Glenbard Wastewater Authority Combined Heat and Power (CHP) Project Case Study

Transcription

1 Glenbard Wastewater Authority Combined Heat and Power (CHP) Project Case Study Christopher Buckley & Eider Alvarez October 27, 2015

2 Presenters: From B&W Wastewater Department - Chicago Office: Chris Buckley, P.E., BCEE B.S. from Marquette University M.B.A. from DePaul University Joined B&W in 2010 CHP Projects: Downers Grove Sanitary District (2011) Glenbard Wastewater Authority (2015) Eider Álvarez-Puras, EIT B.S. in Chemical Engineering UPV (Spain) M.S. in Environmental Engineering IIT 2013 Joined B&W in 2014 CHP Projects: Glenbard Wastewater Authority (2015) DeKalb Sanitary District (2015)

3 Presentation Overview 1. Introduction to Combined Heat and Power (CHP) systems What is it? Why to do it? Things to consider 2. Case Study: Glenbard Wastewater Authority CHP Project Wastewater Treatment Plant (WWTP) Overview Scope & Schedule Design Build Costs and Payback Analysis Project Status 3. Summary and Lessons Learned 4. Questions

4 What is a CHP?

5 What is a CHP? How does it work? Stands for Combined Heat and Power, it is a cogeneration system. At WWTPs, cogeneration means generating electricity to offset electricity purchased and heat to warm digester sludge and/or heat buildings. The engine can be fueled by: Biogas generated at the anaerobic digesters in the WWTP free! or Natural Gas

6 CHP systems are more efficient than separated generation of electricity and heat

7 Why are WWTPs looking into CHP systems? Sustainable Towards Zero Net Energy WWTP: Use biogas that otherwise will be flared for good use! CHP systems are more efficient than conventional separated heat and power generation. Save Money: Off-set 3rd party electrical and natural gas costs being used for WWTP treatment. Grant Funding: Simply put, you can get paid to do it! Grant funding available to offset design and construction costs.

8 Things to Consider Energy Management (such as CHP) is not always a priority at WWTPs - With current effluent limits becoming more strict, upgrades to the wastewater treatment process is the main priority. Opportunities for energy savings may be overlooked. Cost Barriers: High capital cost equipment is required: 1. CHP Units, 2. Gas Treatment (to protect high cost CHP s), 3. Hot water piping and pumps, 4. Instrumentation and controls, 5. Electrical connections. Biogas Availability - Not every plant generates enough biogas to run the CHP units exclusively on biogas fuel. Boosting the biogas generation at the plant is possible, if co-digestion is implemented at the WWTP.

9 Co-digestion = More biogas = More Energy Anaerobic Co-digestion of the sewage sludge with food waste or FOG (Fat, Oil and Grease) increases the organic loading at the digesters, and therefore, the rate of biogas production. Implementing a FOG/food waste receiving program yields to more energy production Downers Grove Sanitary District Digester Data

10 Case Study: Glenbard Wastewater Authority New CHP Building Design ADF = 16 MGD HPO AS Process 3,200 KWh/MG Current Biogas Production = 6,000 to 7,000 CFH Expect to double biogas (with codigestion) Future Biogas Production = 12,000 CFH Currently heating digesters by firing boilers with biogas and natural gas

11 Glenbard CHP Project - Origin of Project Opportunity Money CHP manufacturer prepared a grant application for the installation of a CHP system at Glenbard WWTP: 1. Grants: ICECF: $250,000 DCEO Grant: $702,000 for design and construction. Total $952, But Grant deadlines - Tight schedule! General Design by May 31, 2015 $57,000 Design Grant provided upon submittal. Facility On-Line by May 31, 2016 One Year Operating Confirmation

12 Glenbard CHP Project - Conceptual Scope of Project 1. Two (2) 380kW CHP Units: To Generate Power & Heat One unit fire with biogas Second unit fire with Natural Gas until co-digestion in place 2. Gas Treatment Equipment: To Remove Biogas Impurities & Prevent Damage to CHP Units Moisture/particulate removal Hydrogen Sulfide Filter Siloxane Removal 3. Support Facilities New Building for Equipment Electrical connections to WWTP electrical grid Hot water piping connections to Digester Boilers 2 3 1

