissions tests were during normal operations. Much higher emissions can occur during startup and shutdown, and during periods of poor combustion, so the actual use and management of the facility may significantly increase actual emissions [43]. A detailed report on the CRRA Mid-Connecticut facility by the US EPA shows that dioxin emissions were indeed greater under poor combustion conditions [44]. Biopower and CT for Santa Barbara County Draft Report Page 42 of 62

43 2.b.ii) IES Pyrolysis Facility, Romoland, California International Environmental Solutions (IES) is currently in the permitting stage for a 50 tons per day (TPD) pyrolysis facility in Romoland, California. The process operates at 1200 F 1800 F, converting waste into gases and basic elemental solids. The gases are converted to carbon dioxide, oxygen, and water vapor by a thermal oxidizer operating at 2200 F. The process also produces solid residues in the form of carbon, sterile sands, and non-leachable metals [45]. The facility has been tested on MSW, biosolids, fireworks, infested forest trees, and tires. The Romoland facility uses waste heat to generate all power required for the conversion facility itself as well as a co-located wastewater treatment plant [45]. Researchers from UC Riverside s Center for Environmental Research & Technology (CE-CERT) evaluated the emissions from the Romoland facility in a March, 2006 study [25]. As shown in Figure 3, emissions of particulate matter, lead, mercury, and dioxin/furans from the facility were below even strict German regulatory requirements. The facility failed to meet the US EPA s NO x limits. However, the report indicates that since the tests, which were performed in 2005, IES has installed NO x controls, resulting in a 60% reduction, allowing the facility to meet regulatory requirements. Figure 3 also shows that the emissions of dioxin/furan were far below both US EPA and German limits. (The issue of dioxin emissions is discussed further in the section on Promoting Biomass Utilization.) Figure 3 Dioxin/Furan Emissions from three MSW conversion systems. The IES system depicted is the Romoland facility detailed above [25]. 2.b.iii) Lopez Canyon Landfill Gas Energy (LFGE) Project, California The Lopez Canyon LFGE project is located in Sylmar, California. It was jointly developed by the City of Los Angeles Department of Power and Water (LADPW) and the South Coast Air Quality Management District (SCAQMD). The 166-acre landfill was closed in 1996 after 21 years of operation. A Landfill Gas Biopower and CT for Santa Barbara County Draft Report Page 43 of 62

44 Energy (LFGE) system began operation in 1998, using internal combustion engines to generate 6 MW of power, yet the site still produced a significant quantity of landfill gas that was simply flared. Another 1.5 MW of power generation was added in 2002, utilizing fifty 30kW Capstone microturbines (pictured, right) [46]. According to the US EPA, the Lopez Canyon microturbine system is the largest facility of its kind in the world. The microturbines offer several advantages over internal combustion engines including the ability to use lower-energy density landfill gas (as low as 15% methane). and owing to fewer moving parts, they are both quieter and more robust [46]. The microturbines also have very low NO x emissions: the California Energy Commission estimates that the microturbines avoid about 10,000 pounds of NO x emissions annually compared to flaring [47]. 2.b.iv) Tajiguas LFGE Expansion Project, California The Tajiguas landfill in Goleta, California was first opened in 1967 and can process 1,500 tons of trash every day [20]. The facility installed a LFGE system which collects methane gases from the landfill and combusts them in a Caterpillar, model 3616, sixteen cylinder, 4314 brake-horsepower, internal combustion engine. The engine operates an electrical generator which produces up to 3.1 MW of electricity [48]. The landfill is currently upgrading its capacity with an additional 2.84 MW system and the potential to expand that with an additional 1.5 MW, with a total of 7.4 MW at full buildout [49]. The Tajiguas electricity generation system decreases air emissions by reducing fugitive gases escaping from the landfill. Processing of the gases either in the generator or at a flare (where excess gases beyond the capacity of the generator are sent) convert methane to carbon dioxide. Since methane is a more potent greenhouse gas, converting it to carbon dioxide actually reduces the landfill s greenhouse gas impact. Additionally, the generator is equipped with lean burn combustion controls to reduce the emissions of nitrogen oxides, reactive organic compounds, and carbon monoxide [48]. The upgrade to the current LFGE system is not expected to require any transmission upgrades. Additionally, the project will help meet Southern California Edison s Renewable Portfolio Standards where the energy provider must procure 20% of their electricity from renewable resources by 2010 [49]. 2.b.v) Conversion Technologies in Japan The vast majority of MSW pyrolysis and gasification facilities operational worldwide are located in Japan, with ten pyrolysis and thirty-three gasification facilities active as of 2005 much of which has been installed in the past five years [7]. Biopower and CT for Santa Barbara County Draft Report Page 44 of 62

