Glenbard Wastewater AuthorityCombined Heat and Power (CHP) Project Case Study

Christopher Buckley & Eider Alvarez

October 27, 2015

Presenters:

Chris Buckley, P.E., BCEE

B.S. from Marquette University

M.B.A. from DePaulUniversity

Joined B&W in 2010

CHP Projects:

Downers Grove Sanitary District (2011)

Glenbard Wastewater Authority (2015)

Eider Álvarez-Puras, EIT

B.S. in Chemical Engineering– UPV (Spain)

M.S. in EnvironmentalEngineering – IIT – 2013

Joined B&W in 2014

CHP Projects:

Glenbard Wastewater Authority (2015)

DeKalb Sanitary District (2015)

From B&W Wastewater Department - Chicago Office:

Presentation Overview

1. Introduction to Combined Heat and Power (CHP) systems What is it? Why to do it? Things to consider

2. Case Study: Glenbard Wastewater Authority CHP Project

Wastewater Treatment Plant (WWTP) Overview

Scope & Schedule Design Build Costs and Payback Analysis Project Status

3. Summary and Lessons Learned

4. Questions

What is a CHP?

What is a CHP? How does it work?

Stands for Combined Heat and Power, it is a cogeneration system.

At WWTPs, cogeneration means generating electricity to offset electricity purchased and heat to warm digester sludge and/or heat buildings.

The engine can be fueled by: Biogas – generated at the anaerobic digesters in the WWTP – free!

or Natural Gas

CHP systems are more efficient…

… than separated generation of electricity and heat

Why are WWTPs looking into CHP systems?

Sustainable – Towards Zero Net Energy WWTP: Use biogas that otherwise will be flared for good use!

CHP systems are more efficient than conventional separated heat and power generation.

Save Money: Off-set 3rd party electrical and natural gas costs being used for WWTP treatment.

Grant Funding: Simply put, you can get paid to do it! Grant funding available to offset design and construction costs.

Things to Consider

Energy Management (such as CHP) is not always a priority at WWTPs - With current effluent limits becoming more strict, upgrades to the wastewater treatment process is the main priority. Opportunities for energy savings may be overlooked.

Cost Barriers: High capital cost equipment is required:1. CHP Units, 2. Gas Treatment (to protect high cost CHP’s),3. Hot water piping and pumps, 4. Instrumentation and controls, 5. Electrical connections.

Biogas Availability - Not every plant generates enough biogas to run the CHP units exclusively on biogas fuel. Boosting the biogas generation at the plant is possible, if co-digestion is implemented at the WWTP.

Co-digestion = More biogas = More Energy Anaerobic Co-digestion of the sewage sludge with food waste or FOG (Fat, Oil and

Grease) increases the organic loading at the digesters, and therefore, the rate of biogas production.

Implementing a FOG/food waste receiving program yields to more energy production

Downers Grove Sanitary District Digester Data

Case Study: Glenbard Wastewater Authority

Design ADF = 16 MGD HPO AS Process 3,200 KWh/MG Current Biogas

Production = 6,000 to 7,000 CFH

Expect to double biogas (with co-digestion) Future Biogas Production = 12,000 CFH

Currently heating digesters by firing boilers with biogas and natural gas

New CHP Building

Glenbard CHP Project - Origin of Project

Opportunity Money – CHP manufacturer prepared a grant application for the installation of a CHP system at Glenbard WWTP:

1. Grants: ICECF: $250,000 DCEO Grant: $702,000 for design and construction.Total $952,000

2. But……Grant deadlines - Tight schedule! General Design by May 31, 2015

$57,000 Design Grant provided upon submittal. Facility On-Line by May 31, 2016 One Year Operating Confirmation

Glenbard CHP Project - Conceptual Scope of Project

1. Two (2) 380kW CHP Units: To Generate Power & Heat One unit fire with biogas Second unit fire with Natural

Gas until co-digestion in place

2. Gas Treatment Equipment: To Remove Biogas Impurities & Prevent Damage to CHP Units

Moisture/particulate removal Hydrogen Sulfide Filter Siloxane Removal

3. Support Facilities

New Building for Equipment Electrical connections to WWTP

electrical grid Hot water piping connections

to Digester Boilers

32

1

Glenbard CHP Project – Conceptual Payback Per Grant Application,

Project Cost: 2 CHP units (760kW) $ 1,450,000 Gas treatment equipment $ 755,000 Support Facilities $ 660,000 Engineering Cost $ 100,000 Grant Application ($ 952,000)Total $ 2,013,000

