&EPA
United States
Environmental Protection
Agency
Municipal Environmental Research
Laboratory
Cincinnati OH 45268
Research and Development
EPA-600/S2-80-178 Feb. 1981
Project Summary
The Cost of Alternative
Flue Gas Desulfurization (FGD)
Sludge Disposal Regulations
A Technical Cost Analysis for the
Utility Industry
Howard L. Rishel
- i ' '• •'•;vyr:r:;;; i-Yoic-cHon Agoncy
* ;"• ry
t
t
To meet the sulfur dioxide emission
limits of the Clean Air Act, some
utilities have turned to flue gas
desulfurization (FGD). Its acceptance
by the industry and the various sludge
treatment and disposal options
available to the industry are described
in this report. Current Federal and
state regulations affecting FGD
sludge disposal are discussed and
placed in a conceptual framework
from which regulatory scenarios are
developed. These scenarios were
applied to the current (1980) and
projected (1985) FGD capacity to
estimate what changes, if any, current
utility operations would need to
achieve compliance. Using the best
available cost data base for these
disposal alternatives, region-specific
cost estimates were developed for 10
model power plants for each of 5
disposal options. Applying each
regulatory scenario, the cost impact
on the utility industry was then
estimated for the 50 different
situations.
This Project Summary was devel-
oped by EPA's Municipal Environ-
mental Research Laboratory, Cincin-
nati. OH, to announce key findings of
-, .':orn Street
>;s 60504
the research project that is fully docu-
mented in a separate report of the
same title (see Project Report order-
ing information at back).
Introduction
The Clean Air Act and its
amendments have prompted the
widespread implementation of wet flue
gas desulfurization (FGD) systems by
utilities in an effort to meet sulfur
dioxide emission limitations. This trend
has been further enhanced by the
current U.S. energy policy favoring the
use of native coal reserves. The end
result is a projected substantial
increase in FGD implementation in the
United States through 1985.
With the use of the predominant
available FGD technologies, large
volumes of by-product sludges
requiring disposal are generated. These
sludges have been and will continue to
be disposed of to land, either to ponds as
a slurry or to landfills as a dry material.
Ponding is currently the most common
method of FGD sludge disposal. Sludge
ponds are typically lined with in situ
soils, although synthetic and imported
natural liners (particularly clay) have
begun to find application. Disposing of
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treated, or dewatered, or both types of
sludge to landfill is rapidly gaining favor
and should account for a majority of
new sludge disposal capacity by the
early 1 980's. FGD sludge landfills are
currently used to dispose of
mechanically dewatered sludge,
dewatered sludge mixed with dry ash,
and chemically stabilized sludge.
The data base established thus far for
FGD sludge indicates a need to regulate
its disposal, primarily because of the
potential for ground water contamin-
ation and land degradation (waste
instability) resulting from the disposal of
large volumes of this material to land. To
date, the states, typically state solid
waste and water quality agencies in a
site-specific permitting process, have
regulated FGD sludge disposal.
The purpose of this project was to
review the cost to utilities of various
approaches to regulating FGD sludge
disposal. These regulatory scenarios
are structured to demonstrate the
incremental cost of increasingly
stringent technical requirements and
are not intended to parallel any
proposed EPA regulations for FGD
sludge disposal.
The Regulation of FGD Sludge
Disposal
Current Federal laws that may affect
future regulation of FGD sludge
disposal include the Resource
Conservation and Recovery Act (RCRA)
of 1976 (PL 94-580), the amendments
of 1977, the Marine Protection,
Research, and Sanctuaries Act of 1 972
(PL 92-532), the Federal Water Pollu-
tion Control Act of 1972 (PL 92-500),
and the Federal Surface Mining Control
and Reclamation Act of 1977 (PL 95-
87) The disposal of FGD sludge is
specifically addressed only in RCRA.
The impact of Federal FGD sludge
disposal regulations on the utility
industry would depend on the severity
of the regulation. Recent research and
current regulatory practice indicate that
ground water protection and the
prevention of permanent land
degradation are the principal environ-
mental concerns when disposing of
FGD sludge. The degree of protection
that is necessary will be specific to each
proposed disposal site.