45 Given its high population density and mountainous terrain, Japan has very limited space for landfills and, correspondingly, has long incinerated most of its MSW. Public protest over dioxin emissions from incineration forced the government to adopt stricter emissions standards in This, in turn, has resulted in a rapid adoption of CT as old and small incinerators have been shut down [50]. Figure 4. Commercially active gasification in Japan in cumulative tons/day. This figure represents capacity using MSW that was commercially active as of Currently inactive facilities that were in use during this period are not graphed. [7] 2.c) State and Federal Legislation 2.c.i) State Policy Current state policy regarding conversion technology and waste management in general is beleaguered by a confusing and sometimes scientifically inaccurate set of definitions. The language describing transformation, conversion, diversion, and so on has become a battleground between advocates and foes of CT. 2.c.ii) Background The California Integrated Waste Management Act of 1989 (commonly known as AB 939) established three main requirements for handling MSW: 1. A hierarchy of waste management approaches that should be promoted, in order of priority: source reduction (avoiding the creation of waste); recycling and composting; environmentally safe disposal by incineration or in a landfill. 2. The goal of 25% diversion of waste from landfills by 1995, and 50% diversion by 2000; 3. A requirement that each county develop an Integrated Waste Management Plan. Biopower and CT for Santa Barbara County Draft Report Page 45 of 62

46 The definition of diversion from landfills specifies that this shall occur through source reduction, recycling, and composting activities. An important question is whether CT will be included in the definition of diversion: if it is, foes of CT fear that conversion will undercut reduction, recycling, and composting efforts. If it is not considered diversion, meeting any increases in mandated diversion rates would need to be additional to conversion efforts. 2.c.iii) Definitions The definitions in state law of terms such as transformation, conversion, diversion, and gasification are very confusing. The apparent synonyms transformation and conversion have distinct statutory meanings. Other definitions are seemingly contradictory, and/or simply incorrect. The definition of gasification, in particular, has effectively precluded the use of this technology for waste processing. As currently defined in state law, gasification does not use air or oxygen in the conversion process and produces no discharges of air contaminants or emissions. The first requirement is scientifically inaccurate and the second is theoretically impossible. Numerous attempts have been made by state legislators to include a scientifically correct definition of gasification in the state regulations. Opponents of CT, however, have successfully thwarted these changes, based in some cases on the belief that gasification and pyrolysis are combustion technologies in disguise [23]. This perspective ignores the fundamentally different pollution profiles and cleanup technologies applicable to these processing methods. A key question is whether conversion should be considered a recovery process along with recycling and composting, and thus eligible for diversion credit. This seems to hinge on whether one views diversion as a means to avoid landfilling, or a means to achieve recycling. While these goals are often conflated, they are not the same: waste-to-energy systems are clearly the former and not the latter. Definitions of key terms, as currently defined in California law, are given below. Biomass Conversion is defined by the CIWMB as follows [51]: "Biomass Conversion" means the controlled combustion, when separated from other solid waste and used for producing electricity or heat, of (1) agricultural crop residues; (2) bark, lawn, yard, and garden clippings; (3) leaves, silviculture residue, tree and brush pruning; (4) wood, wood chips, and wood waste; or (5) nonrecyclable pulp or nonrecyclable paper. Biomass conversion is limited to using materials that have been separated from other solid waste. A biomass conversion operation is not considered a solid waste facility and is explicitly excluded by Biopower and CT for Santa Barbara County Draft Report Page 46 of 62

