United States
Environmental Protection
Agency
Office of Solid Waste
and Emergency Response
Washington DC 20460
SW-958
October 19B2
Solid Waste
vvEPA
A Guide to Energy
from Municipal Was
for Small Communitie!
-------
Mention of specific firms in this document does not constitute
endorsement or approval by the U.S. Environmental Protection Agency.
Editing and Technical content of this document were the responsibili-
tiles of the contractor.
-------
530SW958
A GUIDE TO ENERGY FROM MUNICIPAL WASTE
FOR SMALL COMMUNITIES
This publication (SW-958) was prepared by
JRB Associates for the Office of Solid Waste
U.S. Environmental Protection Agency
1982
-------
ACKNOWLEDGEMENTS
This guide was prepared by Dick Richards and Brian Burgher of JRB
Associates for the U.S. Environmental Protection Agency, Office of Solid
Waste, under the Headquarters Technical Assistance Panels Program, EPA
Contract No. 68-01-6000. We would like to acknowledge the valuable assistance
of Llwellyn E. Clark of Vicon Recovery Systems, Inc., and William 0. Wiley of
Consumat Systems, Inc., who reviewed and commented on a draft of this guide.
-------
TABLE OF CONTENTS
Page
1.0 INTRODUCTION 1-1
2.0 REVIEW OF MODULAR INCINERATION 2-1
2.1 Modular Incineration Technology 2-1
2.2 Siting Requirements 2-13
2.3 Recoverable Energy Products 2-15
2.4 Summary 2-17
3.0 PLANNING FOR RESOURCE RECOVERY FEASIBILITY 3-1
3.1 Overview of Phase I Planning 3-2
4.0 DETERMINING FEASIBILITY 4-1
4.1 Establish Planning Area 4-1
4.2 Perform Preliminary Screening 4-2
4.3 Estimate Waste Quantities 4-5
4.4 Evaluate Existing System 4-5
4.5 Identify and Evaluate Markets 4-7
4.6 Perform Preliminary Economic Analysis 4-13
4.7 Make Proceed/Stop Decision 4-27
5.0 PLANNING FOR RESOURCE RECOVERY PROCUREMENT ... THE NEXT STEPS 5-1
5.1 Phase II - Procurement Planning 5-2
5.2 Phase III - Procurement 5-10
APPENDICES
A. Worksheets
B. Potential Energy Market Questionnaire
LIST OF TABLES
2-1 Modular Incinerator Manfuctiirers 2-14
4-1 Percent Annual Change in Consumer Price Index (CPI) 4-21
111
-------
LIST OF FIGURES
Page
2-1 Cross Section of Typical Modular Incinerator Unit 2-6
3-1 Flow Diagram for Resource Recovery Planning for Small
Communities, Phase I - Feasibility Analysis 3-3
5-1 Resource Recovery Planning Model for Small Communities,
Procurement Planning and Procurement 5-3
IV
-------
1.0 INTRODUCTION
Energy recovery is emerging as a viable solid waste management alter-
native for many smaller communities in the United States; however, the imple-
mentation of such projects requires considerable investment in front-end
planning and development, which many municipal officials cannot make while
significant doubts exist as to the suitability of this solid waste management
alternative for their communities. The objective of this guide is to provide
these officials with the means to perform a preliminary assessment of the
feasibility of energy recovery with a minimum amount of effort and cost. Once
the potential of this solid waste management alternative has been established,
officials can proceed with greater assurance that the investment in planning
will be worthwhile. This guide is intended for communities with populations
ranging from approximately 30,000 to 200,000. Community, as used here, refers
to one or more political subdivisions that are sufficiently close together to
consider a combined solid waste disposal system, whether it be resource
recovery or a regional landfill.
The technology discussed in this document is limited to the consideration
of modular incineration, which is generally the most appropriate technology
for small communities. This type of system offers savings in both design and
construction costs through the use of shop-fabricated units that are assembled
onsite. The designs for these incineration and energy recovery units are
essentially off-the-shelf, which considerably reduces original design work.
As a result of these innovations, the capital investment per unit capacity for
these systems is lower than for larger systems.
The remainder of this guide is divided into the following sections:
2.0 Review of Modular Incineration
This section provides a description of modular incineration technology
and a discussion of its capabilities and applications.
3.0 Planning for Resource Recovery Feasibility
The purpose of this section is to provide a brief overview of the
resource recovery planning process plus a more detailed discussion of
the planning activities that comprise a feasibility analysis.
1-1
-------
4.0 Determining Feasibility
In this section, a step-by-step procedure for conducting a preliminary
feasibility analysis is provided, including methodologies and accom-
panying worksheets for completing such key steps as estimating the
quantity of solid waste, evaluating energy markets, estimating capital
and annual costs, and life-cycle cost comparison with alternative
disposal methods.
5.0 Planning, for Resource Recovery Procurement...The Next Steps
This section is included for those communities that, after using this
guide, find that resource recovery is a potentially cost-effective
solid waste management alternative. By discussing the steps that must
be completed before a facility can be constructed, it provides these
communities with guidelines for future planning activities.
1-2
-------
2.0 REVIEW OF MODULAR INCINERATION
Many small communities are experiencing the same solid waste disposal
problems as large metropolitan areas: the adoption of stringent landfill
regulations resulting in higher costs and site closures; high transportation
cost to remote disposal facilities; lack of suitable sites for new facilities;
and public opposition to sanitary landfill sites. Despite these similarities,
alternatives to land disposal - incineration and energy recovery - were not
available ,to small communities until recently. During the past decade, the
development of small-scale technology combined with the increasing value of
energy has created opportunities for small communities to pursue energy
recovery as a solid waste management option.
This guide focuses on modular incineration as this technology is
generally most appropriate for small-scale applications, where solid waste
generation is less than 200-250 TPD; however, it should be noted that, above
150-200 TPD, other technologies involving field-erected systems may merit
consideration, such as waterwall incineration, refractory-lined incineration
with waste-heat boiler, and rotary combustion.
The remainder of this chapter discusses the state-of-the-art of modular
incineration technology (Section 2.1); siting considerations (Section 2.2);
and energy products, including both steam and electricity (Section 2.3).
A more detailed evaluation of the suitability of modular incineration to
satisfy the requirements of the prospective energy customer may be necessary
during later stages of the planning process; however, the guidelines presented
in this chapter are adequate for making a preliminary determination of
feasibility.
2.1 MODULAR INCINERATION TECHNOLOGY
The unique applicability of modular incinerators to solid waste manage-
ment in small communities and the relatively low capital investment required
has spurred their use since the late 1970s. Modular incinerator systems are
2-1
-------
comprised of a number of identical incineration units, each operated
independently. Each unit is made of pre-constructed components such as the
primary chamber, secondary chamber, and heat exchanger, and requires a minimum
of on-site preparation and construction. As a system becomes inadequate to
handle increased waste volumes, additional incinerator units can be integrated
with minimum reconstruction. A system comprised of such independently
operated units allows for flexibility in operation and ease of maintenance:
each unit can be completely isolated from the overall system allowing
operation during unscheduled shutdowns, routine maintenance or reduced energy
demands. A typical system might be one comprised of three modules of 50 TPD
each operating simultaneously in parallel to provide 150 TPD overall capacity.
If one unit requires maintenance, 100 TPD of MSW can still be processed and
steam can still be produced. The operation of such a facility provides a
redundancy uncommon to larger mass-burning systems. Whereas the larger units
must often completely shut down for maintenance problems and discontinue
energy production, modular systems can at least provide a part of the energy
demand. An additional advantage is that the capacity of a system can be
increased at a later date by incorporating additional modular units to meet
increased MSW generation.
Modular incinerators have undergone many design modifications since the
batch-fired models of the 1960s. These early modular combustion units were
used primarily in industrial and commercial applications for volume reduction
of waste materials such as wood, paper, and cardboard. Their batch design
limited operation to processing only the amount of waste that could be
manually charged before firing, followed by a long cool-down period and manual
removal of ash materials. Such operation obviously required long periods of
downtime as well as large manpower requirements. Moreover, these earlier
units did not include eriergy recovery in their design. Their popularity
remained high, however, particularly with the introduction of the Clean Air
Act in 1970. Batch modular units, however inefficient, did provide volume
reduction of waste materials, which greatly reduced landfill disposal and
transportation expenses while achieving compliance with newly instituted
particulate emission limitations.