Project Savings: Per CHP unit, Electricity = offsets 365 kW x 8640 h/y x $0.06/kW $189,000 Thermal Output = offsets 1.44 MMBTU/h x

1 therm/0.1MMBTU x 8640 h/year x $0.41/therm $ 51,000 Total Annual Savings $240,000

Simple Payback = Capital Cost / Annual Savings = 4 (if both CHP units on biogas) to 8 years (if only one CHP running)

Glenbard CHP Project – How to get it done in time?

The cost, savings and grants made the project very appealing!

However, the grant required the project to be done in 12 months. How could the project get done in time?

Glenbard CHP Project - Barriers to Schedule

Project Delivery Alternative 1 - Traditional Design-Bid-Build (D-B-B)

1. Design Phase: Architect or engineer design produce bids documents, drawings and specifications

2. Bidding Phase: General contractors bid on project.

Competitive bidder: Typically, most competitive bidder gets the project.

3. Construction Phase: Project components installed by sub-contractors. General contractor primarily manages construction

Equipment Procurement: 4 to 6 months and cannot start until Contractor Notice To Proceed.

Total Time to Complete Project: 18 to 24 months

Glenbard CHP Project - Schedule Solution

Project Delivery Alternative 2 - Progressive Design-Build (D-B):

1. Design Partnership: Between Designer and Constructor

Preliminary and Final Design

Equipment selection

2. Construction: Overlaps with Design! Starts before the design is completed.

3. Not True Competitive Bidding

Guaranteed Maximum Price Agreement to Limit Costs & Scope

Including structures, Equipment, Mechanical Piping, Electrical Connections, Fire Protection…

4. Equipment Procurement: Ordered Immediately

Total Time to Complete Project:

10 to 13 months!

Glenbard CHP Project – B&W Design-Build Team

Design-Build Team

DesignConsultants

(Baxter & Woodman)

GeneralContractor

(BollerConstruction)

Electrical Contractor

(Homestead Electrical)

Mechanical Constructor

(DahmeMechanical)

First task performed by the team:

Verify Project Conceptual Cost

Design-Built was the solution for meeting the grant schedule B&W Design-Build Team was selected to execute project

Glenbard CHP Project - Project Cost Reality Check

The Conceptual capital cost was revised by the team:

Updated cost on structures, mechanical items, equipment, engineering fees

Project went from $2.01M ($2.96 w/o grant) to $4.78M ($5.73 w/o grant)

Grant ApplicationProject Cost

RevisedProject Cost

2 CHP units $ 1,450,000 $ 1,667,000

Gas Treatment Equipment

$755,000 $ 851,000

SupportFacilities

$ 660,000 $ 2,590,000

EngineeringCost

$ 100,000 $ 425,000

Reasons for increased cost:

New building, piping and electrical really underestimated.

Engineering costs underestimated.

Glenbard CHP Project – High Project Cost

Client still interested because of the inherent benefit of CHP…but now wary about the TRUE financials for the project.

Again, opportunity project…..NOT required by regulatory.

Ok, Design-Built Team –

1. How do we lower the project costs?

a) Alternative equipment suppliers.

b) Should we install one 360 kW unit and the 2nd one later?

2. What is the TRUE Payback on project? Factor in many additional variables…..reduce ASS-umptions.

Glenbard CHP Project - How To Lower Project Cost?

a) What about different CHP equipment suppliers?

Evaluated four (4) different CHP suppliers and select the most economic. Most major CHP equipment made in Europe - Europe is ahead of

the US in Energy Management

b) Should we install one 360 kW unit and the 2nd one later?

Project Costs were prepared for Two Alternatives: 380 kW CHP system – $ 3.75 M ($4.35 w/o grant)

760 kW CHP system – $ 4.04 M ($4.99 w/o grant)

Why cost not much different with one CHP versus two?

Economies of Scale

Why is a building even necessary?