To assess the cost impact of a range of
regulatory approaches, a set of five
regulatory scenarios was developed.
Beginning with Scenario No 1, each
scenario represents an increasingly
stringent regulation based on (1) added
protection of ground water and (2)
added sludge stability to improve the
potential for site reclamation, or (3) a
universal requirement for sludge
treatment and disposal regardless of
site-specific factors. The five regulatory
scenarios considered are as follows:
No. 1. Federal Advisory--State
Legislation and Enforcement:
Simple permitting, stabiliza-
tion not required and not
commonly used.
No. 2. Federal Advisory--State
Legislation and Enforcement:
Site-specific evaluation with
stabilization sometimes
required.
No. 3: General Federal Legislation--
State Enforcement: Physical
stabilization required; no
ponding
No. 4- Comprehensive Federal
Legislation — State Enforce-
ment upon Approval: Chem-
ical stabilization required in
urban areas.
No. 5: Comprehensive Federal
Legislation and Enforcement--
No State Involvement: Chem-
ical stabilization universally
required; specifications given
for the stabilization technique.
Developments of Model Power
Plants and Associated Sludge
Disposal Costs
An accurate assessment of the cost
effect of each scenario on the utility
industry required knowledge of the cost
of each disposal alternative to each
FGD-equipped plant An approximation
of these cost effects was developed
using a set of 10 model plants,
representing three geographic regions,
four coal types, and urban and rural
locations. For each model plant, capital
cost, annual operating cost, and lifetime
revenue requirements were estimated
for each of six disposal options:
1. Unlined ponding
2. Clay-lined ponding
3. Dry (dewater) and landfill
4 Dravo
5. IUCS
6 Dry (dewater), mix, and landfill
Each of the coal-fired utility genera-
ting plants projected to be on line by
1980 and by 1985 was then assigned to
one of the 10 model plant categories to
produce an approximate industry profile
of waste generating capacity. The pro-
file was subjected to each regulatory
scenario to estimate how each utility
would shift from its preferred disposal
option to its remaining least-cost dis-
posal option under the revised regula-
tory scenario. In this manner, the cost
effect of each utility and to the industry
as a whole were estimated as the
incremental cost of complying with
each successive degree of regulation.
It should be emphasized that this
approach includes only plants that will
be either on line by mid-1980 or those
that will be on line by mid-1985. Al-
though cost impacts were estimated for
the entire remaining life span of each of
these plants, a declining operating
scenario was used in which annual
generation decreases over the life span
of each plant. Thus, the plants in the
1980 group included substantially more
retrofit situations than those for the
predominantly younger, 1985 group of
plants. The result of this shift in group,
composition is a substantial increase in]
total remaining lifetime generation^
even though coal-fired generating^
capacity is expected to increase only
moderately between 1980 and 1985.
Utility Industry Response to
Regulatory Scenarios
In the absence of additional regula-
tory constraints (Scenario No. 1), the
utility industry from a post-1980 per-
spective will be committed to spending
close to $2.6 billion (1980 dollars), and
from a post-1985 perspective over $3.1
billion (1980 dollars), for FGD sludge
disposal. Scenarios No. 2through Bare
expected to add from $18 to $972
million to those future revenue commit-
ments for the post-1980 estimate and
from $35 million to $2.32 billion for the
post-1985 estimate. This relatively
modest increase in future revenue com-
mitments is due to two factors: (1) older
plants using high-technology retrofits
will be 5 years older by 1985, so that
their post-1985 revenue commitments
will be substantially reduced; and (2)
new plants coming on line by 1985 will
have their entire useful life ahead of
them; they will be situated on cheaper,
rural land, and will have selected the
cheaper, nonretrofit disposal options as4
part of their original designs. J
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I
The post-1980 to post-1985 shift to
newer plants (combined with an abso-
lute increase in future coal-fired
generation) allows the average cost per
kilowatt hour (in terms of 1980 dollars)
to decrease The result is that the
average future (1980 dollars) to the
consumer for FGS sludge disposal is
expected to range from 1.017 mills
(Scenario No. 1)to1 400 mills (Scenario
No. 5) per kilowatt hour after 1980, and
from 0759 (Scenario No 1) to 1.321
(Scenario No. 5) mills per kilowatt hour
after 1985. It should be re-emphasized
that these cost estimates do not include
plants coming on line after 1985.