47 definition as transformation. However, an operation that uses controlled combustion of materials not explicitly allowed by PRC is considered a transformation facility. [52] Since 2000, California jurisdictions can claim up to 10 percentage points of diversion credit for biomass combusted to produce heat or electricity [53]. The term biomass, when used for purposes of determining diversion credit, is very limited. "Biomass conversion" uses organic materials such as wood, lawn and garden clippings, agricultural waste, leaves, tree pruning as well as nonrecyclable paper to produce heat or electricity. Biomass conversion cannot include any other materials; combustion of trash is called transformation. Jurisdictions may claim diversion credit for materials sent to qualifying biomass facilities as explained below. This diversion credit, which began in the 2000 report year, may not exceed 10 percentage points of a jurisdiction's diversion rate. [51] Unfortunately, the term conversion has incompatible definitions when used in the phrases biomass conversion and conversion technology. Combustion is included in biomass conversion but excluded in conversion technology, and while biomass conversion is limited to processes producing heat or electricity, conversion technology is capable of producing heat, electricity, gases, liquid fuels, and other chemicals. Gasification is defined as a technology that uses a non-combustion thermal process to convert solid waste to a clean burning fuel for the purpose of generating electricity, and that, at minimum, meets all the following criteria: 1) The technology does not use air or oxygen in the conversion process, except ambient air to maintain temperature control. 2) The technology produces no discharges of air contaminants or emissions, including greenhouse gases. 3) The technology produces no discharges to surface or groundwaters of the state. 4) The technology produces no hazardous waste. 5) To the maximum extent feasible, the technology removes all recyclable materials and marketable green waste compostable materials from the solid waste stream prior to the conversion process and the owner or operator of the facility certifies that those materials will be recycled or composted. 6) The facility where the technology is used is in compliance with all applicable laws, regulations, and ordinances. 7) The facility certifies to the CIWMB that any local agency sending solid waste to the facility is Biopower and CT for Santa Barbara County Draft Report Page 47 of 62

48 in compliance with this division and has reduced, recycled, or composted solid waste to the maximum extent feasible, and the CIWMB makes a finding that the local agency has diverted at least 30 percent of all solid waste through source reduction, recycling, and composting. As many have noted, this definition is scientifically incorrect, not the least of which because no technology including the business-as-usual technology of landfilling produces zero emissions. Moreover, several of these items define the purposes for, or pre-requisites for using gasification in waste management, which are not reasonably part of the definition of the technology or process itself. Transformation is defined to mean incineration, pyrolysis, distillation, or biological conversion other than composting, and does not include composting, gasification, or biomass conversion, as defined above. Regarding diversion, the CIWMB website says [51]: For purposes of diversion credit, "transformation" means burning solid waste to produce heat or electricity. Although solid waste typically includes some organics, operations that exclusively burn organic materials are engaged in "biomass conversion," which is treated differently in terms of diversion rate measurement. Although some conversion technologies such as pyrolysis and gasification are explicitly mentioned in this definition of transformation, others such as hydrolysis and plasma arc are not included. No specific statutory definitions exist for the incineration, pyrolysis, distillation, or gasification technologies that are included in the transformation definition. The definition of recycling in PRC specifically excludes transformation. [52] It would be preferable to have the state set technology-neutral emissions standards for waste processing since regulations based on process definitions will necessarily fail to anticipate new processes or new combinations of processes. Transformation facility is defined as a facility whose principal function is to convert, combust, or otherwise process solid waste by incineration, pyrolysis, destructive distillation, or gasification, or to chemically or biologically process solid wastes, for the purpose of volume reduction, synthetic fuel production, or energy recovery. Transformation facility does not include a composting facility. [54] Oddly, the term transformation facility is defined to include a process that is excluded from the definition of transformation, i.e. gasification. Biopower and CT for Santa Barbara County Draft Report Page 48 of 62

