Sustainable Waste Consultancy School of Chemical Engineering The University of Queensland Queensland 4072 Phone: (07) 3365 6195 Fax: (07) 3365 4199

28 March 2014

Brisbane City Council

Dear Brisbane City Council,

In response to a brief regarding the development of a 25MW waste-to-energy plant, SWC has prepared a proposal. The proposal includes the following:

An introduction and preliminary investigation of waste-to-energy technologies Technical information for anaerobic digestion process and power generation A process flow diagram detailing the units and flows of the process A zero-net emissions plan and sustainability study An economic feasibility study Analysis on social sustainability of the process Details of process simulation and optimisation An exergy analysis over relevant units

If there are any problems or questions regarding the report and the recommendations outlined, please do not hesitate to contact me using the details above. It was a pleasure undertaking this project and welcome the opportunity to be involved in the latter stages of the project as well as future projects.

Yours Sincerely,

Sustainable Waste Consultancy

Louis Fredheim Project Leader Chloe Leung Team Member Damien Naidu Team Member Kritik Prasad Team Member Geraldine Terada-Bellis Team Member

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MUNICIPAL WASTE TO ENERGY PROPOSAL

Contributors:

Louis Fredheim (42665780) Chloe Leung (42656452) Damien Naidu (42661782) Kritik Prasad (42355894) Geraldine Terada-Bellis (42355492)

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EXECUTIVE SUMMARY

The objective of this project was to design a waste-to-energy plant for the Brisbane City Council that would be capable of generating 25 MW of electrical power for the city using a feedstock of pre-prepared municipal solid waste. The final design was an anaerobic digestion process with physical absorption (though later removed due to economics) and Heat Recovery Steam Generator (HRSG).

From mass and energy balances it was determined that the plant would be receiving a total of 781 000 t/year of municipal solid waste and produce 102 000 t/year of biogas at composition of 52 wt% CH4, 48 wt% CO2. From this feed of biogas, the gas and steam turbines would be capable of producing a combined generation rate of 53.1 MW. The air compressor, biogas compressor and pump required a combined consumption rate of 21.3 MW. This resulted in a net power production rate of 31.8 MW. In addition to this, the plant would be providing 43.0 MW of low grade heat to the EcoPark in the form of hot water at 79OC.

From exergy analysis it was determined that the HRSG and condenser each had high irreversibilities due to the fact that phase changes occurred in these units and that the gas and steam turbines had a combined irreversibility of 10.3 MW, which is fairly high but could only be reduced by purchasing more efficient, more expensive turbines. The thermal efficiency of the plant was also calculated as being 42% and once the low grade heat being supplied to the EcoPark was taken into account, this thermal efficiency increased to 98%.

A payback period of approximately 10-11 years was calculated, within a predicted plant life of 20 years. A long-term fixed interest rate of 4.65% was assumed according to literature. The calculated Net Present Value is at $194.9 million (AUD, 2014), with an internal rate of return at 9%. Although 9% does not meet the energy industrys hurdle value of 12%, the project is still feasible. The levelised cost of energy analysis similarly showed that there is a rate of 27.5c/kWh for the overall plant, which falls short of the literature value of 7.5c/kWh. This highlights that this plant is a service more than it is a source of income.

In order to offset the greenhouse gas emissions, SWC will invest and buy carbon credits from swine waste-to-energy projects, totalling a cost of $1.2 million. The sustainability assessment found that the process was valuable and significant environmentally, with around 1 million tons of CO2 equivalent not emitted.

The political and social drivers for project include the Brisbane community that want to implement a process that is safe, minimises greenhouse gas emissions, and minimises cost to ratepayers. The different levels of government have similar goals to promote waste avoidance and reduction, and reduce consumption of natural resources. It was found that investment in infrastructure will be important to ensure that electricity from the biogas can be adequately accepted by the electrical grid. Community research from other councils suggests that anaerobic digestion is the preferred waste management technology. The limitations of the process are that relative to other methods, the extent of waste size reduction is less but a fertiliser can be produced. It was found that SWCs proposed process is a step forward towards achieving sustainable development.

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TABLE OF CONTENTS

Executive Summary .......................................................................................................... 3

1.0 Introduction ............................................................................................................... 8 1.1 Aim .................................................................................................................................... 8 1.2 Boundary Conditions .......................................................................................................... 8

2.0 Alternative Technology ............................................................................................... 8

3.0 Process Technical Information .................................................................................. 10 3.1 Trommel and Shredder (U-101) ......................................................................................... 10 3.2 Plate and frame filter (U-103) ............................................................................................ 10 3.3 Flare (U-104) ..................................................................................................................... 10 3.4 Anaerobic DIgester Technical Information (Dranco Process) (R-101) ................................... 10 3.5 Packed Column (V-101) ..................................................................................................... 10 3.6 Flash Drum (U-102) ........................................................................................................... 11 3.7 Combustion Chamber (R-201) ........................................................................................... 11 3.8 Combustion Chamber cooling system ................................................................................ 11 3.9 Gas Turbine (C-202) .......................................................................................................... 11 3.10 Heat Recovery Steam Generator (E-203) .......................................................................... 12 3.11 Steam Turbine (C-203) .................................................................................................... 12 3.12 Condenser (E-203) ........................................................................................................... 12

4.0 Environmental Concerns ........................................................................................... 16 4.1 Occupational health and safety issues/environmental issues ............................................. 16 4.2 Zero Net Emissions ........................................................................................................... 16

4.2.1 Methods of Carbon Offsetting ............................................................................................. 16 4.2.2 General Limitations .............................................................................................................. 16 4.2.3 Offset Plan ............................................................................................................................ 17

5.0 Sustainability metrics ................................................................................................ 18 5.1 Metric Definitions ............................................................................................................. 19 5.2 Qualitative Sustainability Assessment ............................................................................... 20

5.2.1 Limitations ............................................................................................................................ 21

6.0 Process Simulation and Optimisation ........................................................................ 21 6.1 Stage 1 Anaerobic Digestion ........................................................................................... 21 6.2 Stage 2 Gas Cleaning ...................................................................................................... 22 6.3 Stage 3 Power Generation .............................................................................................. 22

7.0 Exergy Analysis ......................................................................................................... 25 7.1 Exergetic Efficiencies ......................................................................................................... 25 7.2 Thermal Efficiency ............................................................................................................ 25

8.0 Economic Analysis .................................................................................................... 26 8.1 Economic Analysis Scope................................................................................................... 26 8.2 Fixed Capital Cost Estimation ............................................................................................ 26 8.3 Operating Costs ................................................................................................................ 27

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8.4 Sales Revenue .................................................................................................................. 28 8.5 Net Present Value ............................................................................................................. 29 8.6 IRR and discounted cash flow rate of return ...................................................................... 30 8.7 Levelised Cost of Electricity ............................................................................................... 30 8.8 Scenarios and Sensitivities ................................................................................................ 30

Case 1: Varying price of MSW ....................................................................................................... 30 Case 2: Varying Electrical production ........................................................................................... 31 Case 3: No Absorption Column ..................................................................................................... 32

Recommendations ................................................................................................................. 33

9.0 Social and Political Drivers ........................................................................................ 34 9.1 A Metrics Based Approach ................................................................................................ 34 9.2 Discussion of Stakeholder Interests ................................................................................... 34

9.2.1 The Brisbane Community ..................................................................................................... 34 9.2.2 Fertiliser Industry ................................................................................................................. 35 9.2.3 The Brisbane City Council ..................................................................................................... 35 9.2.4 The State Government & Federal Government ................................................................... 36

9.3 Smart Metrics for Stakeholder Interests ............................................................................ 37

10.0 Limitations to Sustainable Development ................................................................. 38 10.1 Economic Development .................................................................................................. 38 10.2 Environmental Responsibility .......................................................................................... 38 10.3 Social Progress ................................................................................................................ 38

11.0 Conclusions & recommendations ............................................................................ 39

References ..................................................................................................................... 40

Appendix 1: Table of safety/environmental issues with risk prevention/minimisation actions ........................................................................................................................... 46

Appendix 2: Sustainability .............................................................................................. 48

Appendix 3: anaerobic digestion calculations .................................................................. 51

Appendix 4: Absorber Assumptions & Limitations ........................................................... 60

Appendix 5: Power generation assumptions & limitations .............................................. 61

Appendix 6: Economic Analysis Calculations ................................................................... 62