2-2
-------
The early 1970s saw an increased interest in modular combustion as well
as larger scaled resource recovery technologies. The development of a con-
tinuously operated system with automatic waste charging, stoking, and ash
removal helped stimulate this interest. Twenty-four hour operation was now
possible, increasing the amount of waste that could be processed, minimizing
manpower requirements necessary for manual operation and strengthening eco-
nomic projections of energy recovery. In addition, the availability of land-
fill space was becoming a problem for more communities and the oil shortage of
1973 and 1974 and associated price increases created a new push to develop
alternative energy sources. Waste-to-energy systems quickly became an attrac-
tive solution to both decreasing land disposal space and increasing energy
costs. In 1973, St. Joseph's Hospital of Hot Springs, Arkansas, had installed
the first modular waste-to-energy system for energy recovery from hospital
wastes. In June, 1975, the first energy recovery systems utilizing MSW began
operation in Siloam Springs, Arkansas. Currently, there are 8 operating
modular incinerators, 13 under construction or undergoing modification, and
many in planning stages of development.
The following subsections review modular incineration, beginning with a
discussion of the modular design concept. Each of the system components is
then discussed with more detail to provide the reader with an understanding of
not only an overall modular system, but the workings of each individual part.
2.1.1 Modular Incineration Facility Design/Operation
There are currently many manufacturers of modular incinerators with
slightly different designs and undergoing continuous modification. There are
however, many similarities between the available systems. The following is a
brief description of the operation and design of a typical modular inciner-
ation facility.
Refuse is deposited on the tipping floor of the incinerator facility by
compactor trucks or other vehicles. On the tipping floor, a tractor pushes
2-3
-------
the waste to an automatic feed hopper. For larger modular systems, a storage
pit and loading crane configuration is often employed whereby trucks dump
directly into a refuse storage pit from which crane grapple buckets pick up
refuse and dump it into the feed hopper. The amount of refuse fed is regu-
lated to assure approximately constant burning. Refuse is moved slowly
through the primary combustion chamber by hydraulic rams or conveyors.
Drying, volatilization, and ignition of the waste material occur in the
primary combustion chamber. The secondary combustion chamber or ignition
chamber assures complete burnout of carry-over particulate matter and combus-
tion gases released from the primary chamber.
Modular incinerator design utilizes the controlled air combustion concept
to assure complete combustion of the waste material. Whereas the high air
flows of early uncontrolled incineration units resulted in incomplete combus-
tion and high particulate emissions, the controlled air units regulate the
velocity and volume of air which flows through the combustion chamber, improv-
ing combustion efficiencies and lowering -entrained particles in the discharged
flue gases.
Controlled air incinerators are generally divided into two categories:
starved or substoichiometric air and excess air systems. The starved air
combustion system gets its name from the limited air fed to the primary
combustion chamber. Limiting the air to below the stoichiometric air require-
ments causes partial oxidation of the waste material. The stoichiometric air
requirement is defined as the chemically correct amount of oxgen required for
total material combustion. This lower air input allows for reduced interior
gas velocities and a controlled rate of heat release resulting in low
particulate entrainment to the secondary chamber. The combustion gases, also
called reducing gases, and any unburned carry-over particulates pass to the
secondary chamber where they are mixed with air to the proper air-fuel ratio
for effective combustion. Combustion in the secondary chamber is performed
under excess air.conditions. Typically, the air input to the primary chamber
is 30 to 40 percent of the stoichiometric requirement and in the secondary
2-4
-------
chamber 100 to 150 percent. In the excess air combustion system, air is
supplied to the primary chamber in excess of the stoichiometric requirements.
Typically, the air input is 75 to 150 percent in excess of the required
combustion air.
Heat generated from refuse burning is recovered in the form of steam or
hot water from the high temperature flue gases in a waste heat boiler. From
the waste heat boiler, flue gases are discharged directly through a plant
stack or through an air pollution control device. The inert material from
combustion in the primary chamber is quenched, collected, and removed for
disposal through an ash quench conveyor system.
A cross-section of a typical modular incinerator unit is presented in
Figure 2-1. The following discussions detail each of the system components.
2.1.1.1 Refuse Feed System
Generally, refuse is loaded to the incinerator system using small
tractor-loaders. Operating on the tipping floor, the loading operator pushes
refuse to the feed hopper. The operator is also responsible for removing
bulky items as well as providing a homogeneous feed to the hopper. The amount
of refuse fed is regulated to assure a relatively constant furnace tempera-
ture. This can be done through an automatic display panel with loading
instructions, such as when to load the hopper and how much to load.
After refuse is loaded into the feed hopper, a hydraulic ram pushes it
from the hopper to the primary combustion chamber. A refractory lined door is
used to prevent uncontrolled air from entering the system.
2.1.1.2 Primary Chamber
The primary combustion chamber provides an enclosure in which controlled
refuse combustion occurs. MSW is transferred through the primary chamber
where it is agitated to facilitate contact with air in order to promote highly
effective burn-out of combustibles. Effluent gases consisting of partially
oxidized products (reducing gases) pass with the flue gases into the secondary
2-5
-------
TO BOILER
FOSSIL FUEL BURNER
PRIMARY CHAMBER
FEED RAM
SECONDARY CHAMBER
ASH SUMP
ASH TRANSFER RAMS
AIR TUBE
ASH DISCHARGE RAM
ASH CHUTE
ASH QUENCH
Figure 2-1
Cross Section of Typical
Modular Incinerator Unit
2-6
-------
combustion chamber where the combustion is completed. The non-combustible
portion of the refuse or residue passes through the primary chamber to
ultimate disposal.
Refuse is transferred through the primary chamber slowly to provide
sufficient retention time for combustion. The methods of transfer through the
primary chamber vary, but all are designed to provide sufficient refuse
agitation and air contact to promote highly effective burnout. For example,
one system employs a series of hydraulic rams on progressively lowered levels.
Each continually pushes the waste forward until it falls to the next level,
and eventually into the ash collection system. Traveling grate and conveyer
systems work similarly, providing a slow movement and agitation of waste
through the primary chamber.
The primary combustion chamber is lined with protective refractory
material to confine the heat of combustion and protect the furnace wall.
Refractory materials are cast in the form of bricks or blocks, and held in
place on the furnace walls with high temperature mortars and alloy anchors.
These refractories exhibit physical stability at the extreme operating
temperatures of the combustion process. They must specifically withstand the
compressive forces and mechanical wear from moving refuse, as well as thermal
stresses due to fluctuating temperatures. Refractories are classified and
selected according to key chemical and physical properties including physical
strength, heat resistivity, thermal expansion characteristics, hardness and
chemical resistivity. Those materials in common use include super duty fire-
clays, high aluminas, chrome magnesites, and plastics.
As previously mentioned, the combustion process in the primary chamber is
controlled through the refuse feed rate and the amount of combustion air
injected into the chamber. The rate of combustion is generally maintained
through use of temperature control of combustion air feed. In the starved air
system (reducing atmosphere), an increase in the air/fuel ratio results in an
increase in temperature. An increase in temperature would therefore indicate
a rise in the air/fuel ratio and the air flow would be trimmed to provide the
proper ratio and combustion temperature. In the excess air system (oxidizing
2-7
-------
atmosphere) , an increase in the air flow acts only as a diluent and results in
a reduction of temperature. If a rise in temperature occurred in an excess
air system, the air would be increased to cool the furnace to its proper
temperature and proper combustion air/fuel ratio. Through the temperature
control, the combustion process can be maintained to provide efficient burnout
of combustible materials and low carry-over of particulates to the secondary
chamber.
Auxiliary burners are also part of the primary chambers. During startup,
auxiliary fuel, such as natural gas or fuel oil, is burned until the combus-
tion process can sustain itself exclusively on refuse feed. These burners are
then automatically shut off.
2.1.1.3 Secondary Combustion Chamber
The function of the secondary combustion chamber is to complete the
combustion of the waste stream. Whereas the primary chamber is designed to
burn a major portion of the refuse to a non-combustible residue, the secondary
chamber completes the combustion by burning combustion gases and carry-over
particulates. These gases and suspended particles pass to the secondary
chamber and are mixed with additional air to a proper air-fuel ratio. Burners
in the secondary chamber assure that the combustion process is sustained and
complete burning of remaining combustibles is obtained. It is this combi-
nation between the primary and secondary combustion chambers that provides
both effective destruction of combustible materials and low particulate
emissions.