49 Anaerobic Digestion (AD) is defined as a form of composting (although it generally converts waste to methane which is captured for energy conversion) and not biomass conversion. The production of syngas through gasification, however, is a CT and treated distinctly. Composting and AD earn full diversion credit, whereas CT does not. The reason for this distinction is more likely political than scientific. As an example of the significance of these definitions, the BioEnergy Producers Association wrote to the CIWMB in 2005 to object to a report prepared under AB 2770 in which anaerobic digestion was redefined as a CT, as this would remove eligibility for diversion credit, which the association viewed as a step backward. Waste diversion means to divert solid waste, in accordance with all applicable federal, state and local requirements, from disposal at solid waste landfills or transformation facilities through source reduction, recycling or composting. [54] Waste diversion, as currently defined, does not include conversion technologies. 2.c.iv) Recent Legislation AB 1090 AB 1090 (Barbara Matthews, 2005) originally defined conversion technology and included it in a management hierarchy with recycling and other technologies. The bill also would have repealed the unscientific definition of gasification and would have allowed diversion credit for CT. The bill has been opposed by groups such as Californians Against Waste (CAW), which see CT as a means of undoing progress toward recycling, composting, and waste reduction. They also consider gasification and pyrolysis to be incineration in disguise. The bill was stalled for most of 2005, then amended substantially to remove diversion credit, repeal the gasification definition, define CT as a solid waste facility, amend the definition of compost to include anaerobic digestion, amend transformation to mean solid waste incineration [55]. Other bills that aimed to change the status of CT have died in committee, including AB 177 (Bogh), and AB 727 (Bermudez). AB 1497 Enacted in 2004, AB 1497 (Montañez) established significant new regulations for waste management facilities. The final text of the rule-making for AB 1497 was adopted on October 17, A primary purpose of the regulation is to provide a consistent, transparent and accessible permit process that allows the public to be better informed of proposed new facilities or changes being proposed in the Biopower and CT for Santa Barbara County Draft Report Page 49 of 62

50 design or operation at existing facilities and to strengthen information reported to CIWMB on level of community outreach to assist CIWMB in determining what additional actions if any might be needed to meet environmental justice objectives [56]. The bill addresses a critical environmental justice issue frequently raised by affected communities: lack of information and notification of changes to facilities that may adversely affect their health and well-being. Under the regulations, public hearings with specified notifications to affected communities are triggered whenever a significant change to existing facilities is proposed. The adopted rulemaking includes a precise definition of this significant change which clearly includes the addition of CT to an existing waste management facility. AB 2770 The following description of AB 2770 is taken from the BioConversion blog (bioconversion.blogspot.com) [57]. AB 2770, signed into law in 2002, directed the Waste Board to conduct studies in order to determine the environmental feasibility of conversion technologies, assess their relative impacts, and ascertain their potential affect on the recycling market in California. On March 15, 2005, the Waste Board capped off the results of a two-year effort involving two studies completed in conjunction with the Universities of California at Riverside and Davis, and adopted a comprehensive report which found that conversion technologies can result in substantial environmental benefits for California while complementing and enhancing California s recycling market. The report helped to place conversion technology in the proper perspective; it recommended a number of sound and impartial improvements that would allow the legislature and other decision makers to consider conversion technology based on the merits of its relative benefits and impacts. However, on April 19, the Waste Board buckled under intense political pressure from an environmental group* and certain key members of the State legislature who held up the confirmation process of Waste Board Chair Rosario Marin and Waste Board Member Rosalie Mule unless they reconsidered the adopted report. As a result of this pressure, the Waste Board voted to remove any information or recommendation not specifically required in AB 2770, purging significant portions from the report including a recommendation to consider providing diversion credit to jurisdictions utilizing conversion technology. Because many local jurisdictions voiced opposition and concern to these revisions at the May 11 meeting, the Waste Board amended their April 19 decision. In a significant victory for proponents of conversion technologies, the information and recommendations eliminated from the original report will be made available in a Biopower and CT for Santa Barbara County Draft Report Page 50 of 62

