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Leeds University C fl 10 th M h 2010 Confluence: 10 th March 2010 Energy and the Water Cycle: Carbon E i i f th Wt Id t Emissions from the Water Industry Strategic Investment towards 2050 Strategic Investment towards 2050 Dr Steve Palmer and Adrian Johnson

Stephen Palmer, MWH

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Page 1: Stephen Palmer, MWH

Leeds UniversityC fl 10th M h 2010Confluence: 10th March 2010

Energy and the Water Cycle: Carbon E i i f th W t I d tEmissions from the Water Industry

Strategic Investment towards 2050Strategic Investment towards 2050Dr Steve Palmer and Adrian Johnson

Page 2: Stephen Palmer, MWH

Presentation outline

• Current and future risks facing the water industry

• The need to shift from developing assets to meetThe need to shift from developing assets to meet drivers to strategic investment in systems to maximise resource efficiencyresource efficiency

• Opportunities

• Wastewater case study example

Page 3: Stephen Palmer, MWH

Legislation, climate change and other pressures demand long‐term visiondemand long term vision

REACTIVE:

Climate change legislationWFD objectivesCapped budgets

VISION

REACTIVE:harder, higher cost

pp gCustomer priorities

VISION:Transformed assets: adapted to climate PLANNED: change and carbon 

efficient;Risks controlled

easier, lowest  costAnticipate future trendsReduce operating cost riskAvoid stranded assetsControl and manage

Climate change impacts/ b

3

Control and manage risks to whole life costs

Rising energy / carbon pricesDemographic & social changes

Page 4: Stephen Palmer, MWH

Particular issues for water industry

• Assets have long livesAssets have long lives

what is built now will serve for decades into the future

• Assets have high write-off costs

stranded assets reduce investment returns and efficiency

• Capital investment needed so assets can accommodate:

energy cost inflation (to ensure operating cost efficiency)

regulatory risksregulatory risks

climate change mitigation

strategic resources risks

… while obtaining value for money

Page 5: Stephen Palmer, MWH

Operating cost risk: Effect of annual power cost inflation on 40yr power costs of a 160 000 pe STWinflation on 40yr power costs of a 160,000 pe STW

From To %inc. per annum Source1979 2007 6 7 BERR

Inflation in UK industrial power 1979 2007 6.7 BERR

1997 2007 3.3 Eurostat2004 2007 11.0 Eurostat

industrial power costs

£30

£35 0.00% 1.00%

2006 2007 18.5 BERR2007 2008 14.2 BERR

£25

£30

ns

2.00% 3.00%

4.00% 5.00%

£15

£20

£ M

illio

n 6.00% 7.00%

8.00% 9.00%

10 00% 11 00%

£5

£10

£ 10.00% 11.00%

£-0 10 20 30 40

Page 6: Stephen Palmer, MWH

Regulatory risks: water environment

Water Framework DirectiveWater Framework Directive• Significant investment to enhance capability

C b t li itl t d f i fi t l• Carbon not explicitly accounted for in first cycle –opportunity lost?

• Inequalities of whole life cost calculation –capex pressures override opex costs

Most water cos forecastMost water cos. forecastsignificant increases inCO2 emissions to meetCO2 emissions to meetwater legislation

Page 7: Stephen Palmer, MWH

Regulatory risks: climate change mitigation

Government target 80% reduction by 2050Government target 80% reduction by 2050 plus interim budgets set by Climate Change Committee 

CRC ffi i h l h d i 2010CRC energy efficiency scheme launched in 2010

• Affects orgs. using more than 6000MWh/yr of electricity

• Power largest element in water co. carbon footprint

Potential increase in• Potential increase in cost of permits from 2013 is significant risk2013 is significant risk

Page 8: Stephen Palmer, MWH

Expectations of future development

“…meet our long term sustainability duties….align with wider policy on GHG reductions…”

OFWAT Climate Change Policy Statement 2008

“The group believes that the Price Review, together with the ongoing work of the WFD, could provide an important impetus to th t t th t it f ll i it lf t t th tthe sector to ensure that it fully equips itself to meet the acute environmental challenge posed by climate change, in the most 

sustainable way possible ”sustainable way possible.

