Hunts Point Anaerobic Digestion Feasibility Study - NYCEDC

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<ul><li><p>Prepared in Association with: DSM Environmental Services, Inc.and R.S. Lynch &amp; Company </p><p>Report </p><p>Hunts Point Anaerobic Digestion Feasibility Study Prepared for the New York City Economic Development Corporation </p><p>July 2010 </p></li><li><p>Report </p><p>Hunts Point Anaerobic Digestion Feasibility Study Prepared for the New York City Economic Development Corporation </p><p>July 2010 </p><p>Prepared in Association with: DSM Environmental Services, Inc.and R.S. Lynch &amp; Company </p></li><li><p>This report has been prepared for the use of the client for the specific purposes identified in the report. The conclusions, observations and recommendations contained herein attributed to R. W. Beck, Inc. (R. W. Beck) constitute the opinions of R. W. Beck. To the extent that statements, information and opinions provided by the client or others have been used in the preparation of this report, R. W. Beck has relied upon the same to be accurate, and for which no assurances are intended and no representations or warranties are made. R. W. Beck makes no certification and gives no assurances except as explicitly set forth in this report. </p><p> Copyright 2010, R. W. Beck, Inc. All rights reserved. </p></li><li><p>Hunts Point Anaerobic Digestion Feasibility Study New York City Economic Development Corporation </p><p>Table of Contents </p><p>Table of Contents List of Tables List of Figures </p><p>Executive Summary ................................................................................................ES-1 Waste Stream Identification and Characterization ..........................................ES-2Biogas Production ...........................................................................................ES-3Energy Production and Use Options ...............................................................ES-3Facility Site ......................................................................................................ES-4Regulatory Framework and Permitting ...........................................................ES-5Environmental Benefits ...................................................................................ES-6Waste Supply and Disposal Costs ...................................................................ES-6</p><p>Waste Processing Area and Digestion System Cost ..............................ES-7Environmental Attributes ................................................................................ES-8Revenue and Expense Projections ...................................................................ES-8Economic Analysis Results .............................................................................ES-9Specific Financing Arrangements ...................................................................ES-9Sensitivity Analysis .......................................................................................ES-10Financial Feasibility ......................................................................................ES-11Conclusions ...................................................................................................ES-11</p><p>Section 1 INTRODUCTION .................................................................................... 1-1</p><p>Section 2 WASTE STREAM IDENTIFICATION AND CHARACTERIZATION .......................................................................................... 2-1</p><p>Fish Market and Produce Market ...................................................................... 2-1Fish Market .............................................................................................. 2-1Produce Market ........................................................................................ 2-2Produce Market Redevelopment .............................................................. 2-5</p><p>Additional Food Distribution Center Drive Tenants ......................................... 2-5Baldor Specialty Foods, Inc. .................................................................... 2-5Meat Market ............................................................................................. 2-6All Other Food Distribution Center Businesses ....................................... 2-7</p><p>Additional Organic Waste Generated on Hunts Point Peninsula ...................... 2-8Telephone Surveys of Potential Organic Waste Generators on the </p><p>Hunts Point Peninsula .................................................................. 2-8</p></li><li><p> Table of Contents </p><p>iv R. W. Beck </p><p>Sanitation Salvage Estimate of Organic Waste Generation from Hunts Point Food Distribution Companies Beyond FDC Drive ............................................................................................ 2-9</p><p>Composition of Organic Rich Loads from Food Production and Distribution Companies Beyond FDC Drive ............................... 2-9</p><p>Variations in Generation ........................................................................ 2-10Organic Rich Loads from the Metropolitan Transfer Station ......................... 2-11Summary of Organic Rich Waste Generation on the Hunts Point </p><p>Peninsula ................................................................................................ 2-12</p><p>Section 3 ENERGY PRODUCTION ....................................................................... 3-1Biogas Generation ............................................................................................. 3-1Energy Production and Use Options ................................................................. 3-2</p><p>Biogas within the FDC ............................................................................ 3-2Biogas Sale into an Existing Natural Gas Pipeline .................................. 3-3Steam for Use within the FDC ................................................................. 3-4Electricity within the FDC Using Reciprocating Engines ....................... 3-4Electricity to the Grid Using Reciprocating Engines .............................. 3-5Electricity within the FDC Using Gas Turbines ...................................... 3-5Electricity to the Grid Using Gas Turbines ............................................. 3-5Biofuel Production and Sale as a Vehicle Fuel ....................................... 3-6Scenario Screening .................................................................................. 3-6Viability and Strength of the Associated Energy Market ........................ 3-6Potential Environmental Impacts ............................................................. 3-7Regulatory and Institutional Hurdles ....................................................... 3-7Technical Complexity and Degree of Commercialization ...................... 3-8Likelihood of Being the Low Cost Option .............................................. 3-9Screening Analysis Summary .................................................................. 3-9Biogas Sale into an Existing Natural Gas Pipeline ................................ 3-13Electricity to the Grid Using Reciprocating Engines ............................ 3-14Biofuel Sale as a Vehicle Fuel ............................................................... 3-14</p><p>Section 4 SITE PREPARATION ............................................................................. 4-1Interconnections and Site Appropriateness ....................................................... 4-3Site Development Issues ................................................................................... 