51 separate public document, providing an independent corroboration by the State Waste Board to the positive aspects of conversion technologies the Task Force had been promoting. In a report prepared for Alameda Power and Telecom [34], Advanced Energy Strategies notes that: AB 2770 did not provide any credit for diversion of MSW from landfill disposal by gasification projects. The general attitude in Sacramento is that current recycling efforts and composting are achieving the 50 percent diversion goal set by the state. Development of conversion technologies is not seen as an acceptable substitute means for reaching the 50 percent level of diversion; conversion is viewed as a means by which we can increase diversion above the 50 percent level. Therefore, there is no need to address diversion credits for conversion technologies at the state level unless and until a higher diversion goal is established. SB 1038 The California Energy Commission (CEC) administers programs to promote both existing and emerging renewable resource technologies. Authorization for these activities was renewed in SB 1038 which become law in Among other things, the legislation includes gasification of MSW as a renewable technology, subject to a definition of gasification that is identical to the one in AB The legislation also sets specific goals for use of renewable energy by investor-owned utilities and encourages municipal utilities to increase their use of renewable power. To date, the CEC has deferred to the CIWMB for determination of when gasification technologies meet the definition of renewable power. [34] 2.c.v) Status of Current Bills The CIWMB tracks priority bills on their website at The following is excerpted from that site as of Sept 15, 2006: Bill: AB 727 (Bermudez) Subject: Solid waste: biomass conversion Status: Died. Returned to Secretary of Senate, Pursuant to Joint Rule 56 This bill would require the CIWMB, in conjunction with the ARB, to select six solid waste facilities in California for testing conversion technologies. In addition, the CIWMB and ARB would be required to develop a work plan detailing the methods that will be used at each facility and annually report the results of the conversion technologies tested to the Legislature. Bill: Subject: AB 1090 (Matthews) Solid waste: diversion: conversion Biopower and CT for Santa Barbara County Draft Report Page 51 of 62

52 Status: Died. Returned to Secretary of Senate, Pursuant to Joint Rule 56 This bill adds recovery, through recycling, composting, conversion technology, or other beneficial use technologies to the existing waste management priorities for the CIWMB. Bill: AB 2118 (Matthews) Subject: Solid waste: diversion: conversion Status: Senate Committee on Environmental Quality In addition to nonsubstantive changes, this bill would state the intent of the Legislature to provide a definition of "conversion technologies" that clarifies the CIWMB's limited jurisdiction over the process and states that such facilities would be subject to all applicable environmental and health regulations. [Also defines composting to include anaerobic digestion.] Bill: SB 411 (Alarcón) Subject: Solid waste: nonbiodegradable materials: landfills Status: Returned to Secretary of Senate, Pursuant to Joint Rule 56 This bill would eliminate diversion credit for green material and woody waste used as alternative daily cover (ADC). The CIWMB would be required to develop a schedule for excluding green material and woody waste used as ADC from being included in meeting the 50 percent diversion requirements of the act. The CIWMB would be required to adopt or revise regulations regarding the conditions for use of the alternative daily cover. Bill: SB 926 (Florez) Subject: Solid waste facility: local initiative: environmental impact report Status: Assembly Committee on Rules The California Integrated Waste Management Act of 1989 prohibits a person from operating a solid waste facility, as defined, without a solid waste facilities permit, if that facility is required to have a permit. This bill would also require that before a local initiative that proposes to amend a city or county's general plan or zoning ordinance to allow the siting of a solid waste facility may be placed on the ballot, an environmental impact report on the project must be prepared and certified pursuant to the California Environmental Quality Act (CEQA). The bill would specify that the county in which the facility is proposed to be sited is the lead agency and that the project is the siting of the solid waste facility, as proposed by the local initiative. The bill also would require the county to make the environmental impact report publicly available, as specified. Bill: Subject: Status: SB 1778 (Alcarcon) Solid waste: alternative daily cover: compost Held in Senate Committee on Appropriations Biopower and CT for Santa Barbara County Draft Report Page 52 of 62