All Party Parliamentary Water Group: The future of the UK Water Sector (2008)Sector (2008)

Page 9: Stephen Palmer, MWH

Strategic resources risks: Phosphorus

• P essential to food productionproduction

• P fertiliser price up 300% in last two yearsin last two years

• ‘Peak’  year predicted to be 2034be 2034

• Government regulation likely: China has placed alikely: China has placed a 135% tariff on P reserves

• P in sewage is recoverable

Peak phosphorus ‘Hubbert’ curve, (based on Cordell, Drangert and  • P in sewage is recoverable 

strategic resourceWhite, 2009)

Page 10: Stephen Palmer, MWH

A new focus on resource efficiency management

Focus on achieving carbon efficiency: minimise the carbon emissions …

per customer served• per customer served• per unit volume conveyed (pumped)• per unit of pollution load removedper unit of pollution load removed

Wherever possible …

Avoid the use of energy and resources Modelling is key

Reduce energy and resource useRecover energy and resourcesReplace existing energy (and resources) with low carbon alternatives

Page 11: Stephen Palmer, MWH

The biggest opportunities are in the early stages

Deliver toachieve OperationProblem Business

model & Solution Deliveryachievesavings

Operationdefinitionmodel & strategy choice Delivery

unity

Opp

ortu

Allow ‘what if’ projects

Page 12: Stephen Palmer, MWH

Wastewater and sludge treatment:Invest in energy efficiency and energy recoveryInvest in energy efficiency and energy recovery

Page 13: Stephen Palmer, MWH

Wastewater and sludge treatment:A new approach to asset developmentA new approach to asset development

For carbon efficiency: Maximise the pollution load removal per kWMaximise on-site renewable energy generationMaximise on site renewable energy generationBuild in the capability for resource recovery

• Upgrade asset standards and guidelines• Adopt a thermodynamic approach to optimise• Adopt a thermodynamic approach to optimise

• Avoid waste … think resource recovery

Page 14: Stephen Palmer, MWH

Energy Efficient Energy Efficient Wastewater Treatment WorksWastewater Treatment Works

Exploit wind resources

CHPCHPEnhanced Digestion

Minimise sludge transport

Gasification

Real Time Control

resources DigestionIncrease Biogas

Production Sewage heat recovery

FOG DigestionFOG Digestion

Enhanced primarytreatment

Reduce Aeration

Costs

Production g y

High Efficiency Aeration Devices

treatment

Energy ManagementPump Drive

Unit Efficiency

Management

Sustainable

RAS RatesReduce

PumpingCosts

Sustainable Buildings

Page 15: Stephen Palmer, MWH

Minimise costs by applying enabling technologies to existing assetstechnologies to existing assets

Chemical

Preliminary treatment

Primary treatment

Aerobic secondary treatment

Final effluent

Real time controlChemical dosing

treatment treatment treatment effluent

Secondary sludgePrimary sludge

FOG removal

sludge

Sludge thickening CHPEnergythickening

Anaerobic

Site export, ROCs

Gas

digestion

Advanced digestion

(MAD l fl )

Dewatering and drying Gasification

Algae growth(MAD plug flow)

Fuel, MAD, Gasifier Class A sludge, P to land Char, SyngasVFAs

Page 16: Stephen Palmer, MWH

Outcomes: process flowsheets capable of energy neutrality and productionneutrality and production

Katri Vala heat pump plant generates multiple MW of energy direct from sewage ffl t f i t t H l i kieffluent for input to Helsinki

district heating

Heat recovery from sewage Enhanced primary treatment

Enhanced Digestion Digested sludge gasification for CHPMaking use of any available subsidies (e.g. ROCs )

Page 17: Stephen Palmer, MWH

Sludge and biogas value chain

1st order 2nd order 3rd order

Heat

1st order treatment e.g.

sludge digestion

2nd order treatment e.g. sludge drying

3rd order treatment e.g.

gasification

Beneficial use of biosolids

Combustion of biogas

On-site processes

Biogas

Heat

Power

Power

biogas processes

Surplus powerSurplus heat

Direct export National gridDistrict heating

Page 18: Stephen Palmer, MWH

Assess options for best value outomes

Enabling factors e.g.