The secondary combustion chamber is generally constructed on top of the
primary chamber so that gases can flow directly. Like the primary chamber, it
is lined with refractory material to protect the furnace walls. Baffles are
also often employed to promote turbulent mixing which enhances combustion.
Temperature control is also an important inclusion in the secondary
chamber. As in-the primary chamber, the combustion process, and subsequently
the temperature, is regulated through control of the air flow rate. In addi-
tion, an auxiliary burner can provide additional temperature control. By
2-8
-------
carefully controlling the temperature within a rather narrow range, the
combustion process can be maintained and particulate emissions kept to a
minimum.
2.1.1.4 Energy Recovery System
The energy produced from combustion of refuse is recovered as thermal
energy from the flue gases exiting the incinerator unit. These flue gases,
with temperatures of 1,600 to 1,800ฐF, contain useful recoverable energy in
the form of sensible heat. Modular incinerators incorporate a waste heat
boiler (heat exchanger) downstream of the secondary combustion chamber. The
hot flue gases from the secondary chamber pass through the waste heat boiler,
transferring heat to circulating water to produce useful high temperature
water, or more commonly, steam. This steam can be subsequently used for a
variety of purposes, including heating and cooling, and to drive turbines to
produce electricity. Although electricity is a technically feasible energy
recovery operation, it has not to date been applied for modular systems on a
full scale.
The waste heat boiler is a separate integrated unit of the modular incin-
erator system. It consists of a series of rows, or banks, of tubes through
which water and steam flow. Flue gases exiting the secondary chamber are
drawn around the outside of the tube banks by a draft fan, transferring
thermal energy to the water inside the tubes. The water is thus heated to the
desired hot water or steam conditions. In the common case of steam pro-
duction, a steam-water mixture is produced in the boiler tubes. Steam is
separated from the water in a steam separator drum: steam leaving the system
for use by steam market, and water recycled to the boiler with the feedwater
for reheating. The steam after use by the energy buyer may be recirculated as
Steam condensate. This condensate return often results in the reuse of as
/
much as 75 percent of the water used for steam production. Condensate return
provides the benefits of both a reduction in boiler feedwater treatment and
use of remaining heat in steam generation. Condensate return is an important
consideration in system design since long distance piping is expensive.
2-9
-------
The flue gas passing through the waste heat boiler contains a certain
amount of particulate matter. These particulates periodically build up on the
boiler tubes, deterring heat transfer to the circulating water. Waste heat
boilers, therefore, include soot blowers to remove these built-up particu-
lates. These soot blowers can be operated automatically, and consist of a
periodic compressed air flow into the boiler. Regular and thorough soot-
blowing can decisively reduce boiler tube fouling.
Modular incinerator systems also include a dump stack for periods when
the boiler must be bypassed. During normal operation, flue gases are passed
through the waste heat boiler section. However, when steam is not required,
or in the event of a power failure, they can be diverted through the dump
stack directly to the atmosphere. The valving for switching from the boiler
section to the dump stack consists of pneumatically operated guillotine doors.
Where electricity is generated or cogenerated, a turbine/generator is
also included. Single stage turbine/generator sets can produce between 50 and
1500 KW of electricity. These power cycles have taken on many configurations
in other applications but for generation from MSW in small systems, there are
three types for application: 1) single condensing turbine, 2) single back
pressure turbine, and 3) tandem condensing turbine and back pressure turbine.
Each of these systems requires input of high pressure/high temperature steam.
Therefore the energy recovery system would also include a superheater section
to boost pressures and temperatures. Vendors generally recommend maximum
conditions of 600ฐF, 600 psi due to excessive tube corrosion above this point.
The single condensing turbine is applicable to only systems where only
electricity is required. These turbines exhaust steam at an unusable low
pressure, thus only an electricity market can be satisfied.
The single back pressure turbine is applicable to systems where a low
pressure steam is required and electricity can also be used. A back pressure
turbine allows exhaust pressures of up to 200 psi, a usable low pressure
quality steam. In general, a single back pressure turbine should only be used
to supply in-plant electricity requirements in situations where a constant
2-10
-------
steam market is available. The revenues gained by generating and selling the
small quantity of electricity cannot offset the costs associated with boosting
pressures and temperatures to the levels needed for efficient operation of the
turbine.
The most applicable electricity generation system is the tandem
condensing and back-pressure turbines. These systems include a condensing
turbine which exhausts at extremely low pressure and a back-pressure turbine
which exhausts at a market's required steam pressure. When the steam market
demand is at a maximum, the back pressure turbine is used to as much as 100
percent and the condensing turbine used to as little as 0 percent. This
allows for the maximum steam production with some portion of electricity
generated. Alternatively, when the steam demand is down, all (or a large
portion) of the steam can be passed through the condensing turbine for maximum
electricity generation. Such a system allows for flexibility to adapt to a
variable steam demand, while generating as much overall energy as possible.
2.1.1.5 Residue/Ash Handling System
Incineration substantially reduces the volume of wastes which require
disposal. However, even the most efficient incinerator produces solid
residues from combustion. For modular incinerators, volume reductions of
90 percent are common. In the design of incineration facilities, provisions
are made for collecting, handling, and disposing of such solid residues.
Non-combustible solids or "burnt-out" refuse are passed through the
primary chamber by the hydraulic rams or traveling grate system. In the
continuously fed modular incinerator, the residue is continuously pushed
towards the end of the primary chamber where it is eventually pushed into a
quench pit (water sump). After a sufficient residence time to provide cool-
ing, the residue is removed from the quench pit for disposal. This removal
system generally consists of a drag conveyor which moves residue up an incline
to a hopper or refuse container, for periodic disposal at a landfill.
2-11
-------
2.1.1.6 Air Pollution Control System
The controlled air, two chamber combustion process used in modular incin-
erators often precludes the need for air pollution control devices. The
design of such systems is in many cases sufficient to keep particulate
emissions within applicable air quality regulations. However, in some cases
this may not hold true. Depending on the operation of a modular incineration
system and the local air quality regulations, it may be difficult to meet
particulate emission standards during everyday operation. The control of
stack emissions from modular incinerators should therefore be taken into
consideration.
Several air pollution control systems can be applied to modular inciner-
ators. Of course, the most appropriate of these are dependent upon the flue
gas flow rates and temperatures, concentrations and types of particulates in
flue gases, and local applicable air quality regulations. In general, bag-
houses are the most appropriate systems for modular incineration, although
electrostatic precipitators are also acceptable from a technical standpoint
but generally prohibitively expensive for such small-scale applications.
Baghouses consist of a series of woven fabric filter bags. The flue
gases pass through these filter bags which remove particulates from the gas
stream. These filter bags are periodically cleaned by automatic shaking or
reverse pulsing of collected particulates to an ash hopper for disposal. In
the past, baghouses have not found extensive use in incineration applications
due to filter material limitations at high gas temperatures. The development
of new temperature resistant fabrics for baghouse applications have increased
their applicability to incineration.
The electrostatic precipitator (ESP), a very effective particulate
removal device, may be too expensive for modular incinerator use, adding
between 20 and 100 percent to the total initial capital investment. ESPs work
on the principle of electric charges. The basic ESP design consists of a
charging electrode which charges entrained particulate matter, and a series of
2-12
-------
collecting electrode surfaces which collect and hold the charged particles.
These are in turn cleaned by automatic shaking of the collecting electrodes.
A major question concerning the applicability of Federal air quality
standards to modular incinerators remains unanswered. The definition of these
standards is based upon units with capacity greater than 50 TPD. In the case
of modular incinerators, it is not clear whether the 50 TPD limitation is
applicable to each unit's capacity or the combined system capacity which in
general is larger than 50 TPD. In any case, local regulatory restrictions
should be identified and the air pollution control issues considered in a
modular incinerator facility investigation.
2.1,2 Current Modular Incinerator Manufacturers
There are currently many manufacturers of modular incinerators and the
recent upsurge of interest in the small-scale approach to resource recovery
can be expected to result in even more systems being marketed. Although each
system has its own peculiar designs for refuse combustion, many similarities
exist between systems. The discussions presented here have demonstrated the
generic approach to system design.