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TABLE OF TABLES

Table 1: Composition and quantity of Municipal Solid Waste received by the Brisbane City Council ... 8

Table 2: System performance of Loyd Ray Farms from 24/5/11 - 30/6/12 (Duke University 2012) .... 18

Table 3: Definition of metrics ............................................................................................................... 19

Table 4: Definition of output denominators ......................................................................................... 19

Table 5: Summary of metric intensities ................................................................................................ 19

Table 6: Environmental burden for landfill scenario ............................................................................ 19

Table 7: Environmental burden for anaerobic digestion scenario ....................................................... 19

Table 8: Anaerobic Digestion qualitative assessment (Chirico 2010) ................................................... 20

Table 9: Summary of Waste Technologies and their sustainability indicators (Chirico 2010) ............. 20

Table 11: Total Revenue before tax ...................................................................................................... 28

Table 12: MSW Variation NVP IRR values ............................................................................................. 31

Table 13: Comparative results with no absorber section ..................................................................... 33

Table 14 Brisbane City Council goals for waste reduction .................................................................... 35

Table 15 Queensland targets and milestones in waste processing (Queensland Government 2010) . 36

Table 16 summarising the stakeholder opinions using SMART (the descriptions are inferred from discussion in section 1.1) ...................................................................................................................... 37

Table 17: Waste technology sustainability table (Chirico 2010)........................................................... 48

Table 18: Landfill Gas-to-Energy qualitative assessment (Chirico 2010) .............................................. 48

Table 19: Gasification and Pyrolysis qualitative assessment (Chirico 2010) ........................................ 49

Table 20: Plasma Arc Gasification qualitative assessment (Chirico 2010) ............................................ 49

Table 21: Costs of waste management technologies (Chirico 2010) .................................................... 49

Table 22: Indicators for waste management technologies (Chirico 2010) ........................................... 50

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TABLE OF FIGURES

Figure 1: Alternative pathways for conversion of MSW to power ......................................................... 8

Figure 2: The Brayton Cycle Diagram (Feng 2013) ................................................................................ 12

Figure 3: Temperature vs Entropy graph of Rankine Cycle, which the steam turbine follows. (Beardmore 2013) ................................................................................................................................. 12

Figure 4: 2005 emissions from the agricultural sector (National Greenhouse Gas Inventory 2005) ... 17

Figure 5 - Heat Duty vs. Flow Rate of Air .............................................................................................. 23

Figure 6: Power Generation Breakdown for the Plant (Total 53.12MW) ............................................. 24

Figure 7 - Power Consumption Breakdown for the Plant (Total =21.3MW)......................................... 24

Figure 8 - Net Power Production from the plant (Total = 31.8MW) ..................................................... 24

Figure 9 - Process Unit Exergetic Efficiencies and Irreversibilities ........................................................ 25

Figure 10: Capital Cost Breakdown ....................................................................................................... 27

Figure 11: Costs of Operating chart ...................................................................................................... 27

Figure 12: Operating costs over time with inflation ............................................................................. 28

Figure 13: Total Sales Revenue (before tax) fractions .......................................................................... 29

Figure 14: Cumulative Cash Flow over Plant life ................................................................................... 29

Figure 15: Cumulative Cash Flow Diagram Case 1 ................................................................................ 31

Figure 16: Cumulative Cash Flow Case 2 .............................................................................................. 32

Figure 17: Comparative Cash Flow Diagram ......................................................................................... 33

Figure 18 SMART criterion to set objectives (Riley 2010) ..................................................................... 34

Figure 19 - community support for different waste processing technologies (Market Research 2009) .............................................................................................................................................................. 35

Figure 20 Aerobic compost from anaerobic digestate ......................................................................... 35

Figure 21 Waste management pyramid ............................................................................................... 36

Figure 22: Electricity rate prediction as at 2011, using data from previous years (Australia Energy Market Commission 2011) .................................................................................................................... 39

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1.0 INTRODUCTION

1.1 AIM

The objective of this project was to design a waste-to-energy plant for the Brisbane City Council that would be capable of generating 25 MW of electrical power for the city using a feedstock of pre-prepared municipal solid waste (see Table 1).

Sustainable Waste Consulting (SWC) is experienced in providing solutions to these problems and understands that it is not simply an economic problem that requires a technical solution but rather that for a plant of this nature to remain operational after start-up, the solution must also be environmentally and socially sound. This concept of the triple bottom line (economic, environmental and social sustainability) underpinned SWCs approach to the problem.

Table 1: Composition and quantity of Municipal Solid Waste received by the Brisbane City Council

1.2 BOUNDARY CONDITIONS

The boundary conditions imposed by the Brisbane City Council were that the plant must be capable of generating 25 MW of electrical power using a feedstock supplied to the plant that would consist of solid municipal waste. The waste had already been appropriately sorted according to the requirements of the plant. Additionally, the plant must achieve zero net greenhouse gas emissions and any waste heat generated by the plant must be integrated into the neighbouring EcoPark. It should also be noted that it is not completely clear at this stage what waste is actually handled by the Brisbane City Council.

2.0 ALTERNATIVE TECHNOLOGY

When designing this waste to energy system, a literature review was carried out to explore the alternative technologies available. Looking at the feed and the desired output, the following alternative pathways are available:

Figure 1: Alternative pathways for conversion of MSW to power

Generated MSW (2012): 780 925 tonnes1 Component Weight (w/w %)2 Water (w/w %)2

Paper & Cardboard 30.28% 33.50% Green & Food Waste (incl. timber) 41.81% 62.00% Inorganic (e.g. plastic, glass, metal) 27.91% - 1 (State of Waste & Recycling in Queensland 2012) 2(Khouszam 1995)

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There are two main chemical pathways when converting municipal waste - biochemical and thermochemical. The biochemical pathways consist of using bacteria to breakdown organic materials to generate principally carbon dioxide and methane. Typically 50-70% methane is produced, depending on digester conditions and feedstock composition (Rao & Singh 2003) (moist feedstock rich in hydrocarbons is ideal). Bacterial digestion must be carried out in an anaerobic environment, as the bacteria require this condition for optimal methane production. After digestion has completed, the by-products (sludge, acid gases) and methane are separated. The pure methane is then combusted in a gas turbine to produce energy, with the exhaust gas then used to run a steam turbine. The use of two turbines is called a combined cycle (Motuzas 2014).

Thermochemical alternatives are gasification and combustion. Combustion is comparatively the better documented of the two technologies, as it has been in use for a longer period. Thermochemical options work best with feed stream that has a dry feed (Rogoff & Screve 2011).Combustion technology uses oxidizing agents (usually air or O2) to oxidize hydrocarbons within MSW, which is an exothermic reaction, the resultant heat is then captured (Motuzas 2014).

The simplified reaction is as follows:

The feed must be well-mixed and somewhat homogenous before it enters the combustion chamber, where the solid waste is moved along the chamber on grates exposing it to high temperatures (up to 900 degrees Celsius) and oxidizing agents (Rogoff & Screve). As MSW will contain sulfurs and nitrogen constituents, by-products of combustion will contain SOx, NOx along with CO, CO2, H2O, O2 and ash (Motuzas 2014). Whilst clean O2 and H2O can be safely released back into the environment, all other by-products and contaminated process water must be captured and treated to prevent harm to the surrounding environment (especially people in the area). Heat generated by the combustor can then be used to power steam turbines, and produce power. Although combustion processes are utilized widely, for this application it was not chosen for two key reasons: MSW for this system is assumed to be moist and the plant will be placed next to an EcoPark. Combustion processes are not suitable for residential areas as there is a risk of releasing pollutants into the atmosphere. The thermochemical alternative to combustion is gasification. Gasification uses reducing agents in contrast to combustion, (Motuzas 2014) to produce syngas (H2 and CO). In the case of WtE, MSW is heated up and treated with a gasifying agent which results in an exothermic reaction, producing H2, CO, CO2, N2, H2S and tars (Motuzas 2014)

The syngas produced is extremely useful, as it can be used to synthesize useful chemicals such as methanol, ethanol and fertilizers. Since this project requires the output of electricity, the syngas can be used in a combined cycle using H2 as fuel for combustion whilst CO will be converted to CO2 using water, which is then removed from the product (Young 2010).