Glenbard CHP Project - What Is The True Payback?

The Payback = Cost/Savings approach used before was overly simplistic. A REAL payback of the project includes many competing factors.

Glenbard CHP Project – True Payback

Identified the mainfactors impacting the payback:

Developed three major payback scenarios covering a wide range of situations

Best Case Scenario

(Goal)

Middle Case Scenario A & B

(Most-likely scenario)

Worst Case Scenario A & B

(for demonstration purposes)

Project Payback– Payback Scenarios

Scenarios and Sub-Scenario Highlights

• Highest Value of Energy Savings

• Maximize Co-digestion

• Average Annual O&M Costs

• Grant Funded

Best Case Scenario

(Goal)

• Mid Value for Energy Savings

• Average Co-digestion

• Average Annual O&M Costs

• Grant Funded

Middle CaseScenario (Most-likely)

• Low Value of Energy Savings

• Low Co-digestion

• Inflated Annual O&M Costs

• No Grant Funding

Worst Case Scenario

(Demonstration purposes)

• Tech 3 Equipment BaseCase A

• Nissen Equipment BaseCase B

• Tech 3 Equipment BaseCase A

• Nissen Equipment BaseCase B

Project Payback – Most-likely scenario

15.613.6

10.8

19.0

15.6

10.38.8

6.4

0.0

5.0

10.0

15.0

20.0

25.0

30.0

WORST CASE A WORST CASE B MIDDLE CASE A MIDDLE CASE B BEST CASE

year

s

760 kW SYSTEM PAYBACKAt Current Biogas vs. Boosted (incl. FOG) Biogas

Current Biogas Production

Boosted Biogas Production

54.5 45.4

For the most-likely (middle case) scenarios:

The payback ranged from

9 to 10 years with enhanced biogas production (implementation of Co-digestion)

14 to 16 years with current biogas production

With Co-digestion, net savings at Year 20 ranges from $5.5M to $7.4M

Net savings at year 20, end of equipment life cycle (with Boosted Biogas Production)

$220,247 $1,091,747 $5,539,887 $7,376,259 $18,537,484

Project Payback – Findings

760 kW System is installed (2 CHP units) Generates maximum energy and

heat Doubles grant funding

FOG/Co-generation program is implemented for additional biogas generation and tipping fees.

For every scenario, the payback is best when:

Glenbard decided to pursue the 760 kW CHP system and look for FOG suppliers (restaurants, industries, residents…)!

Glenbard CHP Project – Project Progress

1. Preliminary Design - Completed Reviewed Conceptual Design and Grant Applications Revise Building Location (closer to Digesters and

Electrical Building) Preliminary Layouts Alternative Equipment Supplier Options Payback Analysis Maximum Price Proposal Contract

2. Detailed Design & Construction - On-going Equipment Selection and Procurement - Completed. Detailed Building Layout - Completed Equipment Specifications Review - Completed Structural, Mechanical, Electrical, Plumbing, Site, Controls &

Instrumentation Drawings – Partially completed Building Permits – Partially completed Site Preparation and Utilities Excavation/Relocation - Completed Foundation Construction ---Just started!

PROGRESSIVE DESIGN-BUILD

Weekly meetings with

Team and Client

Glenbard CHP Project – Scheduled Milestones

3. Installation (Fall/Winter/Spring 2015 - 2016)

Finalize CHP building shell, roof and site improvements

Install HVAC, plumbing, piping, fire protection and electrical appliances

Receive and install CHP equipment and gas treatment.

Prepare plant’s SCADA system to control new equipment

Start-up and commissioning.

Operations

Facility to be on-line and operating by May 31, 2016!

Glenbard CHP Project – Summary /Lessons Learned

CHP Systems in WWTP – Sustainable Opportunity for Energy Savings

CHP Costs -

High cost for CHP equipment and gas treatment and supporting facilities.

CHP Equipment Selection – Compare manufacturers and specs

Payback – Many factors affects payback and savings

• Boosting the plant biogas production is ESSENTIAL!

• Predicting future electricity and natural gas costs is hard.

• Need to factor in equipment O&M and replacement.

Progressive Design-Build – Can help meet funding deadlines.

GLEWA CHP Project - Questions

Questions

or

comments?

Thank you!

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