For more detailed descriptions of individual designs and an analysis of
the differences between each, a small community considering resource recovery
should contact manufacturers directly. Table 2-1 presents the addresses and
phone numbers of the major manufacturers of modular incinerators.
2.2 .SITING REQUIREMENTS
The selection of a suitable site for a waste-to-energy facility is very
important both from an operational and public acceptance standpoint. In fact,
the success of such a facility can hinge upon the availability of a suitable
site. The ultimate selection of a site should be based upon an evaluation of
a variety of criteria including:
Site Accessibility - Roadways to the resource recovery facility must
be available and able to withstand a continual flow of large garbage
handling vehicles without significant disruption of existing traffic
patterns.
2-13
-------
TABLE 2-1 MODULAR INCINERATOR MANUFACTURERS
Basic Environmental Engineering, Inc,
21W161 Hill
Glen Ellyn, IL 60137
312/469-5349
Burn-Zol
P.O. Box 109
Dover, NJ 07801
201/361-5900
C.E. Bartlett-Snow
200 West Monroe
Chicago, IL 60606
312/236-4044
Clean Air, Inc.
P.O. Box 111
Ogden, UT 84402
801/399-9828
Comtro Division
180 Mercer Street
Meadville, PA 16335
814/724-1456
Consumat
P.O. Box 9574
Richmond, VA
804/746-4120
23228
Econo-Therm
1132 K-Tel Drive
Minnetonka, MN 55343
612/938-3100
Environmental Control Products
P.O. Box 15753
Charlotte, NC 28210
704/588-1620
Giery Company, Inc.
P.O. Box 17335
Milwaukee, WI 53217
414/351-0740
Kelley Company, Inc.
6720 N. Teutonia Avenue
Milwaukee, WI 53209
414/352-1000
Lamb-Cargate
P.O. Box 440
1135 Queens Avenue
New Westminster, BC
V3L 4Y7 Canada
604/521-8821
Morse-Boulger
53-09 97th Place
Corona, NY 11368
212/699-5000
Scientific Energy Engineering, Inc,
1103 Blackstone Building
Jacksonville, FL 32202
904/632-2102
Simonds Company
P.O. Drawer 32
Winter Haven, FL 33880
813/293-2171
U.S. Smelting Furnace Company
(Smokatrol)
P.O. Box 217
Belleville, IL 62222
618/233-0129
Vicon Construction Company
Bridgewater Lane
P.O. Box 100
Butler, NJ 07035
800/526-5398
Washburn and Granger
85 Fifth Avenue
Patterson, NJ
201/274-2522
2-14
-------
Proximity to Energy Markets - The nature of the marketed commodity
requires a close location to the buyers. In general, the site should
be adjacent to or, at a maximum, within 1 to 1 1/2 miles of the energy
buyer, to avoid significant losses of energy during transmission. In
addition, it is more difficult to control the quality of the product
delivered to the energy buyer. Moreover, transport over long
distances requires larger initial capital costs for piping, additional
maintenance requirements, and greater pumping requirements for
condensate return. Condensate return is a consideration often over-
looked by resource recovery planners. Generally, through return of
condensate from the steam user, as much as 75 percent of water can be
saved. The condensate return lines are located parallel to the out-
going stream lines, and condensate is pumped back to the resource
recovery unit for reconversion to steam,
Proximity to Disposal Site - Incineration is not an ultimate disposal
method; non-combustible residues will require disposal at a landfill
or ashfill. The resource recovery site should, therefore, be close to
a fill which will accept residual ash.
Proximity to Waste Centroids - The cost of collection and transporta-
tion is sufficiently high to warrant its consideration in locating the
site. A suitable site should be close to central waste generation
locations. Officials should remember that if collection and transpor-
tation costs are restrictive for landfill disposal, they could be
equally restrictive for a resource recovery facility at large
distances from the waste collection area.
2.3 RECOVERABLE ENERGY PRODUCTS
A variety of energy products as well as materials can potentially be
recovered from municipal solid waste. However, for small solid waste loads,
the options for resource recovery are more limited. Economies of scale and
equipment shortcomings contribute to the limitations of small-scale resource
recovery technologies. In general, the energy products, steam and hot water,
should be considered as the prime recoverable commodities for small-scale
systems. Electricity generation and electricity-steam cogeneration may also
be feasible if the right market conditions are available.
Steam is the most common form of energy produced from modular inciner-
ation systems. The marketability of steam stems from its widespread use in
industrial process operations, steam powered machinery, electric generating
turbines, and heating and cooling systems. The steam produced from modular
incinerators can range from 100 to 600 psi and 200 to 700ฐF. This high level
2-15
-------
of flexibility in steam quality and the availability of a variety of potential
markets is the basis for steam's acceptance as a marketable resource recovery
product. Most metropolitan areas can be expected to have major outlets for
steam. Of course, the exact specifications of steam production and the iden-
tification of a suitable steam market is situation specific. These can, how-
ever, be determined through the market survey as discussed in Section 4.5.2.
High temperature water, while not used extensively as an energy source in
the United States, is found extensively in Europe for heating and various
industrial applications. Modular incineration is well suited for production
of hot water for various functions and should be considered by a community in
its search for a suitable recovery energy market.
While steam and hot water are the most marketable energy products from
combustion of MSW, electricity generation can in ideal situations be feasible.
The production of electricity includes as an intermediate step production of
high temperature, high pressure steam necessary to drive a turbine/generator.
Typical temperatures and pressures for this use are 600ฐF, 600 psi. Tempera-
tures above this point can cause rapid super heater tube failure as discussed.
Temperatures and pressures much below this point result in a loss in driving
power and, as a result, a drop in turbine/generator efficiency.
The cogeneration of electricity and steam is an important energy
production option for consideration. Such a system allows flexibility in that
the quantity of steam and/or electricity produced can be adjusted to meet
increased or decreased market demands. Cogeneration typically involves using
high pressure/high temperature steam to generate electricity. The steam
pressure is dropped to a point where it is useful to a steam user (100 to
200 psi). Thus both low pressure steam and electricity are available for
sale. Cogeneration1s most applicable situation is one in which a steam market
is available for only a portion of the total available energy output. Excess
energy can be produced in the form of electricity and revenues obtained
through another market. In situations where the amount of steam required
fluctuates, such as with seasonal variations, more steam can be used for
electricity generation, rather than exhausted with no source of revenue. Thus
2-16
-------
cogeneration has applicability and wide flexibility to meet the requirements
of a market's fluctuating steam demand.
To date, no facilities have been constructed for generation of elec-
tricity from combustion of MSW in modular incinerators. However, it has
experienced increased study and is planned for inclusion in future modular
systems. It should be kept in mind that while the technology is feasible,
it has not been demonstrated on a full scale in the U.S., and should be
subject to very detailed investigation. Nonetheless, electricity generation
should be a consideration of small communities that do not have a suitable
steam market but can assure an adequate electricity market (see discussion in
Section 4.5.2).
2.4 SUMMARY
This section has provided a review of modular incineration technology.
It is intended to provide small communities considering resource recovery with
an understanding of the concept of modular incineration as well as a
familiarity with some of the terms used to describe system components. The
following are the salient points of the section:
Modular incineration is best suited for communities generating between
50 and 250 TPD of refuse or with populations of 30,000 to 150,000 and
has been finding increased use by such small communities.
Modular incinerators consist of integrated pre-constructed units of
standard design which are shop-fabricated and thereby require minimum
on-site construction.
Modular incinerators can easily incorporate redundancy into system
design allowing for operation during shutdowns.
The use of controlled air incineration results in efficient combustion
of waste materials and lowered particulate emissions.
Seventeen modular incinerator manufacturers have been identified for
more details about individual system capabilities.
Steam and hot water are considered the most suitable recoverable
products from small-scale resource recovery technologies.
2-17
-------
Where no steam market is available, or the steam demand of the
proposed market exhibits significant fluctuation, electricity
generation or cogeneration may be applicable provided an electricity
market is available.
2-18
-------
3.0 PLANNING FOR RESOURCE RECOVERY FEASIBILITY
The purpose of this section is to describe briefly the planning process
for resource recovery in order to give local planners an understanding of the
planning elements necessary to ensure effective project implementation.