Flue gas from a gasification unit requires treatment, including a water scrubber for CO to CO2 conversion, an amine scrubber to absorb acid gases and a tar reformer to convert tar to syngas, thereby increasing the syngas yield (Andersson & Nielsen 2012). Gasification units have a variety of heating options such as pyrolysis and plasma arc gasification, which dictate the structure of the unit as well as the pressure and temperature of the operation - however this is out of scope for alternative technologies section, and will require consideration in future development. Although gasification has good prospects, for this particular feed and environment it was not selected. The feed is not ideal for gasification as it will be moist, and gasification runs at extremely high pressures and temperatures, which significantly increases the risk of running such a process in a residential area. Additionally, by-

MSW + Gasifying Agent Products + HEAT

MSW + Oxidiser Products + HEAT

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products such as CO and H2S are extremely dangerous for people and wildlife; therefore gasification was deemed unsuitable for this particular project.

3.0 PROCESS TECHNICAL INFORMATION

The elementary understanding of key flows in the process provides an indication of whether sufficient power can be produced while meeting environmental and social objectives. It also provides a comparison of expected results in later reports when more rigorous mass and energy balances are completed.

3.1 TROMMEL AND SHREDDER (U-101)

The trommel is used for size separation. It consists of a rotating screened cylinder, designed at a specific pore size. The trommel is elevated on one side allowing gravity to assist in the particles travelling down the drum. The shredder reduces the particle size of the municipal waste entering. It needs to be a fairly robust design that can handle multiple feed types. The particle size of the waste leaving the shredder is to be 40mm or smaller.

3.2 PLATE AND FRAME FILTER (U-103)

A plate and frame filter is used to reduce the moisture content of the digestate to approximately only 15% moisture. The filter forces water through the pores of each frame, which allows a cake to form in each hollow frame. The filter cake is then removed through mechanical agitation, scraping or through the use of an air compressor.

3.3 FLARE (U-104)

A flare is implemented for safety purposes in the case of high methane generation. If a safety issue arises which requires the venting of methane, it can be burnt to minimize the damage to the atmosphere. Furthermore, in the case where infrastructure is not upgraded, the flare will be used to burn excess methane.

3.4 ANAEROBIC DIGESTER TECHNICAL INFORMATION (DRANCO PROCESS) (R-101)

The Dry Anaerobic Composting (DRANCO) Process is a high solids content digestion process that has a number of advantages over the conventional process including higher biogas yields, natural mixing (gravity) and the generation of fewer pathogens (Abdullahi 2007).

The purpose of an anaerobic digester is to break down biodegradable waste using microorganisms, in the absence of oxygen. After undergoing four key stages (Hydrolysis, Acidogenesis, Acetogenesis and Methanogenesis) a gas mixture of CO2 and CH4 is produced (Freguia 2013). The overall reactions can be represented by:

CO2 + 4 H2 CH4 + 2H2O

CH3COOH CH4 + CO2 (main reaction)

(Biarnes 2013)

The fresh municipal solid waste (MSW) feed is heated through direct mixing with saturated steam to the necessary digester operating temperature. The fresh feed is then mixed with the digestate (solid residue from the digester) which means no further mixing in the reactor is needed.

3.5 PACKED COLUMN (V-101)

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A packed absorption column is used to transfer carbon dioxide from the anaerobic digester into a pure solvent stream of propylene carbonate (PC). This is a physical absorption process and therefore there are no chemical reactions occurring. PC has a high selectivity and solubility for carbon dioxide, making it an ideal solvent for this application. The stream entering the combustion chamber will now be a higher quality methane gas. An investigation into the ideal packing type to be used and sizing of the column is required. A second or third generation packing will be best suited for application. A research by Chen and Guo compared 38mm Plum Flower Mini Rings (PFMR), Pall Rings, Intalox Saddles and Super Mini Rings for CO2 absorption processes. It was found that Pall rings provided the highest mass transfer for a broad range of flow rates. However the ideal packing was Intalox saddle if an operating flow rate of PC is kept within the range of 40-100 m3/m2h.

3.6 FLASH DRUM (U-102)

A flash drum is used to remove the CO2 from the propylene carbonate mixture. The volatility of CO2 is higher than that of PC, allowing it to be evaporated through flashing while the PC remains in liquid form in the drum. The CO2 stripped PC is recycled and reused. There will still be some CO2 remaining in this stream, resulting in the need for fresh PC entering the process, as well as a purge in the recycle. This will result in no accumulation of CO2 in the absorber, as well as ensuring the purity of the PC remains high.

3.7 COMBUSTION CHAMBER (R-201)

The combustion chamber can be an external unit or integrated into the gas turbine design for smaller scale operations. As this process deals with high flow rates of methane, an external combustion chamber is employed. The use of an external combustion chamber will be easier to maintain also. The combustion chamber is a large well insulated unit operating at high temperatures due to the exothermic energy from the combustion of methane. The unit will consist of refractory surrounding the inner walls to insulate the system. There will also be burners inside the chamber, as an ignition source and compressed atmospheric air entering to provide oxygen for the combustion to occur. This completes the fire triangle as shown below.

The combustion process for CH4 works follows the reaction: CH4+ 2O2 2H2O + CO2 3.8 COMBUSTION CHAMBER COOLING SYSTEM

The combustion chamber is designed to operate at a maximum of 1649C. A cooling jacket is installed around the chamber which has cooling water pumped through it. As the water passes through the jacket, it will vaporize forming steam. A heat recovery unit downstream further heats this steam using the stream exiting the gas turbine. This water is then used in a steam turbine to generate power.

3.9 GAS TURBINE (C-202)

A gas turbine works similarly to steam turbine, except the operating fluid is air that has been heated to high temperatures and raised to high pressures. A gas turbine follows the Brayton Cycle, which consists of four key steps (Compression, Heat Addition, Expansion, Heat Rejection). Compression and heat addition happens at the combustion chamber (Grundfos 2014).

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Figure 3: Temperature vs Entropy graph of Rankine Cycle, which the steam turbine follows. (Beardmore 2013)

Figure 2: The Brayton Cycle Diagram (Feng 2013)

3.10 HEAT RECOVERY STEAM GENERATOR (E-203)

Exhaust gases from the gas turbine (C-202) still contains significant energy, which can be effectively utilized. The air leaving the turbine can be used to vaporise water using an effective heat exchanger. The heat exchanger for this application is known as a Waste Heat Recovery Unit (BCS Incorporated 2008). The heat system has two inflows which are water and hot exhaust air from the turbine. This unit has been designed to also compress the exhaust steam and therefore pressurise it before it enters the steam turbine. The gas stream leaving this system is flue gas.

3.11 STEAM TURBINE (C-203)

Steam turbines are used to convert heat energy into shaft work, which is then ultimately used to produce electrical energy via a generator. As steam passes through the turbine, it rotates a series of blades similar to the gas turbine (Chaibakhsh & Ghaffari 2008). A steam turbine usually consists of three main zones, a high, intermediate and low pressure zone. As steam passes each zone, the pressure reduces as work is produced. After passing through all three zones, the steam leaves the system at a lower pressure than when it entered. If the temperature is maintained when passing through a turbine, the pressure significantly reduces to allow for the expansion. The Steam Turbine follows a non-ideal Rankine cycle pathway, due to non-isentropic pumping and expansion in the turbine, as seen in the figure below.

3.12 CONDENSER (E-203)

The condenser is used to condense the steam exiting the steam turbine. Gases are expensive, difficult and more energy demanding to pump in comparison to liquids. By condensing the steam, the energy required for pumping purposes is significantly lower. Furthermore, by condensing the steam, the cooling water is heated. This heated water is fed to the EcoPark.

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4.0 ENVIRONMENTAL CONCERNS

The population of Brisbane is continually rising and as it rises, so too does the demand for energy and the need for space for municipal waste. Converting municipal waste to energy is an environmentally friendly technique to reduce the stress on land and energy while consuming a readily available waste product of society.

4.1 OCCUPATIONAL HEALTH AND SAFETY ISSUES/ENVIRONMENTAL ISSUES

Operation of the energy generation plant poses risk to both employees and civilians and therefore prevention and extensive research in the possible hazards. The safety procedures applied to ensure occupational health and safety should also account for environmental risks as mishandling could cause environmental disasters. Considering these two issues, operation of units is of particular importance as there are many risks when starting up, in operation and shutting down. There will be a number of anaerobic digesters in the plant, and while in operation, there is an increase in pressure due to the production of biogas.