13 Glenbard CHP Project Conceptual Payback Per Grant Application, Project Cost: 2 CHP units (760kW) $ 1,450,000 Gas treatment equipment $ 755,000 Support Facilities $ 660,000 Engineering Cost $ 100,000 Grant Application ($ 952,000) Total $ 2,013,000 Project Savings: Per CHP unit, Electricity = offsets 365 kw x 8640 h/y x $0.06/kW $189,000 Thermal Output = offsets 1.44 MMBTU/h x 1 therm/0.1mmbtu x 8640 h/year x $0.41/therm $ 51,000 Total Annual Savings $240,000 Simple Payback = Capital Cost / Annual Savings = 4 (if both CHP units on biogas) to 8 years (if only one CHP running)

14 Glenbard CHP Project How to get it done in time? The cost, savings and grants made the project very appealing! However, the grant required the project to be done in 12 months. How could the project get done in time?

15 Glenbard CHP Project - Barriers to Schedule Project Delivery Alternative 1 - Traditional Design-Bid-Build (D-B-B) 1. Design Phase: Architect or engineer design produce bids documents, drawings and specifications 2. Bidding Phase: General contractors bid on project. Competitive bidder: Typically, most competitive bidder gets the project. 3. Construction Phase: Project components installed by sub-contractors. General contractor primarily manages construction Equipment Procurement: 4 to 6 months and cannot start until Contractor Notice To Proceed. Total Time to Complete Project: 18 to 24 months

16 Glenbard CHP Project - Schedule Solution Project Delivery Alternative 2 - Progressive Design-Build (D-B): 1. Design Partnership: Between Designer and Constructor Preliminary and Final Design Equipment selection 2. Construction: Overlaps with Design! Starts before the design is completed. 3. Not True Competitive Bidding Guaranteed Maximum Price Agreement to Limit Costs & Scope Including structures, Equipment, Mechanical Piping, Electrical Connections, Fire Protection 4. Equipment Procurement: Ordered Immediately Total Time to Complete Project: 10 to 13 months!

17 Glenbard CHP Project B&W Design-Build Team Design-Built was the solution for meeting the grant schedule B&W Design-Build Team was selected to execute project Design-Build Team Design Consultants General Contractor Electrical Contractor Mechanical Constructor (Baxter & Woodman) (Boller Construction) (Homestead Electrical) (Dahme Mechanical) First task performed by the team: Verify Project Conceptual Cost

18 Glenbard CHP Project - Project Cost Reality Check The Conceptual capital cost was revised by the team: Updated cost on structures, mechanical items, equipment, engineering fees Project went from $2.01M ($2.96 w/o grant) to $4.78M ($5.73 w/o grant) Reasons for increased cost: New building, piping and electrical really underestimated. Engineering costs underestimated. Grant Application Project Cost Revised Project Cost 2 CHP units $ 1,450,000 $ 1,667,000 Gas Treatment Equipment Support Facilities Engineering Cost $755,000 $ 851,000 $ 660,000 $ 2,590,000 $ 100,000 $ 425,000

19 Glenbard CHP Project High Project Cost Client still interested because of the inherent benefit of CHP but now wary about the TRUE financials for the project. Again, opportunity project..not required by regulatory. Ok, Design-Built Team 1. How do we lower the project costs? a) Alternative equipment suppliers. b) Should we install one 360 kw unit and the 2 nd one later? 2. What is the TRUE Payback on project? Factor in many additional variables..reduce ASS-umptions.

20 Glenbard CHP Project - How To Lower Project Cost? a) What about different CHP equipment suppliers? Evaluated four (4) different CHP suppliers and select the most economic. Most major CHP equipment made in Europe - Europe is ahead of the US in Energy Management b) Should we install one 360 kw unit and the 2nd one later? Project Costs were prepared for Two Alternatives: 380 kw CHP system $ 3.75 M ($4.35 w/o grant) 760 kw CHP system $ 4.04 M ($4.99 w/o grant) Why cost not much different with one CHP versus two? Economies of Scale Why is a building even necessary?