Basically, the planning process for resource recovery can be divided into
three phases:
Phase I - Feasibility Analysis. This phase includes the comparative
evaluation of solid waste management alternatives, including those
involving resource recovery. This evaluation should be based on well-
defined criteria, not the least of which should be relative cost-
effectiveness. The outcome of this phase should be the identification
of the most viable solid waste management alternative and a decision
to proceed with its development.
Phase II - Procurement Planning. Assuming that a decision is made to
pursue a resource recovery alternative, the first step of Phase II
should be to finalize the project concept, particularly with respect
to the market, site, size, and technology. Subsequently, the specific
details of the selected alternative should be defined, including the
technical configuration of the desired system, the terms of contracts
for waste supply and sale of recovered products (particularly energy);
the selection of the procurement and financing approaches; and final
site selection.
Phase III - Procurement. This phase involves those steps necessary to
solicit for system proposals or bids, to review and select a success-
ful bidder, and to negotiate and sign final contracts. Following
completion of this phase, facility construction can begin.
The remainder of this section will provide a more detailed discussion of
the Phase I planning activities that this guide is designed to assist. For
communities that determine that resource recovery is the most cost-effective
3-1
-------
solid waste disposal alternative, an overview of Phase II and III planning is
included in Section 5.0, "Planning for Resource Recovery Procurement ... the
Next Steps".
3.1 OVERVIEW OF PHASE I PLANNING
As part of this guide, a generalized resource recovery planning model for
small communities has been developed to assist local planners in structuring
their planning efforts to accomplish the steps necessary for project imple-
mentation. A generalized flow diagram for Phase I is shown in Figure 3-1.
The feasibility analysis is perhaps the least complicated of the planning
phases in resource recovery implementation; however, it must be performed
accurately and thoroughly to be of real value. This is particularly important
for the data collection steps: Existing System Analysis, Market Analysis, and
Preliminary Waste Analysis. The quality of the subsequent analysis of
disposal alternatives depends almost entirely on the quality of the input
data.
3.1.1 Establish Planning Area
The first step in the planning process is to determine the area that
should be considered in the plan. This decision should be based on site-
specific considerations and should not be final, as information generated in
the feasibility analysis stage could indicate that the project should serve a
smaller or larger area. Basically, the planning area should be no larger than
that which could be served by a regional landfill and may be limited to a
single political jurisdiction. The area served by an eventual energy recovery
facility will depend on the availability and energy demand of the energy
customer, the solid waste management situation in the various jurisdictions in
the area and their willingness to participate in the project. Although the
implementation of multijurisdictional projects is invariably more complicated
than for one involving a single political entity, economies of scale may
warrant the consideration of a larger facility.
3-2
-------
ง
s
ฃ ฃซ
3 > W
OJ O ฎ
iT O "
.
ซ
I
Q.
2
.2
c
.ฃ
I
.SJ
2
a.
CC
O
>*
ฃ
S2
o>
a
Q
1
LL
3-3
-------
3.1.2 Establish Project Management Structure
At the outset of each phase, it is necessary for the community to
determine how the planning effort is to be managed, specifically:
Who will oversee the effort;
What resources are required; and
When each phase and step should be completed.
This step is particularly important where the planning area being considered
includes more than one political jurisdiction. For Phase I, it will be neces-
sary to appoint a planner or an engineer on the municipal staff to oversee the
use of the guide, from data collection to the preparation of worksheets to the
recommendation on whether to proceed or stop. It may also be necessary to
appoint a committee to review the outputs (particularly in a multijuris-
dictional planning effort). It is envisioned that the resources required for
this Phase will be minimal beyond the time of the person(s) involved in using
the guide. The necessary schedule to complete Phase I will depend on the
following:
Availability of staff to work on the project;
The number of potential energy markets that must be evaluated;
The availability of suitable data on existing disposal practices; and
The detail required for the output of this effort, which could range
from an oral presentation to the appropriate decisionmaking body to a
comprehensive written report.
3.1.3 Perform Preliminary Screening
This step is suggested to prevent the unnecessary waste of time involved
in using the guide where resource recovery is clearly not an appropriate solid
waste management option. It involves the use of the criteria outlined in
Section 4.2 to make a subjective assessment of the suitability of resource
recovery as a solid waste management alternative for the community.
3-4
-------
3.1.4 Evaluate Existing System
This step should be performed concurrently with the other data collection
steps, Identification and Evaluation of Market and Performance of Preliminary
Waste Analysis. Ideally, this guide should be used at a time when a commu-
nity's landfill requirements are being assessed. In this way, up-to-date cost
estimates for landfill will be available. If this is not the case then it
will be necessary to collect the data to permit cost estimates to be made.
This data should include:
Remaining capacity at existing landfill(s);
Cost estimates for upgrading existing landfills;
Location of suitable sites (if new site is required); and
Existing landfill budget.
3.1.5 Identify and Evaluate Markets
The identification and evaluation of potential markets is a critical step
in determining the feasibility of resource recovery. Without a suitable
purchaser of energy who is willing to work with the community to implement a
system, the project simply has no future.
This step should involve interviews with potential markets to ascertain
their technical requirements and the prices they would be willing to pay for
energy, as well as their interest in purchasing recovered energy. A written
statement of its position on these points (Letter of Interest) should be
solicited from each potential market.
Markets for materials recovered from solid waste are less critical to
project success and need not be considered at this stage; however, no revenues
for the sale of materials should be included in the economic analysis unless
preliminary market investigations have been performed.
3.1.6 Estimate Waste Quantities
A preliminary assessment of the quantity of waste available for process-
ing is essential for determining the necessary capacity for the resource
3-5
-------
recovery facility and the amount of energy that will be available for sale.
This guide provides a methodology for estimating solid waste quantities based
on a per capita generation rate. Although this method will suffice for the
purpose of determining feasibility, a more precise waste analysis involving
the actual weighing of refuse is required in Phase II. If a more accurate
method for estimating waste quantity is available, such as utilizing weighing
data at the current landfill, it should be substituted for the estimate based
on a per capita generation rate.
3.1.7 Perform Preliminary Economic Analysis
This step is the centerpiece of Phase I. Solid waste management alter-
natives for the community should be identified based on the data collected in
the previous steps. These alternatives should include a land disposal alter-
native and at least one resource recovery alternative. The cost-effectiveness
of these alternatives should be compared using life-cycle cost analysis over a
planning period of 15-20 years.
3.1.8 Initiate Public Participation Plan
It is essential to involve the public throughout in order to ensure that
its concerns about the project are identified early and addressed. If these
concerns are ignored, they can easily become blown out of proportion, and the
resulting public opposition can seriously jeopardize the project. It is
advisable to keep the public well informed of planning activities and
decisions as they occur. This can be done through newsletters, press
releases, and other local media coverage.
Perhaps the most useful vehicle for public participation is the public
meeting. A well advertised public meeting will attract those members of the
public whose support is necessary for the success of the project. It is
useful to hold these meetings at points in the planning process where infor-
mation has been developed for making a decision that has not yet been
finalized. Thus, the public will perceive that it is being listened to and
not presented with a "fait accompli".
3-6
-------
In Phase I, public meetings can be held at two such decision points as
indicated in model planning program flow charts (Figure 3-1):
Following data collection activities associated with the existing
system, market and preliminary waste analyses, and prior to selection
of disposal alternatives for further evaluation; and
Following the analysis of the selected disposal alternatives and prior
to the proceed/stop decision that concludes Phase I.
3-7
-------
4.0 DETERMINING FEASIBILITY
In this chapter, the step-by-step procedure for conducting a preliminary
feasibility analysis for energy recovery is presented. The objective is to
lead the user of this guide through the planning steps discussed in the
previous chapter in such a way that one or more potentially viable resource
recovery alternatives are identified and that the information necessary to
evaluate these alternatives, and compare them to sanitary landfilling, is
generated. To facilitate this process, a series of worksheets have been
developed and are included as Appendix A. These worksheets should be used in
conjunction with the discussion of the appropriate planning step in this
chapter.