In order to safely produce this gas, the air within the digesters must first be displaced during start up. Extensive training in operating all units in the plant is recommended for employees so in the event of automatic failures, manual start up and shut down can be done. Appendix 1 summarises the risks and the preventative measures taken to minimize those risks.

4.2 ZERO NET EMISSIONS

In accordance with the project requirements, SWC are committed to a zero-net emissions goal. Despite optimisation of the process and using a source of renewable energy, the process still emits approximately in the order of 154 000 tons/year.

4.2.1 METHODS OF CARBON OFFSETTING

An overview of carbon offsetting is provided to classify and clarify the methods available. Generally, there are three main methods of carbon offsetting; sequestration projects, methane collection and combustion, energy efficiency projects and renewable energy investments. Sequestration projects generally involve reforestation, preservation of current forests and restoration of forests. Methane collection, evidently, is the collection and containment of methane generated by any sources of emittance. Examples of such sources include landfills, animal farms and industrial waste. This is collected and either flared to produce carbon dioxide (25 times less potent than methane) or captured and anaerobically digested to produce useful energy (which also emits carbon dioxide). Energy efficiency projects aim to increase efficiency of companies in any industry, state, companies, buildings etc.

4.2.2 GENERAL LIMITATIONS

Embarking on carbon offsetting is an arduous and complex task as there are criteria the carbon offset must fulfil to ensure permanent and effective offsetting. The three main criteria are; additionality, verification and monitoring, lack of permanence and leakage.

The first criterion to be fulfilled is additionality, meaning that without the company/persons purchasing the offset, the project would not have occurred. The second, verification and monitoring is required by an objective third party. Their role is to verify the offset method by providing quantified and accurate results. Thirdly, permeance is to ensure that the offset is long-term and will not be released in the future. Finally, leakage is an offset project that directly increases greenhouse gas emissions in another area. For example, a forest that is protected from logging results in another forest elsewhere being logged, thereby negating the offset.

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Prior to the investigation into carbon offsetting options, baseline emissions were taken into account. Under the assumption that the municipal waste would have either been incinerated or left in a landfill where it would be released as methane, the current project would generate carbon offset credits as it is producing less greenhouse gases. However, SWC recognises and wants to commit to its moral responsibility.

4.2.3 OFFSET PLAN

Following extensive research, SWC has chosen to fund a renewable energy project as the company believes it is the most effective and accountable form of carbon offsetting. The project consists of implementing a waste-to-energy anaerobic digester to capture the methane from livestock waste. Currently, livestock waste management in Australia typically involves treatment to convert to manure (used for land application such as spreading irrigation). In 2005, the emissions from agriculture totalled to 15.7 per cent of Australias greenhouse gas emissions, amounting to 87.9 MtCO2-e (National Greenhouse Gas Inventory 2005). In the figure below, it can be seen that manure management makes up around 3.4 MtCO2-e and is a significant emissions contributor to the agricultural sector.

Figure 4: 2005 emissions from the agricultural sector (National Greenhouse Gas Inventory 2005)

There are several projects that utilise livestock waste to energy such as Geopower Energy Limited and Duke University have implemented pig effluent digesters and achieved success. Environmentally, these projects provide many benefits, the following were found by Duke University and Biomass Producer:

Stops direct discharges of waste, such as seepages and runoffs Reduction of ammonia emissions Reduction of odours Reduction of disease-transmitting vectors and pathogens Reduction of groundwater and soil contamination from nutrients and heavy metals. Diversification of income sources through waste Conversion of organic nitrogen to useful nitrogen Reduction of waste

The innovative project at the Loyd Ray Farms in North Carolina by Duke University has proven successful, the table below outlines the system performance. The project consisted of an in-ground lined and covered anaerobic digester. Methane from the digestion would be collected under the cover and powered a 65-kW microturbine. The carbon offsets generated from this operation were used to assist Duke Universitys zero gen target by 2024. The electricity generated was used for farm operations. Geopower had a similar set up, but sold the electricity generated to homes.

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Table 2: System performance of Loyd Ray Farms from 24/5/11 - 30/6/12 (Duke University 2012)

System Uptime 62% Biogas Production 8.3 million scf REC Production 367.5 MWh Monthly Average Production 24.5-29 MWh Monthly Average during Best Producing Months (December 2011 February 2012)

44 MWh

Actual Greenhouse Gas Emissions Reductions 2087 MTCO2-e Greenhouse Gas Emissions Reduction Potential 5183 MTCO2-e Climate Action Reserve: Climate Reserve Tonnes (CRT) verified tons

1442 (CRT)

The total turnkey cost was $1.2 million (EPA n.d.) and included the electrical (digester, gas conditioning unit, microturbine) and environmental (aeration basin and jet aeration system) systems. Taking the actual greenhouse gas emission reductions from table 1, SWC estimates implementing this system in a similar sized farm would achieve the same reductions. Since the national agricultural management plan for animal waste is to be converted to manure, this satisfies the legitimacy of the carbon offset. Due to the financial burden, the project satisfies additionality as it would have been a cost that the farmer would not be viable. A third party will be employed to monitor and verify the results in a similar manner to Duke University. The permeance of this project can be seen as the captured methane is destroyed and will not be released at a later time. There may be some issues with leakage but with proper maintenance and quality checks of the HDPE cover (used to capture the methane) will ensure that no leakage occurs.

In terms of the cost to SWC, since the estimated carbon offsets are much greater than what is currently being produced by the plant, a joint venture with another company and government incentives (currently $120 million is being set aside for local governments to utilise for environmental projects). SWC also plans to sell some of the carbon credits generated as a source of revenue whilst continuing to retire carbon credits as an effort to lower the overall global emissions.

5.0 SUSTAINABILITY METRICS

Sustainability underpins the motivation for the proposed municipal waste to energy project. In order to assess this, a sustainability metrics study was conducted. In the assessment, the performance in terms of environmental, economic and social sustainability was identified. The metrics are a guide to highlight where improvements can be made and when conducted over time, provides data for the progress of company. With many sustainable development progress metrics available, SWC chose to use a model that was simple, time effective, and useful. The reason this was chosen was because often measurements which factor in too many components produce incomparable results with other industries or less versatile results (Beaver et al. 2002). A core set of metrics were chosen, with the following five indicators analysed: material intensity, energy intensity, water consumption, toxic emissions, and pollutant emissions. As a general rule, the lower the metric, the more effective the process, however a lot of data was not available and as a consequence, metrics involving societal effects were difficult to determine. A set of qualitative data was incorporated from the Georgia Institute of Technology and is further analysed to provide more understanding.

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5.1 METRIC DEFINITIONS

Table 3: Definition of metrics

Metric Definition Material intensity Mass of material wasted (not converted to required product) per unit

output Environmental Burden Mass of greenhouse gases per unit output

Water consumption Mass of water consumed per unit output

Pollutant emissions Mass of toxic material emitted by process per unit output

Table 4: Definition of output denominators

Output denominators Definition Value

Output product Final product from process 222 850 MWh

Dollars of Revenue Revenue obtained for one kilogram of product $9 600 000

Table 5: Summary of metric intensities

Per MWh of Product Per dollar of Revenue Metric Unit Baseline Metrics Baseline Metrics Efficiency

Material T 3.8 tMSW/MWh 0.089tMSW/$

Water Kg 0.58kg/MWh 0.013kg/$

Pollutants T 0.69tCO2-e/MWh 0.016tCO2-e/$

The water metric calculated took into account that there was a 2% purge each year causing a use of 0.58kg of water for every MWh produced. The intensity of this metric can be improved via further optimisation of the plant to increase the recycle of water. In terms of pollutants, the metric is not expected to change since it would increase due to an increase in municipal waste, which would in turn increase the power produced. Similar to the pollutant metric, the material metric is not expected to change since an increase in municipal waste would correspond to an increase in power produced. However, if there are optimisation options to the process i.e. improvement to operating conditions and units (in line with exergy calculations in section 7), the metric would decrease and result in a more efficient process.