Key Conclusions
In general, more stringent disposal
regulation resulted in (1) lower per unit
capital requirements than those for cur-
rent disposal practices and (2) high life-
time revenue requirements as a result
of higher operating costs (labor and raw
materials in particular).
The industry profile for 1980 shows
that in most cases sludge ponding is
more prevalent in the western U.S. than
in the eastern U.S because of more
favorable site-specific conditions The
cost effect of more stringent regulatory
scenarios (particularly the universal
stabilization requirement) in the West
was proportionately greater than it was
for the Midwest or East.
and remaining plant life span were not
allowed to influence this choice, as they
would in practice.
Another topic of interest is the impor-
tant interrelationship between sludge
disposal costs, electricity rate sched-
ules, subsequent changes in electricity
demand, and the ultimate distribution
(by customer type) of FGD sludge
disposal costs Sludge disposal costs
may be lagged over time and have differ-
ential impacts on various classes of
customers Moreover, demand
elasticity may vary by customer class
Should EPA choose to regulate FGD
sludge disposal specifically on a
national scale, the above-mentioned
interrelationship will be addressed as
part of the economic impact analysis.
The other general area that deserves
additional study is the rapid evolution of
FGD sludge disposal technology in
response to the changing regulatory
climate and its resulting cost impact on
the utility industry Specific areas that
could be enhanced in an update of this
study include:
• Second-generation FGD sludge
disposal technologies
• Trends in FGD
• Updated forecasts of FGD imple-
mentation
• Long-range utility power genera-
tion trends
• Impact of RCRA and Mine Safety
and Health Act (MSHA) on FGD
sludge management
Consideration of the above-named
technical and institutional changes,
combined with a more exact analysis of
disposal economics, would provide a
solid foundation for the economic
impact analysis required in conjunction
with impending new Federal regula-
tions for FGD sludge disposal
t
Recommendations
Research recommendations resulting
from this study may be categorized into
two general areas. (1) incorporating the
diversity of local utility conditions into
the analysis, and (2) updating the
current data base to reflect changes in
the regulatory climate and the evolution
of FGD technologies.
With regard to the first area, the
conceptual nature of this study required
the use of many simplifying assump-
tions. As a result, important local or
plant-specific cost factors were not
accounted for that could significantly
affect the costs projected in this study
In addition to addressing these factors
on a local rather than a regional basis,
any subsequent research embracing
these plant-by-plant variations should
also consider the effects that current
sludge disposal capital investments and
remaining plant lives have on the selec-
tion of either a sludge disposal method
or a compliance strategy for sulfur oxide
control In this study, sunk capital costs
Howard L Ft/she/ is with SCS Engineers, Long Beach, CA 90807.
Donald E. Banning and Oscar W. Albrecht are the EPA Project Officers (see
be low]
The complete report, entitled "The Cost of Alternative Flue Gas Desulfurization
(FGD) Sludge Disposal Regulations," {Order No. PB 81 -118 895; Cost: $ 12.50,
subject to change) will be available only from-
National Technical Information Service
5285 Port Royal Road
Springfield, VA 22161
Telephone: 703-487-4650
The EPA Project Officers can be contacted at:
Municipal Environmental Research Laboratory
U.S. Environmental Protection Agency
Cincinnati, OH 45268
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United States
Environmental Protection
Agency
Center for Environmental Research
Information
Cincinnati OH 45268
Postage and
Fees Paid
Environmental
Protection
Agency
EPA 335
Official Business
Penalty for Private Use $300
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U.S. GOVERNMENT PRINTING OFFICE: 1981—757-064/026
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