4.1 ESTABLISH PLANNING AREA
The planning area which should be considered when using this guide will
depend on a number of site specific criteria and it may not be possible to
make a final decision at this point in the planning process. These criteria
include:
Demography/geography of the area;
Waste generation;
Location/demand of energy customers;
Current solid waste management situation of each political
jurisdiction in the area; and
Success/failure of previous cooperative efforts between these
political jurisdictions.
If a decision as to the size of the area which should be considered is
not obvious, it may be worthwhile to postpone it. In this case, data should
be collected from an extended area (particularly with respect to energy
markets and waste quantities), and systems of varying sizes to serve a varying
number of political jurisdictions can be identified and evaluated.
4-1
-------
4.2 PERFORM PRELIMINARY SCREENING
There is a set of basic conditions that must exist in order for a
resource recovery project to be successful. Without these conditions, a
community will waste both its time and resources by continuing with a resource
recovery feasibility analysis. These conditions include:
The lack of environmentally acceptable and/or cost-effective land
disposal capacity;
A sufficient supply of MSW available for processing (at least 50-75
TPD);
A suitable energy market; and
Public interest in, and support for, resource recovery.
In order to provide a preliminary assessment of the potential for
resource recovery, it is necessary to briefly review the community's current
disposal practices, the quantity of waste generated, and the availability of
possible energy markets, and to assess the probable public interest in such a
project.
The following subsections describe in detail the basic conditions neces-
sary for resource recovery. Community officials should carefully compare
their specific situations with these screening criteria before proceeding with
a feasibility analysis.
4.2.1 Current Disposal Practices
In general, resource recovery will not be economically feasible in a
community which has sufficient landfill capacity. Reasons for examining
feasibility should include:
Less than 5-10 years remaining capacity at existing landfill and
anticipated difficulty in locating a suitable new site;
Environmental problems at existing site that would be costly to
remedy; and
High transportation costs for disposal at a remote site.
4-2
-------
Unless one or more of the above conditions exist, a landfill will be the most
cost-effective alternative in almost every case.
Communities should place a high priority on the conservation of existing
landfill capacity. The volume reduction resulting from incineration (up to
95 percent) is a major benefit of energy recovery since the life of a landfill
can be increased by several times when its use is limited to the disposal of
incineration residue and unprocessable waste. Although this benefit is
difficult to quantify, it should be considered, at least in a qualitative
manner, when assessing the feasibility of resource recovery.
4.2.2 Waste Supply
It is essential that any waste-to-energy facility be guaranteed a suffi-
cient supply of solid waste so that revenues from tipping fees and energy
sales will meet expectations; therefore, it is important to:
Accurately estimate the quantity of waste available for processing;
and
Establish control or ownership of that waste.
A population of at least 30,000 is required to support an energy recovery
facility, based on a 50-60 TPD minimum system size and an average waste
generation rate of 1000 pounds (0.5 tons) per capita per year. If this guide
shows energy recovery to be feasible for a community, it may be necessary to
perform a more detailed assessment of waste quantities.
A very important issue in developing a resource recovery project is the
control of the waste stream, i.e. assuring the delivery of a sufficient
quantity to the facility throughout its planned life. For the purpose of this
screening procedure, the ability to obtain waste stream control will be
assumed; however, a site-specific assessment of this issue is essential in
subsequent planning efforts.
4-3
-------
4.2.3 Energy Market
The availability of a secure, long-term market for the energy recovered
from MSW is essential to the economic success of a waste-to-energy project and
to justify the initial capital expenditure incurred.
The most suitable energy products using small-scale technology are low
pressure steam and high temperature water. The generation of electricity
using small modular combustion systems is technically feasible; however, due
to the low conversion efficiency, this application is unlikely to be economic
in areas of the country where the cost of electricity is low. If no steam
market is available, then the sale of electricity usually represents the only
other potential market for recovered energy and should be examined.
As part of this preliminary screening, a community should perform a
inventory of nearby industries, or other institutions, which may be signif-
icant users of steam (or high temperature water).
4.2.4 Public Interest
The success of a resource recovery project is highly dependent on the
support of citizen groups, local media, and the community's elected officials.
However, at this stage, it is not practical for community officials to do more
than gauge public opinion in a very subjective manner. Although public infor-
mation sessions are important in the early stages of resource recovery project
development in order to educate and exchange information with the public, such
sessions can only be effective when substantial information about the proposed
systems is available. Consequently, the actual evaluation of public opinion
toward resource recovery at this stage should be based on the history of
public acceptance of community projects.
4.2.5 Summary
The major objective of the preliminary screening step is the early elimi-
nation of those communities for which resource recovery is clearly not a
viable solid waste management alternative. For communities showing potential,
it should also provide early insights as to where the major effort for
subsequent planning activities should be targeted.
4-4
-------
4.3 ESTIMATE WASTE QUANTITIES
Under ideal conditions, refuse weighing records will be available from
the present landfill(s) to facilitate the estimation of waste quantities.
These data would have to be adjusted to estimate the quantity of waste which
is actually suitable for processing. As a general rule, approximately
5 percent by weight of the waste stream is comprised of white goods, con-
struction debris, and other bulky materials that cannot be processed by small-
scale energy recovery systems; thus, the processable waste quantity should be
calculated as 95 percent of the available waste stream.
Where landfill weighing records do not exist, a rough estimate of waste
quantity can be obtained using the population of the community and an average
per capita waste generation rate. Although this estimate may not be very
accurate, it will suffice for the purposes of this preliminary feasibility
analysis. A more detailed study of the waste stream may be desirable prior to
design of the system. The methodology for making this preliminary estimate is
presented in Worksheet 1.
4.4 EVALUATE EXISTING SYSTEM
The purpose of this step is to collect data on the existing solid waste
collection and disposal system in order to develop a baseline conventional
disposal system (i.e., the system that would otherwise be implemented) for
later comparison with the resource recovery alternative(s). As mentioned
earlier, it is desirable that the use of this guide occur when the community
is in the process of assessing its landfill requirements, or soon thereafter,
so that up-to-date information is available.
An evaluation of the existing landfill operations should be conducted,
including both an environmental assessment and estimation of the remaining
capacity for each site. State landfill disposal regulations should also be
reviewed to ensure that each site is in compliance with applicable regulations
(which should reflect the "Criteria for the Classification of Solid Waste
Disposal Facilities" promulgated under Section 4004 of RCRA). If a site is
not in compliance, the cost of upgrading to compliance status should be
estimated.
4-5
-------
If the capacities of currently used landfills are not available, they can
be estimated using the remaining landfill area (in acres), the average depth
of fill (in feet), and the community's annual waste generation rates (in tons
per year). The following assumptions are necessary:
A refuse to cover ratio of 4:1 by volume,
An in-place density of the refuse of 1,000 pounds per cubic yard, and
No significant increase in community's waste generation in the future.
The methodology for performing this estimate is shown on Worksheet 2,
"Estimation of Remaining Landfill Capacity/Life".
If it is determined that the site has 10 or more years capacity remain-
ing, then for planning purposes, the costs for this site should be used for
comparison with the resource recovery option. To do this, the budget for the
landfill operation should be obtained. An effort should be made to ensure
that it does not include inappropriate items nor omit any hidden costs of the
operation. For instance, the landfill operations may be included as part of a
larger public works or refuse management budget, including such items as
refuse collection and disposal, snow removal and street sweeping. On the
other hand, costs for vehicles and other equipment may appear on a separate
capital outlay budget and administration costs may be hidden in a general
administrative and overhead budget.
If less than ten years landfill capacity remains, costs should be devel-
oped for a new landfill which will require the identification of one or more
potential sites. If no sites can be located within the borders of the
community, then sites in adjoining jurisdictions with sufficient capacity
should be identified. In this case, the costs associated with solid waste
transportation (either by direct haul or transfer haul) should be investigated
and added to the anticipated disposal fee at these sites.
4-6
-------
Owing to the site specific nature of landfill costs, no effort has been
made to develop generic costs for this guide. The following factors, however,
are among the most important in determining the cost of a new landfill:
Land cost;
Site preparation;
Need for leachate controls;
Equipment requirements;
Availability of cover material;
Leachate monitoring requirements; and
Gas control requirements.
If necessary, community officials should consult other references for detailed
procedures for estimating landfill operation costs.