Table 6: Environmental burden for landfill scenario

Substance Potency factor PF Emissions Tonnes EB value = W x PF Carbon dioxide 1 49 196.16 49 196.16 Methane 21 53 295.84 1 119 212.64 Total 1 168 000 tCO2-e/y

Table 7: Environmental burden for anaerobic digestion scenario

Substance Potency factor PF Emissions Tonnes EB value = W x PF Carbon dioxide 1 153 554 153 554 Total 154 000 tCO2-e/y

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It is assumed that if not for the proposed project, the municipal waste would have been sent to a landfill. The tables above demonstrate the significance and importance of the project, stopping the emittance of around 1 014 000 tCO2-e per year. With the projected increases in municipal waste in Brisbane (Queensland Government 2008), it is predicted that this project will increase its offset of greenhouse gases per year.

5.2 QUALITATIVE SUSTAINABILITY ASSESSMENT

From the Georgia Institute of Technology study by Jennifer Chirico, the following represents a qualitative comparison between waste management technologies.

Table 8: Anaerobic Digestion qualitative assessment (Chirico 2010)

Technology Principle Indicators Sustainability Anaerobic Digestion

Futurity

Reduction to landfill Med Recycling rate High Composting

High

Equity Impact on visual, odour, noise, traffic, public health, property value, stigma by nearby community

Med

Public Participation Public support

High

Environment Decrease in emissions Med Decrease in leachate Med Renewable energy potential

High

Economic Capital costs Med Operating costs Med Revenue potential Med Tipping fee Low

Table 9: Summary of Waste Technologies and their sustainability indicators (Chirico 2010)

Waste Technology Futurity Equity Public Participation

Environment Economic

Traditional Waste Technologies

Landfill Low Low Low Low High Recycling Med Med High Med High Composting High High High High High Incineration Low Low Low Low Med Advanced Waste Technologies

Landfill Gas-to-Energy

Low Low Med Med High

Gasification/Pyrolysis Med High Med High Med Plasma Arc Gasification

Med High Med High Med

Mechanical Biological Treatment

High Med High Med Med

By allocating a number for low, medium and high (1,2,3 respectively) located in Appendix 2, table 17, the qualitative assessment is analysed and discussed below.

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From the qualitative assessment, it can be seen that for advanced waste technologies, gasification/pyrolysis, gasification and anaerobic digestion are all sustainably competitive with each other. Landfill gas-to-energy stands as the least sustainable with high land space use and low futurity, however with high economic sustainability and high number of facilities. Table 22 in Appendix 2 show that the emissions for those technologies are all categorised as low. A key difference and reason anaerobic digestion was chosen was the public participation, with favourable perception of the technology from the public. Table 8 also shows that there is high sustainability in terms of recycling rate, composting rate, and renewable energy potential. High public participation is an advantage for getting the project approved without delay due to disagreement from the general public. The social issues for this project are discussed in further detail in section 9. Plasma arc gasification in terms of sustainability may not yet be viable as the number of facilities is low (not well established technology in industry) with the highest average capital cost. As mentioned in section 2, the operating conditions for gasification are extremely high, that combined with the feed provided from BBC therefore justifies choosing anaerobic digestion. The average capital cost and average operating cost of these technologies are shown in appendix 2, table 21, showing anaerobic digestion to have relatively high capital cost and the highest annual operating cost. This shows cause for concern and would be critical for this proposal to be accepted, for that reason, an economic analysis is performed in section 8.

5.2.1 LIMITATIONS

The limitations of these studies are clear due to the lack of data available. The quantitative assessment was not able to be benchmarked with other technologies or plants. Since this is at the scoping stage, there is no plant data for annual performance to determine where improvements can be made. This would need to be further investigated in the later stages of project development with a more extensive feasibility study. The final feasibility study would also include detailed impact to the environment in terms of waste products. The qualitative study provided key differences for the different technologies with some quantitative figures for the costing, however without quantitative figures for social sustainability, it is difficult to justify. The lack of data also meant there were many aspects of sustainability which were not covered; as such the overall sustainability of this project cannot be quantitatively determined.

6.0 PROCESS SIMULATION AND OPTIMISATION

Following the selection of the process, mass and energy balances were performed using a combination of Microsoft Excel and the simulation software ASPEN Plus to provide a greater understanding of where the main mass and energy inventories existed within the plant and to assist in process optimisation. This analysis also provided the basis for the sustainability metrics review and the economic analysis.

6.1 STAGE 1 ANAEROBIC DIGESTION

The first stage of the process requiring mass and energy balances is the anaerobic digestion section. As this section deals with a number of complex solid streams which are difficult to model reliably in ASPEN Plus, it was decided that this subsystem would be modelled in Microsoft Excel, using yield and composition values from literature.

In reality there is likely to be multiple digesters in series. The specifics of this will be determined when the equipment is sized. However, it is assumed that output product compositions and flows in this calculation would still give a good indication of expected flows.

The results of the mass and energy balances are displayed on PFD. The details of the calculations and assumptions are listed in Appendix 3.

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6.2 STAGE 2 GAS CLEANING

The second stage of the process is the biogas cleaning subsystem, which consists of an absorption column (V-101), a flash tank (U-102), a compressor (C-101) and two heat exchangers (E-101 & E-102). Significant process optimisation was performed on this subsystem to minimise operating costs and to maximise the separation rate of carbon dioxide from the biogas. This included the addition of the flash drum, two heat exchangers and a recycle system which did not exist in the original feasibility report. The first heat exchanger (E-102), was added downstream of the biogas compressor (C-101) to cool the biogas from the high temperature of 409OC after it has been compressed to 60 bar down to 20OC before it enters the column, as the absorption process operates much more effectively at lower temperatures. Although this is not shown in this model, this cooling process would be achieved by performing indirect heat exchange with either the column bottoms stream (14) or the CO2 removal stream (15) as both of these streams are at subzero temperatures.

The recycle stream (16) was achieved by adding a flash drum downstream of the column bottoms flow which flashes the high pressure propylene carbonate and carbon dioxide mixture at 1 bar, separating these streams, providing a relatively pure CO2 stream (15) and a clean propylene carbonate stream (16) for recycle back to mix with fresh PC makeup (3) and be heated up to 0OC in the consequent heat exchanger (see Appendix 4 for assumptions).

6.3 STAGE 3 POWER GENERATION

The third stage of the process is the power generation subsystem which consists of a gas cycle and a steam cycle. The gas cycle consists of a combustion chamber (R-201) that combusts the biogas and compressed air to generate hot flue gases that power a gas turbine (C-202). These hot flue gases are then used to vaporise water into steam to power a steam turbine (C-203). A number of process optimisations were implemented in this subsystem to increase efficiency, which maximises the power output of the plant and the amount of heat that can be transferred to the neighbouring EcoPark.

The first major process optimisation was the use of the combustion chamber as the Heat Recovery Steam Generator (HRSG). Upon initially running the simulation, the combustion chamber operated at the adiabatic flame temperature of approximately 2200OC. Whilst this would maximise power output of the gas turbine, it was realised that there are no practical materials that a combustion chamber could be made out of to consistently and safely withstand temperatures of 2200OC. MacAdam et al. (n.d.) suggested that 1649OC was the safe operating temperature of an existing combustion chamber so this value was used. Further literature review suggested that many plants achieve this lower temperature by running excess air through the chamber which will not react and will absorb the excess heat. This in turn increases the power output of the gas turbine due to the increased air flow rate. However, this increase in power output is commensurate with the increase in power input to the compressor to pressurise this excess air, meaning that this option results in a significant energy penalty to the process. Instead, to utilise this heat duty (28.92 MW of heat), a cooling jacket (or similar heat transfer system) will be used to cool the reactor to the desired operating temperature of 1649OC. The cooling jacket will use water from the steam cycle, vaporising it and providing steam. This option results in a significantly reduced energy penalty as the excess heat duty is simply transferred from the gas cycle to the steam cycle and will increase the power output of the steam turbine with only minor increases in power consumption through the pump (D-201).

The next major optimisation was the addition of an extra heat exchanger (E-201) which would provide heat to the pressurised water exiting the pump (D-201) from the flue gases leaving the first heat exchanger (E-202). This provides 13.45 MW of heat that was previously not being utilised.

Another process optimisation included a change to the form in which heat was supplied to the EcoPark. Rather than directly using hot exhaust flue gases for heat transfer to the EcoPark, a two stage heat exchange process was

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developed to transfer this heat. The heat lost from condensing the exhaust steam from the turbine will be used to heat 175 kg/s of water up to 71OC. Following this, a heat exchanger (E-204) on the exhaust flue gases will be used to further heat this water up to 79OC. In total, 43.04MW of heat are supplied to the EcoPark. This is currently in the form of hot water, however, SWC are flexible and are capable of tailoring a solution based on the needs of the Brisbane City Council and the EcoPark.