53 This bill would require that if the alternative daily cover for a solid waste landfill is comprised of woody and green material, that material is not to be considered as part of the 50 percent of solid waste that must be diverted, and is to be included in the amount of solid waste that is subject to disposal for purposes of the diversion requirements of the California Integrated Waste Management Act. This bill would also require the CIWMB to develop a schedule for excluding solid waste that is used as an alternative daily cover and comprised of woody and green material from being included in meeting the diversion requirements of the act. The bill would require the Board, on or before January 1, 2010, to adopt or revise regulations that establish conditions for the use of alternative daily cover. Bill: SB 1835 (Florez) Subject: Solid waste facility permit: enforcement agency Status: Enrolled to the Governor This bill would prohibit a local enforcement agency (LEA) from issuing a solid waste facilities permit for a solid waste facility approved by a local initiative measure, and the CIWMB from concurring with such an action, unless the facility is consistent with local, State, and federal standards. 2.c.vi) Recent Federal Legislation The Energy Policy Act of 2005 (EPACT05) includes several incentives for energy production from municipal solid waste. EPACT05 defines renewable energy to include electrical energy generated from MSW. Accordingly, as mentioned above, the federal production tax credit (approximately 1.9 cents/kwh) applies to biomass and CT facilities that use MSW. 2.d) Policy Mechanisms for Promoting CT According to the CIWMB, development of CT has not occurred yet in California for several reasons, including: Statutory definitional issues Opposition due to concerns about dioxin emissions and other residuals (discussed in section 1.a.iii) Controversy over the provision of diversion credit for materials processed by CT Concern about impacts on recycling markets Difficulties in funding first-of-kind facilities These items are discussed below. 2.e) Recommendations for Strategies to Optimize Biopower and CT Installations In section 1.f), major siting issues for a CT facility in Santa Barbara county were discussed. An action plan aimed at siting biopower or CT facilities in the County should consider the following issues: Biopower and CT for Santa Barbara County Draft Report Page 53 of 62

54 1. Economics The transportation of feedstock from each source to the facility could be a large cost if the facility is not sited near major feedstocks or transportation routes. The city of Santa Barbara represents about 25% of the available feedstock so siting near the City will be important. Also, accessing the interstate and major arterials along the coast will also be important for lowering transport costs. 2. Environmental The release of airborne emissions from the installation should be carefully considered in picking of an optimal location. If airborne emissions from the installation are deemed to pose a human health threat then optimal siting should considered the social and economic costs of this problem. The installation should probably be located in a region where minimal impact to human health would occur. 3. Opposition With the environmental concerns outlined above, social and political pressures may make it difficult to site a biopower or CT facility in a geographic area new to public scrutiny. Instead, it may be easier to site the facility at an existing landfill which has already been accepted with its potential impacts by residents. The Tajiquas landfill is an ideal location since it the major landfill for the County, located near the interstate, and located near a major component of the feedstock (the City of Santa Barbara). Resolving the dioxin issue will require collection of data from commercial scale facilities and conclusively demonstrating that emissions from CT facilities can be managed at very low levels. 2.e.i) Promoting Biopower and CT Facilities in Santa Barbara County The County of Los Angeles is embarking on a new outreach campaign to educate the public about conversion technologies and its plans to develop a demonstration facility. The LA Department of Public Works recently issued an RFP [58] to develop this campaign, an excerpt of which is shown in Figure 5. Biopower and CT for Santa Barbara County Draft Report Page 54 of 62

55 Figure 5 Excerpt from LA DPW s Request for Proposals for a CT public education campaign. 2.e.ii) Ensuring Sufficient Transmission The cost of constructing transmission lines for a new facility will likely be a factor in the economic feasibility of any new facility. Table 18 illustrates the typical transmission line costs. Biopower and CT for Santa Barbara County Draft Report Page 55 of 62