4.5 IDENTIFY AND EVALUATE MARKETS
The successful implementation of a waste-to-energy facility hinges on the
availability of a suitable energy market. Indeed, the nature of the resource
recovery system implemented should depend on the market(s) that are available
for recovered energy. Consequently, perhaps the most critical step in deter-
mining the feasibility of resource recovery is the identification and evalua-
tion of potential energy users.
Users of steam and hot water represent the best markets for recovered
energy, since the revenues from these products are greater than for elec-
tricity. In order to identify and evaluate potential users of these recovered
energy products, a market analysis including the following should be conducted:
Identification "of major industries, businesses, and other potential
energy users;
Survey of these potential users to gather information on their energy
requirements; and
Solicitation of letters of interest to purchase recovered energy from
those' which represent viable markets.
4-7
-------
4.5.1 Identify Potential Energy Users
This initial data collection effort is primarily intended to identify all
businesses and industries within the marketing area. In many small communi-
ties, city or town officials will have a good knowledge of area businesses and
industries. This information can often be supplemented with information from
directories and business listings. Such listings, while varying from area to
area, can generally be obtained with a minimum of effort. Some sources which
may be helpful include:
1. List of Industrial Dischargers, EPA Office of Water Enforcement,
Feb. 1980.
2. Local Chamber of Commerce.
3. State or regional pollution control authority listings of point
sources of air emissions or wastewater discharges.
4. Municipal wastewater treatment works.
The listing of businesses and industries within a community, particularly in
the larger ones, will obviously be extensive, containing small businesses
which have very small energy requirements. Through an initial screening, many
of the included establishments can be eliminated, even without extensive data
collection via market surveys. The following questions can be used as an
initial screening:
Is the total energy (steam or hot water) requirement normally very
small or highly variable?
Is there space available for a resource recovery facility within
2 miles of the energy user?
4.5.2 Market Survey
A market survey is the key means of obtaining necessary information to
identify qualified potential energy markets. This information will enable a
4-8
-------
small community to judge the appropriateness of potential buyers in regard to
the important marketing criteria:
Type of energy used;
Total energy requirements;
Daily and seasonal variation in energy demand; and
Current energy costs.
Market surveys are generally conducted by questionnaire through the mail and
followed with a phone call to obtain additional information or verification of
data, or to obtain information from businesses which did not respond. A well
run survey can be very effective in identifying potential energy buyers and
determining their ability to viably incorporate resource recovery into their
systems. A typical energy market questionnaire is presented in Appendix B.
This information can be used to identify potential energy users and further to
compare the compatibility of energy demands with the capabilities of a
waste~to-energy system. Obviously, the most desirable energy market would be
one which required an amount of energy that is equal to, or greater than, that
which can be produced from the available waste stream.
Knowledge of the current and projected costs for energy of a potential
market is extremely useful in determining the selling price of steam. The
market can be expected to pay only its avoided costs less a discount as an
inducement to make a long-term commitment to purchase energy. This avoided
cost will depend primarily on the fuel used by the market, but also on the
savings that could be realized on the operation, maintenance, and replacement
of energy-generating equipment. In turn, these non-fuel related savings will
be dependent on whether the market's existing steam plant is operated
full-time to supplement purchased steam; is used only for back-up and/or peak
operation; or is shut-down completely with the energy-recovery facility
providing back-up capability. In addition, an understanding of the market's
existing energy situation, and the constraints facing it in the future, will
allow the community to take the initiative in setting the price for steam,
which could result in the negotiation of a more favorable steam purchase
agreement.
4-9
-------
In essence then, the market survey should provide the basis for further
considering resource recovery. If potential energy buyers exist, i.e. if
their location is satisfactory and if their energy demands are compatible with
respect to quantity and specifications, then consideration of waste-to-energy
systems is warranted.
The investigation of electricity markets may be warranted if no suitable
steam customer can be found or if a potential customer has a significant
seasonal variation in steam demand, making cogeneration potentially
attractive.
The Public Utilities Regulatory Policy Act of 1978 (PURPA) contained
provisions to encourage the development of cogeneration and small electric
power projects utilizing renewable energy resources, including:
A requirement that an electric utility purchase electricity from a
qualifying facility at fair rates, which were defined as being just
and reasonable to the utility, in the public interest, and non-
discriminatory to the facility;
A requirement that an electric utility make such interconnections with
a qualifying facility as may be necessary to accomplish purchases or
sales of electricity; and
An exemption for qualifying facilities from state and federal
regulations as public utilities.
Regulations issued by the Federal Energy Regulatory Commission (FERC) in
February, 1980, required a utility to purchase electricity from resource
recovery and other alternative energy facilities at the utility's avoided
cost. Utilities were also allowed, but not required, to enter into long-term
contracts to purchase this electricity. The administration of this program,
including the promulgation of regulations dictating how the avoided cost for
individual utilities should be determined, is the responsibility of State
Public Utility Commissions (PUCs). In January, 1982, the U.S. Court of
Appeals struck down two key provisions of the FERC regulations (American
4-10
-------
Electric Power Service Corporation, et al. v. Federal Energy Regulatory
Commission, et al.):
The requirement that the rates paid by a utility for electricity from
qualifying facilities be equal to its avoided cost; and
The blanket right of a qualifying facility to interconnect with a
utility, regardless of the substantive and procedural requirements of
the Federal Power Act (16 U.S.C. Sec. 824i,k), which require that such
interconnections be in the public interest.
At this time, it is uncertain how PURPA will affect the sale of electricity
from energy recovery facilities; however, it seems likely that state PUC's
will have greater authority in defining the relationship between the utility
and the energy recovery facility. Although PUC's in general have not taken an
active role in implementing PURPA, electric utilities have entered into
serious and fruitful negotiations in several recent projects. In most cases,
electric utilities will represent the best market for electricity, since the
fair rates determined under PURPA are likely to be equal to, or greater than,
the rates they charge large volume industrial, commercial, and institutional
users. Where the utility is unwilling or unable to purchase electricity, it
may be worthwhile to examine other potential markets, including industries and
the municipality itself (particularly its wastewater treatment plant).
In order to evaluate the market for electric power, it will be necessary
to collect data on electricity rates and avoided costs from area utilities.
Under PURPA, utilities are required to periodically submit data on their
avoided costs to state PUC's; thus, this information should be available from
these sources, also. In addition, it would be worthwhile to contact the PUC
in order to determine its posture towards the sale of electricity from energy
recovery facilities and its interpretation of PURPA, and to obtain general
information on area utilities which will be useful in assessing them as
potential markets for electric power. It will also be necessary to enter into
discussions with area utilities in order to determine their interest in
purchasing electricity, and the conditions under which they would make these
purchases, including price. As for steam, it will be necessary to offer the
utility a discount over its avoided cost as an inducement to sign a long-term
contract.
4-11
-------
The cogeneration of electricity and steam may also represent a viable
alternative where the steam demand of a potential market is insufficient to
utilize all the MSW generated by the community. It is not possible for this
guide to consider all possible cogeneration configurations which could be
applied to various site-specific market conditions; however, it does address
what is probably the most common application, where the market's steam demand
is seasonal, and excess steam during the off-season is used to generate
electricity.
This application would involve two turbine generators in parallel one
back pressure and one condensing. The steam required by the market would be
throttled through the back-pressure turbine to produce steam at the desired
conditions plus some electricity. The excess steam would be used to drive the
condensing turbine generator which would extract as much energy as possible
from the steam as electricity and return condensate directly to the boiler.
For the purposes of this guide, it is assumed that the market's peak demand
will require all the steam produced by the energy recovery facility. Two
cogeneration configurations are considered based on the availability of excess
steam:
Configuration I is designed to utilize a maximum of 75 percent of the
total steam production in the condensing turbine; and
Configuration II is designed to utilize a maximum of 50 percent of the
total steam production in the condensing turbine.
Worksheet 3 presents the methodology for calculating steam and/or
electricity production from MSW.
4.5.3 Letters of Interest
After identification of potential energy users through the market survey,
it is desirable to obtain a "Letter of Interest" from prospective users
showing their commitment to purchase energy. The incorporation of a resource
recovery facility can only be successful with a firm contractual commitment
from an energy market. The "Letter of Interest," while not a contractual
agreement, represents a firm basis for considering sale of energy to a buyer.
4-12
-------
Its objective is to provide more than a general noncommittal statement of
willingness; rather, it is intended to actually identify those markets which
are truly interested.