Other minor process improvements included optimising the flow rate of air into the combustion chamber to maximise the heat duty released by the chamber. The following graph demonstrates that when the air flow rate is below a critical point, the heat duty is less than the maximum and when the air flow rate is greater than this critical point, the heat duty is again less than the maximum:

Figure 5 - Heat Duty vs. Flow Rate of Air

This critical value (approximately 0.92 kmol/s) represents the stoichiometric quantity of air required to react perfectly with all of the methane in the combustion chamber. However, in reality excess air will be required to ensure that only complete combustion occurs. If any parts of the reactor are starved of oxygen, they will undergo incomplete combustion which is detrimental as it results in the production of toxic CO and reduces the efficiency of the process. As such, 10% excess air (1.012 kmol/s) was added based on literature values from (Engineering Toolbox n.d.).

The following two graphs represent the power generation and power consumption breakdowns respectively for the plant on a unit basis: Figure 8 compares the power generation to the power consumption for the plant to generate an overall net power production:

25

26

27

28

29

30

31

32

33

0.8 0.85 0.9 0.95 1 1.05 1.1 1.15

Heat

Dut

y (M

W)

Air Flow Rate (kmol/s)

Combustion Chamber Heat Duty vs. Air Flow Rate

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Figure 7 - Power Consumption Breakdown for the Plant (Total =21.3MW)

Figure 8 - Net Power Production from the plant (Total = 31.8MW)

Figure 6: Power Generation Breakdown for the Plant (Total 53.12MW)

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Power Consumption Breakdown

Air Compressor (C-201)

Biogas Compressor (C-101)

Pump (D-201)

Power Generation Breakdown

Gas Turbine (C-201)

Steam Turbine (C-202)

0

10

20

30

40

50

60

Generation Consumption Net PowerProduction

Pow

er (M

W)

Net Power Production

Steam Turbine

Gas Turbine

Pump

Biogas Compressor

Air Compressor

7.0 EXERGY ANALYSIS

7.1 EXERGETIC EFFICIENCIES

Following the completion of process optimisation and the mass and energy balances, an exergy analysis was performed for each mechanical process unit to quantify their irreversibilities and to determine their exergetic efficiencies. This would provide us with an understanding of how well each unit was performing in terms of extracting or supplying energy to the system. Note that chemical exergy was not considered as part of this analysis, so any process unit with chemical reactions occurring was not considered. The following graph represents both the irreversible work and the exergetic efficiencies of each relevant process unit:

As can be seen from the graph, many of the units have significantly different efficiencies, but the overall effect of the efficiency on the process is negligible as they have relatively small irreversibilities. Most of the units are operating at relatively high efficiencies, with the flash tank being the exception to this, operating at an extremely low exergetic efficiency of 6%. This is due to the fact that a flash tank is designed to throttle the process fluid, simultaneously dropping the pressure and cooling it, which massively reduces its exergy. The gas and steam turbines operate at efficiencies of 80 and 92% respectively, with a combined irreversibility in excess of 10 MW. This is fairly high but unfortunately unavoidable. This could only be reduced by purchasing a more efficient gas turbine, which would increase capital costs and would most likely prove prohibitive.

The HRSG operates at an efficiency of approximately 57%, however, it has a high irreversibility of approximately 10.4 MW. This is for two reasons firstly because the heat being supplied into this heater is extremely large, 28.4 MW, so any loss of efficiency will result in a large irreversibility and secondly because this heat exchanger involves a phase change generating steam from water, which massively increases the entropy of that stream, decreasing the exergy and hence reducing the efficiency of the unit. This also occurs in the condenser, in which the process steam is condensed to water, resulting in a low efficiency and a high irreversibility.

7.2 THERMAL EFFICIENCY

The thermal efficiency of the plant was also calculated using the heating value of the methane that is combusted. Methane is capable of releasing approximately 50 MJ/kg when it is combusted (REFERENCE), meaning that heat is being supplied at almost 74.9 MW. As mentioned earlier, the plant will be generating approximately 31.8 MW of electrical energy, meaning that we will be achieving 42% for our thermal efficiency.

0

2

4

6

8

10

12

0.00

0.20

0.40

0.60

0.80

1.00

Irrev

ersi

bilit

y (M

W)

Exer

getic

Effi

cien

cy

ExergeticEfficiency

Irreversibilities

Figure 9 - Process Unit Exergetic Efficiencies and Irreversibilities

25 | P a g e SUSTAINABILITY WASTE CONSULTANCY // MUNICIPAL WASTE TO ENERGY REPORT

1 = = 31.8 74.9 0.42 This is quite reasonable for a power plant, although somewhat lower than the typical efficiency of a combined cycle power plant. When the 42 MW of low grade heat that is being supplied to the EcoPark is taken into account, the thermal efficiency of the plant is 98%, which is very high.

2 = + = (31.8 + 42) 74.9 0.98 8.0 ECONOMIC ANALYSIS

The sustainability of any processing plant is strongly related to its economic performance. Estimation of a plants economic performance strongly effects whether or not it is considered a worthwhile investment by stakeholders. It is important to keep in mind that this waste-to-energy plant will not be implemented with profit in mind; however it must not run at a negative overall cost which would not be sustainable for rate payers or the council.

Economic performance can be estimated using a variety of different methods; however for this preliminary scoping stage an order-of-magnitude study was conducted. An error of 30-50% can be expected for the values estimated in this study, in comparison to the actual economic performance (Towler & Sinnott 2007). This study is a rough estimate, designed to screen for any issues before moving onto the next phase of project development. This estimate uses similar plant costing and sizing values to scale to the estimated capacities based on the preliminary mass and energy balances.

It is assumed that construction will start in 2019, and will be completed in 2 years. The plant life is estimated to be around 20 years, therefore analysis will be carried from 2019 to 2039.

This analysis will include capital cost estimation (Capex), operating cost estimation (Opex), net present value (NPV), payback period, internal rate of return (IRR) and the levelised cost of energy (LCoE).

8.1 ECONOMIC ANALYSIS SCOPE

The scope of the economic analysis does not include the following:

Trommel and Shredder (U-101) Flare (U-104) Solid Waste Compacter (U-103)

8.2 FIXED CAPITAL COST ESTIMATION

The capital cost was estimated by approximating the cost of equipment, the land cost, contingency, working capital, start-up expenses, indirect expenses, grid connection costs. The equipment costing was done by using correlation factors from various literature sources. See Appendix 6 for a table of unit costing details with information on correlations used. Note that the cost is estimated in different currencies from different years, therefore inflation and conversion factors must be applied.

The Hands factor (Couper 2003) has been applied to most equipment costs as a simple way to account for delivery, installation and construction costs. It has not been applied to the anaerobic digester and the gas turbines, as the six tenths factor scaling method was applied and the reference data used already contained additional costs.

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A land factor of 1.21 (Towler & Sinnott 2007) was applied to all calculated prices to adjust for the Australian market.

See Figure 10 for a graphical cost breakdown. Total calculated cost is $359 549 000. It is evident that the anaerobic digester accounts for more than half of the total capital costs of the project. As capacity increases so does the cost of the anaerobic digester, therefore any increase in the anaerobic digester will have a significant impact on the capital cost. As expected, other expenses which includes any cost which isnt directly related to equipment or land costs.

8.3 OPERATING COSTS

The overall cost of operation in one year is around $37 million. The key expenses are maintenance, plant indirect costs, purged PC and PC. A yearly cost that has not been covered is interest, but this will be addressed in the cash flow analysis. It was assumed that no royalties would be paid on materials, which may have to be revised later in the design phase.These values are estimated in current economic conditions; however it is likely that the cost of raw materials and wages will fluctuate with inflation, as well as other factors. It is difficult to predict fluctuations of each factor, which is a limitation of this estimation. It is however quite simple to predict inflated future prices using the Chemical plant index (Couper 2003). This is an international standard of chemical engineering, provided by Chemical Engineering2010

Figure 11: Costs of Operating chart

Capital Cost Breakdown

Anaerobic Digester (R-101)

Compressors

Packed Column (V-101)

Flash Drum (U-102)

Pump (D-201)

Heat Exchangers

Combine Cycle

Land

Other expenses

Figure 10: Capital Cost Breakdown

Operating Cost Breakdown

PC

Purged PC replacement

Utility Water

Labour

Operating Supplies

Supervision

Payroll Charges

Maintenance

Plant indirect expenses

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Figure 12: Operating costs over time with inflation

35

40

45

50

55

2015 2020 2025 2030 2035 2040

$ M

illio

ns (A

UD)

Years

Operating Costs vs. Time

Operating Costs

The following graph was generated by taking past CPI values from Couper 2003 table 4.5, creating a trend and using those to extrapolate future CPI values. See appendix (6) equation 11 for more detail. The year of the CPI and the year of each respective price must be the same. The operating costs accounting for inflation can be seen on the following figure:

As expected, there will be a steady increase in operating costs in line with inflation. Although this seems to give a good indication of what future costs may look like, more complex factors like interest rates and time value of money is required to examined for the true economic performance of the plant. Before complex analysis can be carried out, yearly revenue must be considered.