Large site

L tPotential benefits

Large power costs

Local agriculture paying for sludge

Energy/carbon neutral

Class A sludge

P return to landPrimary sludge

Secondary

MAD capacity

Sludge tankering

Possible future N&P

P return to land

Upgrade biogas for use as vehicle fuel or for i j i id

Cost‐benefit analysis of optionsSecondary

sludgePossible future N&P 

consent

Renewable energy i d l ll

injection to gas grid

Export renewable power

Char to land‐carbon 

options

Best value end required locally

ROCs

Policy to reduce C 

sequestration

VFAs and Oils

uses

yfootprint

Page 19: Stephen Palmer, MWH

Municipal Wastewater Case Study

Baseline design for Whole life cost comparison: Conventional plant for approx 160,000PE

Standard preliminary treatmentp yStandard primary treatmentActivated sludge secondary treatment (FBDA)g y ( )Sludge digestion and drying to pelletConventional best practiceConventional best practice(methane used to heat dryer at 90% efficiency and dryer waste heat heats to digesters)y g )

Page 20: Stephen Palmer, MWH

Plant refurbishment: Potential for significant reductions in operating cost and whole life costg

Whole life cost of 160,000PE Conventional Flowsheet versus Sustainably UpratedFlowsheets when power exported and ROCs claimed at 10% power cost inflation

160

180Flowsheets when power exported and ROCs claimed at 10% power cost inflation

Conventional UHT gasifier

120

140Ehcd PSt, Ehcd MAD &UHT gasifier

Natural gas co-fired gasifier

Biogasfi d ifi

Incinerator

80

100

120

ons

co-fired gasifier

Ehcd PSt, Ehcd MAD &Incinerator

60

80

£ M

illio

20

40

00 5 10 15 20 25 30 35 40

Year of Operation after Refurbishment

Page 21: Stephen Palmer, MWH

Plant Refurbishment: Potential for reductions in operating cost and whole life cost without ROCs

Whole life cost of 160,000PE Conventional Flowsheet versus Sustainably Uprated Conventional Flowsheets with no power subsidies at 10% power cost inflation

C ti l

160

180 Conventional

Uprated with UHT Gasifier only

120

140UHT Gasifier only

Uprated with UHT Gasifier &Encd PSTs

80

100

Mill

ions

Uprated with UHT Gasifier Encd MAD

Uprated with UHT Gasifier &PSTs&Encd MAD

40

60

£ M UHT Gasifier &PSTs&Encd MAD

20

40

00 5 10 15 20 25 30 35 40

Year of Operation after Refurbishment

Page 22: Stephen Palmer, MWH

Power Cost Inflation Risk Analysis: Effect on whole life cost of digested sludge incinerationg g

180

Plant upgraded with digested sludge combustion: conventional facility WLC as a function of energy cost inflation versus upgrading options for Incineration with CHP (1 ROC)

160

180

s)

Plus Incinerator with CHP only

Plus Incinerator with CHP; PST and MAD enhancements

120

140

s (£

Mill

ions

Conventional Design

80

100

PV a

t 30Y

rs

40

60

STW

NP

0

20

00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

% Annual Electrical Power Cost Inflation

Page 23: Stephen Palmer, MWH

Power Cost Inflation Risk Analysis: Effect on whole life cost of digested sludge gasificationg g g

180

Plant Upgraded with Digested Sludge Gasification: Conventional Facility WLC versus upgrading options for UHT gasification with CHP (2 ROCs), as a function of energy cost inflation

C ti l D i

140

160

Conventional Design

Conventional uprated with gasifier claiming ROCs

120

140

llion

s)

Conventional with Enhanced PSTs & MADs and Gasifier claiming ROCsConventional with enhnaced PSts and MADs and Gasifiers: NO ROCs

80

100

30Y

rs (£

Mil

40

60

W N

PV

at 3

0

20

STW

00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

% Annual Electrical Power Cost Inflation

Page 24: Stephen Palmer, MWH

A new approach to address risks and maximise operational efficiency for 2050maximise operational efficiency for 2050

• Need a focus on carbon efficiency (systems level) • There are barriers to be addressed to deliver full potentiale e a e ba e s to be add essed to de e u pote t a• Energy efficiency improvements per se are only a small part

of obtaining reductions in operating cost and carbon footprintg p g p• Significant gains offered by in situ power generation on large

sewage works and sludge processing centresBut …• the projects which offer best potential require higher levels

of capital investment and longer payback periods• To effectively mitigate power cost inflation and other risks,

investment in these projects needs to begin now