4-4Extraordinary Costs ........................................................................................... 4-5Waterfront Protection and Flood Mitigation ..................................................... 4-6Effects of Planned Remediation Upon Site Development Costs ..................... 4-7Cost Estimates ................................................................................................... 4-7</p><p>Section 5 REGULATORY FRAMEWORK AND PERMITTING ...................... 5-1Introduction ....................................................................................................... 5-1City Level Environmental Permits .................................................................... 5-1</p><p>City Environmental Quality Review ....................................................... 5-1City Level Solid Waste Permit ................................................................ 5-3City Level Air Permit .............................................................................. 5-3</p></li><li><p> Table of Contents </p><p> R. W. Beck v </p><p>City Level Noise Permit........................................................................... 5-3City Level Wastewater Permit ................................................................. 5-4</p><p>State Level Environmental Permits ................................................................... 5-5Uniform Procedures Act .......................................................................... 5-5State Environmental Quality Review ....................................................... 5-5State Part 360 Solid Waste Permit ........................................................... 5-6State Air Permits ...................................................................................... 5-6State Environmental Justice and Permitting ............................................ 5-7</p><p>State Pollution Discharge Elimination System Permit ...................................... 5-8Multi-Sector General Permit for Stormwater Discharges </p><p>Associated with Industrial Activities ........................................... 5-8General Permit for Stormwater Discharges from Municipal </p><p>Separate Storm Sewer Systems .................................................... 5-9General Permit for Stormwater Discharges from Construction </p><p>Activities .................................................................................... 5-10National Environmental Policy Act ....................................................... 5-10</p><p>Section 6 ENVIRONMENTAL BENEFITS ........................................................... 6-1Introduction ....................................................................................................... 6-1Reduced Truck Traffic ...................................................................................... 6-1Produces Renewable Energy ............................................................................. 6-1Reduced Air Emissions ..................................................................................... 6-2Conserve Landfill Space .................................................................................... 6-2Produces Soil Amendment ................................................................................ 6-2</p><p>Section 7 FINANCIAL FEASIBILITY ................................................................... 7-1Background ........................................................................................................ 7-1Interviews with Potential Waste Suppliers ........................................................ 7-1</p><p>Produce Market ........................................................................................ 7-2Meat Market ............................................................................................. 7-3Fish Market .............................................................................................. 7-4</p><p>Current and Projected Tipping Fees .................................................................. 7-4Projected Future Tipping Fees ................................................................. 7-5</p><p>Assuring a Waste Stream to the AD Facility ..................................................... 7-6Infrastructure Costs ........................................................................................... 7-7</p><p>AD Facility Cost Estimates ...................................................................... 7-7Development Costs .................................................................................. 7-8Extraordinary Site Costs .......................................................................... 7-8Waste Processing Area and Digestion System Cost ................................ 7-8</p><p>Environmental Attributes and Tax Credits ...................................................... 7-11Revenue and Expense Projections ................................................................... 7-12</p><p>Assumptions ........................................................................................... 7-12Operating Parameters ...................................................................................... 7-15Revenue Estimates ........................................................................................... 7-18Expense Estimates ........................................................................................... 7-19Net Cash Flow ................................................................................................. 7-20Economic Analysis Results ............................................................................. 7-22</p></li><li><p> Table of Contents </p><p>vi R. W. Beck </p><p>Other Potential Options ................................................................................... 7-23Specific Financing Arrangements ................................................................... 7-23Sensitivity Analysis ......................................................................................... 7-257.2 Financial Feasibility ............................................................................... 7-29</p><p>Section 8 CONCLUSIONS ....................................................................................... 8-1</p></li><li><p> Table of Contents </p><p> R. W. Beck vii </p><p>List of Tables Table 2-1 Food Distribution Waste Generated Beyond FDC Drive ......................... 2-10Table 2-2 Summary of Organic Rich Waste on the Hunts Point Peninsula.............. 2-13Table 7-1 Capital Costs ............................................................................................. 7-11Table 7-2 Applicability of Financing Features ......................................................... 7-12Table 7-3 General Assumptions ................................................................................ 7-12Table 7-4 Cost and Price Assumptions in 2009 ........................................................ 7-14Table 7-5 Future Year Cost and Price Assumptions ................................................. 7-15Table 7-6 AD Operating Parameters ......................................................................... 7-16Table 7-7 Electricity Production Operating Parameters ........................................... 7-16Table 7-8 Biomethane Production Operating Parameters ......................................... 7-17Table 7-9 Vehicle Fuel Production Operating Parameters ....................................... 7-17Table 7-10 Electricity Production Pro Forma Summary ........................................ 7-20Table 7-11 Biomethane Production - Pro Forma Summary...................................... 7-21Table 7-12 Vehicle Fuel Producti...</p></li></ul>