8.4 SALES REVENUE It is assumed that the plant operates on 3 sources of income sale of electricity to the grid, waste heat sold to the eco-park and charging for collection of processing of MSW. The following table summarises total yearly sales revenue in 2014 AUD.

Table 10: Total Revenue before tax

Sale Price Annual Income

Methods Assumptions

Electricity $43.1/MWh $12 Million

Constant amount of electricity being sold to the grid, which may not be the case for some areas with peaks and falls in demand.

Wholesale price is assumed to be constant, as the electricity market is very constant. Prices from Towler & Sinnott 2007.

Hot water to Ecopark

$0.19/MWh $73, 000 A constant amount of heat is being sold to the nearby eco-park for a fixed rate.

Hot water tariff from Towler & Sinnott 2007, where 42 MW of heat is constantly produced year round.

MSW take on charge

$100/tonne $89 Million

Costs which would have otherwise gone into placing the waste into the landfill is assumed to be now directed to the plant as revenue.

Towler & Sinnott 2007.

Total Sales Revenue (before Tax)

$101 Million

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As figure 4 demonstrates, the majority of the plant revenue comes from the charge of taking MSW. This makes the plant economically feasible, however it is important to consider that this charge could be venerable to variation depending on policies by the local and state governments.

8.5 NET PRESENT VALUE

Several economic analysis tools are available to quantitatively indicate whether a proposed plant will be profitable. Net present value (NPV) is one of these tools, and amongst the most powerful, and most commonly used by companies. The net present value is the estimated value (in todays dollars) of the project over its lifetime, taking interest and time value of money into account and is therefore discounted. To find the NPV of a project, first the cash flow after tax and the interest rate must be determined. The corporate tax rate is taken to be 34% of yearly gross profits (Couper 2003).

Interest rate was assumed to be a long term fixed rate of 4.65%. It is expected that interest rates for local councils will be favourable, as infrastructure such as this project is expected to benefit the entire community (Towler & Sinnott 2007). Depreciation for cash flow was calculated linearly, simply by dividing the fixed capital cost by the lifetime of the plant (Towler & Sinnott 2007).

The cash flow after tax is simply the gross earning of any one-year after taxes and depreciation, which may be negative before the project breaks even with its capital investment.

Figure 14: Cumulative Cash Flow over Plant life

Figure 13: Total Sales Revenue (before tax) fractions

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The cumulative cash flow rate is represented in figure 4. The Payback Period may be estimated graphically, which indicates payback from 10-11 years after the project is implemented. The faster the payback, the better for the company. The NPV was calculated using equation 12 in appendix 6.

The calculated NPV for the base proposal was around $194.9 million, which is a feasible scenario; as a negative NPV indicates that the investment will never make any return (Towler & Sinnott 2007). Using the NPV, the internal rate of return (IRR) and the Discounted Cash Flow Rate of Return can be calculated.

8.6 IRR AND DISCOUNTED CASH FLOW RATE OF RETURN

IRR and Discounted Cash Flow After tax (DCFROR) are two different names for the same thing. Both refer to the maximum possible interest rate that could be paid on the project, by setting the NPV to zero. If the NPV is zero the project will not make a loss, or a gain. The NPV is calculated by setting equation 10 to equal zero, then using goal seek in excel to approximate the IRR value. The IRR value obtained for this project was 9%, which is under the 12% hurdle rate set by companies when weighing up the risks of investment (Towler & Sinnott 2007). However as the NPV is not running negative, for this project IRR of 9% is deemed acceptable.

8.7 LEVELISED COST OF ELECTRICITY

This analysis tool is a method specific to the energy market, and therefore will indicate whether the project is a competitive option for power generation. The levelised cost of energy (LCoE) is simply the total energy produced over the lifetime of the plant divided by the total cost of the plant over the lifetime. This can be expressed as (Smart 2014):

= --- (13)

Where the capacity of the plant is the total amount of time the plant runs, which is taken at 0.85 for the calculations. The calculated LCoE for this project is 24.7 c/kWh. A literature value for a similar combined cycle natural gas combustion system was found to be 7.5c/kWh (Towler & Sinnott 2007). This result leads to the conclusion that the proposed waste-to-energy plant is not an economically feasible option for energy production alone. However because the plant will serve as a waste mitigation process, this poor LCoE result does not make the proposed plant unfeasible.

8.8 SCENARIOS AND SENSITIVITIES So far the economic analysis has only provided results for a base case, with a fixed price of waste and a fixed system power output. In order to verify how robust the economics of this plant is, a few scenarios will be explored. 1. Varying prices of MSW taking charge, as given values from Towler & Sinnott 2007 gave a range from $72-$140/tonne of MSW. 2. Varying electricity production, from 10% of the current fixed rate. 3. A case with no Absorption column present.

CASE 1: VARYING PRICE OF MSW

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Since so much of the revenue is dependent on the $100/tonne charge on taking the MSW, it is important to consider

the entire range of costs, which may be used if and when the plant is implemented. The cost of waste was varied from $70 to $140 in increments of $10, and the resulting NPV, Cumulative Cash flow and IRR values are as follows: As predicted, the higher the amount charged, the higher the cumulative cash flow is. This diagram shows that the model is quite robust, as even at $70/tonne MSW, a profit is made. The NVP and IRR values showed the same trend, the higher the charge, the better the economics:

Table 11: MSW Variation NVP IRR values

MSW ($/tonne)

70 80 90 100 110 120 130 140

NVP ($ AUD, 2014)

-19 Million

52 Million

123 Million

195 Million

266 Million

337 Million

409 Million

480 Million

IRR 3.3% 5.4% 7.4% 9% 10.8% 12.4% 14% 15.5%

It is key to note that the NVP for $70/tonne is negative, meaning that this investment is not economically feasible. This suggests that if the charge goes too far below $80/tonne, the plant will no longer be profitable. This also suggests that the economics are quite sensitive to the charge on the MSW.

CASE 2: VARYING ELECTRICAL PRODUCTION

Figure 15: Cumulative Cash Flow Diagram Case 1

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This diagram shows very little difference between different values of electrical production. This is because revenue from selling electricity to the grid is a very small part of the income of the plant; therefore minor changes will not affect the overall cash flow.

CASE 3: NO ABSORPTION COLUMN

During the economic analysis it was noted that the PC purchase and disposal was a significant percentage of the annual operating cost. It was noted that since such a high quality natural gas is being produced from the anaerobic digester, gas sweetening was not required for the downstream integrated gas and steam turbine cycle. A simulation within Aspen Plus showed that the power output was within 10% of the base case power output.

In order to determine the economic saving through removing this section, the absorption and associated units (biogas compressor, PC Heat exchanger and flash drum) were removed from capital costs, and PC purchase and disposal were removed from the operating costs. Figure 8 demonstrates that by optimising the process with no absorption achieves an increased profit towards the end of the plants life.

-600

-400

-200

0

200

400

600

0 5 10 15 20

$ M

illio

ns (A

UD,

201

4)

Plant Life (years)

Cumulative Cash Flow (After Tax)

28.6MW

31.8MW

35MW

Figure 16: Cumulative Cash Flow Case 2

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Table 12: Comparative results with no absorber section Analysis Method Original No Absorber Literature Values

Net Present Value (NPV)

$198 Million $268 Million Should be greater than or equal to 0

Payback Period 10.5 years 9.5 years -

Internal Rate of Return (IRR)

9% 11% 12% hurdle value

Levelised Cost of Energy

24c/kWh 19c/kWh 7.5c/kWh

In line with the cumulative cash flow diagram, the results show an improvement in overall economic performance. However the IRR and LCoE values still do not compare with literature values. Another issue that may come up is the composition of the natural gas produced in the anaerobic digester. If the quality is decreased, gas sweetening will be necessary and therefore with optimisation option would be out of the question.