21 Glenbard CHP Project - What Is The True Payback? The Payback = Cost/Savings approach used before was overly simplistic. A REAL payback of the project includes many competing factors.

22 Glenbard CHP Project True Payback Identified the main factors impacting the payback: Developed three major payback scenarios covering a wide range of situations Best Case Scenario (Goal) Middle Case Scenario A & B (Most-likely scenario) Worst Case Scenario A & B (for demonstration purposes)

23 Project Payback Payback Scenarios Scenarios and Sub-Scenario Highlights Best Case Scenario (Goal) Highest Value of Energy Savings Maximize Co-digestion Average Annual O&M Costs Grant Funded Middle Case Scenario (Most-likely) Mid Value for Energy Savings Average Co-digestion Average Annual O&M Costs Grant Funded Case A Case B Tech 3 Equipment Base Nissen Equipment Base Worst Case Scenario (Demonstration purposes) Low Value of Energy Savings Low Co-digestion Inflated Annual O&M Costs No Grant Funding Case A Case B Tech 3 Equipment Base Nissen Equipment Base

24 years Project Payback Most-likely scenario For the most-likely (middle case) scenarios: The payback ranged from 9 to 10 years with enhanced biogas production (implementation of Co-digestion) 14 to 16 years with current biogas production With Co-digestion, net savings at Year 20 ranges from $5.5M to $7.4M kw SYSTEM PAYBACK At Current Biogas vs. Boosted (incl. FOG) Biogas Current Biogas Production Boosted Biogas Production WORST CASE A WORST CASE B MIDDLE CASE A MIDDLE CASE B BEST CASE Net savings at year 20, end of equipment life cycle (with Boosted Biogas Production) $220,247 $1,091,747 $5,539,887 $7,376,259 $18,537,484

25 Project Payback Findings For every scenario, the payback is best when: 760 kw System is installed (2 CHP units) Generates maximum energy and heat Doubles grant funding FOG/Co-generation program is implemented for additional biogas generation and tipping fees. Glenbard decided to pursue the 760 kw CHP system and look for FOG suppliers (restaurants, industries, residents )!

26 Glenbard CHP Project Project Progress 1. Preliminary Design - Completed Reviewed Conceptual Design and Grant Applications Revise Building Location (closer to Digesters and Electrical Building) Preliminary Layouts Alternative Equipment Supplier Options Payback Analysis Maximum Price Proposal Contract PROGRESSIVE DESIGN-BUILD Weekly meetings with Team and Client 2. Detailed Design & Construction - On-going Equipment Selection and Procurement - Completed. Detailed Building Layout - Completed Equipment Specifications Review - Completed Structural, Mechanical, Electrical, Plumbing, Site, Controls & Instrumentation Drawings Partially completed Building Permits Partially completed Site Preparation and Utilities Excavation/Relocation - Completed Foundation Construction ---Just started!

27 Glenbard CHP Project Scheduled Milestones 3. Installation (Fall/Winter/Spring ) Finalize CHP building shell, roof and site improvements Install HVAC, plumbing, piping, fire protection and electrical appliances Receive and install CHP equipment and gas treatment. Prepare plant s SCADA system to control new equipment Start-up and commissioning. Operations Facility to be on-line and operating by May 31, 2016!

28 Glenbard CHP Project Summary /Lessons Learned CHP Systems in WWTP Sustainable Opportunity for Energy Savings CHP Costs - High cost for CHP equipment and gas treatment and supporting facilities. CHP Equipment Selection Compare manufacturers and specs Payback Many factors affects payback and savings Boosting the plant biogas production is ESSENTIAL! Predicting future electricity and natural gas costs is hard. Need to factor in equipment O&M and replacement. Progressive Design-Build Can help meet funding deadlines.

29 GLEWA CHP Project - Questions Questions or comments? Thank you!

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