RECOMMENDATIONS

Based on the calculations within the economic analysis, it is recommended that the project can be approved to progress to the next more detailed design phase. This project is economically feasible, however it is not a competitive option as a power plant, and the revenue should be considered an extra rather than an investment. It is recommended that for the next phase, more rigorous sizing and costing are used, to decrease the error. Obtaining closed-source historical plant data would allow for increased precision. Further sensitivity analysis should also be carried out, on a larger number of parameters such as biogas quality, and ability for increased waste capacity in the anaerobic digester in scenario of population increase.

Figure 17: Comparative Cash Flow Diagram

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9.0 SOCIAL AND POLITICAL DRIVERS

The waste to energy project could be judged a success if it achieves a clear set objectives. There are a number of stakeholder perspectives that can be used to evaluate the project; they are complex and dynamic this early in the design. Therefore the objectives evaluated in this section may need to be updated through stakeholder consultation during the life of the project.

9.1 A METRICS BASED APPROACH

The social and political drivers can be assessed using a defined set of metrics. There is a variety of ways to apply a metrics approach. The Business Process Engineering website defines the SMART approach to metrics management (see Figure 12). It is a simple tool but if applied appropriately produces results that can help convert the waste energy project into an actionable plan for results, with clearly defined objectives (Zahorsky 2014).

Figure 18 SMART criterion to set objectives (Riley 2010)

9.2 DISCUSSION OF STAKEHOLDER INTERESTS

9.2.1 THE BRISBANE COMMUNITY

The level of support for the technologies chosen will be an important indication of whether the process will be supported. A survey of the Brisbane region would help assess the level of support the process would have and keep the community informed about developments in waste management. A similar survey was conducted for councils in Western Australia in 20091.

When considering process location the survey found the most popular site was the site of an already established waste processing facility. This site was even more popular than another that was adjacent to industrial processes that could supply excess heat. However respondents said they would reconsider if the site showed significant benefits compared to the preferred site. This provides a positive view for the BCC as there could be room to work on community attitudes to the location so waste heat can be harnessed by situating the plant by the neighbouring EcoPark. When respondents were asked about solutions to improve the environmental performance in waste management they focused exclusively on improvements in recycling and education of households about waste minimisation. This suggests that there needs to be a paradigm shift in community views better recognising that waste processing and resource recovery as an important means by which the environmental impact can be minimised (Market Research 2009).The study also conducted surveys of specific technologies and found a high level of support for anaerobic digestion (see Table 12). The survey also found that the community would go for less efficient process if it had added safety benefits.

1849 participants across the six councils which provided a theoretical sample error of 3.5% at the 95% confidence level

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Figure 19 - community support for different waste processing technologies (Market Research 2009) Technology Level of support Anaerobic Digestion 64% Gasification 59% Pyrolysis 55% Combustion 35%

The survey group specifically highlighted the need for ongoing communication and engagement, this will be especially important as this project would be working on a larger scale than the one surveyed. The results of this survey also agree with similar surveys, for example a survey in 2000 into the Hunter region (Hunter Valley Research Foundation 2000). In summary it found that important objectives for any technology were:

Safety for the community, Minimisation of greenhouse gas emissions, Construction and ongoing operation at minimal cost to ratepayers, Effectiveness in reducing volumes going to landfill (Market Research 2009).

9.2.2 FERTILISER INDUSTRY

The overall reduction in waste sent to landfills presents an opportunity to generate fertiliser by remediating the digestate purged. The fertiliser can be used to protect soils against erosion, inhibit plant disease and promote the growth of crops (Ryan 2010). However, the compost would emit carbon dioxide so further offsetting of this carbon will be needed to achieve zero net emissions.

9.2.3 THE BRISBANE CITY COUNCIL The council has taken waste management quite seriously. It has a zero waste goal. It recognises like the survey in WA that there needs to be a significant behavioural shift within the community (Brisbane City Council 2009). It has set a number of goals in the short to medium term (see Table 13).

Table 13 Brisbane City Council goals for waste reduction

Indicator Actual 2008 Statistics

Target Goal 2013 Goal 2020 Goal 2026

1. Total domestic waste to landfill

380 000t 75%

Initially reduce by 4%

55% 27% 10%

2. Total domestic waste recycled/recovered

128 000t 25%

Increase by 4% 45% 73% 90%

3. Recycled from the domestic waste stream

75 000t Initially increase by 6%

100 000t 150 000t 200 000t

4. Green waste recycled/recovered

47 000t - 100 000t 150 000t 200 000t

5. Recyclables in the general waste bin (domestic)

32% Reduce by 2% 20% 8% 5%

Figure 20 Aerobic compost from anaerobic digestate

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This process will contribute to goals for indicators 1, 2 and 4 in particular. The councils efforts in waste management seem to focus on reducing, reusing and recycling waste given material available on its website. This is justified as national reports showed that Queenslands MSW resource recovery rate was 48%, 3% below the Australian average (Brisbane City Council 2014). Additionally, this focus follows the hierarchy in waste management options with the council prioritising the higher tiers (see Figure 16).

9.2.4 THE STATE GOVERNMENT & FEDERAL GOVERNMENT The state government has tried to waste management by legislating the Waste Reduction and Recycling Act 2011. Following the act the Queensland government drafted Queenslands Waste Reduction and Recycling Strategy which highlights that recovering organic waste a high priority in waste management. This is especially important because Queensland has Australias third lowest resource recovery rate at around 52%, which 8% below the national average. This is likely a result of different factors including:

The absence of a landfill levy (except for a six-month period in 2011/12) Less developed resource recovery infrastructure (Queensland Government 2010).

Queensland currently does not have landfill levy. There is a proposal in Queenslands waste reduction strategy report to introduce a levy. Its strategy states that $120million (within first 4years) of the levy surplus will be dedicated to local governments to better focus on waste management (Queensland Government 2010).

The implementation of infrastructure will be very important, particularly with electricity. For example, the biogas from the Swannbank landfill in Brisbane currently produces more electricity from biogas than the power infrastructure can accept. There is also the potential to supply extra biogas to the EcoPark, but there may be a limit that will adequately meet their needs (Queensland Government 2010). The Federal and Queensland reports in waste management released in 2011 outline similar goals in targets for resource recovery. Table 16 outlines the state governments goals in this area.

Table 14 Queensland targets and milestones in waste processing (Queensland Government 2010)

Target 2008 baseline By 2014 By 2017 By 2020

1. Reduce waste disposal to landfill

- no strategy Reduce by 25% Reduce by 40% Reduce by 50%

4. Increase recycling of regulated waste

30% 35% 40% 45%

5. Increase recycling of MSW Increase recycling of household waste to 150 kg person-1 year-1

23% 64 kg person-1

year-1

50% 80 kg person-1 year-

1

20% 100 kg person-1

year-1

60% 150 kg person-1

year-1

6. Reduce generation of waste

2.4 tonnes person-1 year-1

5% reduction 2.3t person-1 year-1

10% reduction 2.2t person-1 year-1

15% reduction 2.0t person-1 year-1

Proposed process

Council focus

Figure 21 Waste management pyramid

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9.3 SMART METRICS FOR STAKEHOLDER INTERESTS

Table 15 summarising the stakeholder opinions using SMART (the descriptions are inferred from discussion in section 1.1)

SMART

DESCRIPTION

SPECIFIC

The Brisbane Community: for governments to implement a solution that is safe, minimises greenhouse gas emissions, minimises cost to ratepayers, reduces the volume of material landfilled and using a technology that has successful applications elsewhere in the world. They also would like to be informed about developments in this area. Ultimate goal of zero waste. Fertiliser Industry: for governments to recognise the value and pressure on the industry and as a result receive the aerobic compost at minimal cost Environmental Groups: for governments and individuals to invest in technology that minimises greenhouse gases, damage to the soil and air quality. The waste management pyramid would be a good way to design waste management techniques. The Brisbane City Council: to reduce the amount of material landfilled, increase recycling/recovery of domestic and green waste and reduce recyclables in general waste. It overall has a zero waste goal (agrees with waste pyramid) and