The "Letter of Interest" should address the following points:
Willingness to Participate - the letter should contain a statement
from the prospective buyer displaying their interest and willingness
to commit to the purchase of material at given conditions.
Quantity of Energy Needs - the amount of energy that the buyer may be
willing to purchase should be specified.
Energy Characteristics - the buyer should also specify the quality of
energy needed. The conditions required for purchase should be
included, such as temperature, pressure, and quality of steam where
steam is the marketed commodity.
Energy Price - the buyer should specify what price they are willing to
pay for recovered energy.
Without a commitment from prospective energy buyers in the form of "Letters of
Interest," community officials should reevaluate their interest in resource
recovery since the identification of such interested parties is crucial to the
successful implementation of resource recovery.
4.6 PERFORM PRELIMINARY ECONOMIC ANALYSIS
This section is intended to provide a community with a means of quickly
and easily developing a resource recovery solid waste management alternative
and determining its costs. By using this guide, a community will be able to
determine whether or not resource recovery represents a potentially cost-
effective disposal alternative for their specific situation. Nevertheless, it
should be emphasized that this guide has been developed for a generalized
situation, and a site-specific analysis should be performed before the
community proceeds with project procurement.
4-13
-------
The Preliminary Economic Analysis of resource recovery for the purpose of
this study has been divided into six steps:
System sizing;
Estimation of capital costs;
Estimation of annual costs;
Estimation of revenues;
Life-cycle costing; and
Sensitivity analysis.
Following each of these important steps, a community can determine its
economic feasibility for resource recovery. Each of these steps are discussed
in detail in the following subsections.
4.6.1 System Sizing
Determining the size of the resource recovery system is an important
first step in developing system costs. For this stage of evaluation,
community officials can effectively determine the size of a system which meets
its waste disposal needs. For later stages of system development, specific
vendors should be involved in determining individual unit sizes and configura-
tions and a community should undergo more detailed waste stream characteriza-
tion and generation studies.
For the purpose of this guide, the size of the system will be based on
existing waste generation in the planning area and the energy demand of the
market.
The following factors need to be considered in determining facility size:
Quantity of waste available;
Requirements of the market;
Desired system redundancy;
Planned .operating schedule; and
Variations in waste generation.
4-14
-------
The most important of these factors is of course the quantity of refuse
available for processing. Generally, the system should be designed to accom-
modate all the processable waste generated by the community, since disposal
remains the primary function of a resource recovery system. (As previously
mentioned, only 95 percent of the available waste stream will be processable;
large bulky items, white goods, etc. will continue to need disposal in a
landfill.) In order to ensure that the system can handle all processable
waste, excess capacity-should be included to account for surges or variation
in waste generation during peak periods; however, it is important that the
system not be significantly oversized, since this will increase capital costs
without generating additional revenues from the sale of energy and tipping
fees, thus increasing the net cost per ton of disposal. As a rule of thumb,
10 percent excess capacity should be added to account for waste generation
fluctuations. Worksheet 4 presents steps for a community to determine system
sizing.
The requirement of the energy market is also an important consideration
in determining system size. System capacity should not be greater than that
required to meet the demand of the energy market(s). If the market demand for
energy is significantly greater than can be produced from the community's
refuse, it may be desirable to consider taking waste from neighboring
jurisdictions. Conversely, where the energy market has a small energy demand,
it may make sense to construct a smaller facility accepting waste from only
part of the community.
The requirements of the market will also play a role in determining the
redundancy necessary for the system. The best situation is where the market
intends to retain its existing energy system to supplement the production of
the resource recovery facility and to act as a back-up; thus, no additional
redundancy is required beyond that needed to assure refuse disposal. If the
market does not want to use the existing system as a back-up, a completely
redundant module may be necessary to ensure full production during unscheduled
down-time. If the market requires a high degree of reliability, it may be
desirable to design even more redundancy into the system by reducing the
sharing of other system components such as secondary combustion chambers and
4-15
-------
boilers. It should be kept in mind that inclusion of excess redundancy will
significantly increase capital costs.
The redundancy designed into the system will also depend on the intended
operating schedule of the system. In the situation where the system operates
five days per week, routine maintenance can be scheduled on the weekends.
However, if the facility operates six or seven days per week, it would be
necessary to include an additional unit so that one can always be taken off-
line for maintenance. It is usual for modular combustion systems to be
operated continuously for 5-6 days, since this reduces wear-and-tear on the
furnace refractories resulting from frequent temperature changes, provides
efficient utilization of system capacity, and reduces the consumption of
auxiliary fuel during start-up.
In many communities, significant seasonal variations in waste generation
occur that may dictate the inclusion of excess capacity sufficient to handle
peak periods. As previously discussed, 10 percent excess capacity should be
added to accommodate such fluctuations.
One factor that need not receive significant consideration at this time
is future waste disposal requirements. It is not necessary to size
small-scale systems in anticipation of future increases in waste generation,
since additional units can be added as increases in waste generation occur.
This is one of the major benefits of modular combustion systems, as it
eliminates the guess work in predicting future population and waste generation
trends, as well as the expense of excess capacity which is not required until
several years after start-up.
In developing a generalized methodology for system sizing, it has been
necessary to make some assumptions with respect to the factors discussed
above:
1. The system will operate continuously for five days per week and be
taken off-line for routine maintenance over the weekend.
4-16
-------
2. The market will retain adequate back-up capability to handle
temporary loss or reduction of energy production due to unscheduled
down-1 ime.
3. No extraordinary system redundancy, such as additional combustion
chambers or boilers shall be included to increase system reliability.
4. The system shall include 10 percent excess capacity to accommodate
peaks in waste generation.
4.6.2 Estimation of Capital Costs
The capital cost of small-scale modular incineration facilities is a
function of system capacity. The development of capital costs should, there-
fore, be based upon the appropriate system size as developed in Section 4.6.1.
It is fairly obvious that the selection of a specific vendor could greatly
influence the ultimate capital cost of a system; however, from a review of
costs obtained from various system vendors, a generalized correlation has been
developed between system capacity and capital cost. Cost curves have been
developed for systems generating steam, electricity or both energy products
(cogeneration), and are presented as part of Worksheet 5. The base capital
costs include land, site development, buildings and equipment, and engineering
and legal fees. In addition, 10 percent of the base capital cost is included
for start-up and shake-down. This estimate does not include financing during
construction, which is included in the debt service calculations on Worksheet
6. The capital cost curves were finalized in December, 1981, and should be
updated to the current time by using the Chemical Engineering Plant Cost Index
(or an equivalent cost index). In addition, they should be escalated further
to reflect the impact of inflation on construction costs prior to
ground-breaking.
4.6.3 Estimation of Annual Costs
In addition to the initial capital cost of a resource recovery facility,
the annual operating costs must be determined. These costs are the expense of
keeping the facility running to process MSW and recover marketable commodi-
ties. Annual operating costs can be broken down into two individual areas:
Annualized capital costs; and
Operating and Maintenance (O&M) costs.
4-17
-------
4.6.3.1 Debt Service
Annualized capital costs or the debt service consist of interest payments
on borrowed capital and the payback of that capital. These costs must be paid
whether the plant operates at full capacity or not. The annualized cost of
borrowed capital is dependent upon three factors: the financing approach
used, the bond interest rate, and the loan term. The recommended financing
strategy for resource recovery projects involves the sale of revenue bonds
with or without private equity participation. (Private equity investment can
be attracted to a project in return for nominal ownership of the facility and
the associated tax advantages, and can considerably reduce overall capital
requirements.) Lower financing costs can be achieved through general obli-
gation (G.O.) bonds; however, this approach greatly increases the exposure of
the community to the risks associated with the project. This guide considers
three financing approaches: revenue bonds, revenue bonds with 25 percent
equity participation, and G.O. bonds. The bond interest rate will depend on
the type of bond (revenue or G.O.), the credit rating of the issuing
municipality or agency, and, in some cases, the credit rating of the other
project participants (system vendor and energy market). The interest rate
used for this analysis should reflect the current rate obtainable for similar
local bond issues. The loan term is based on the expected useful life of the
facility, usually considered to be 20 years, and the term of the energy
purchase agreement, whichever is shorter.
Where specific information on these factors is not available, the
following assumptions should be made for the purposes of a preliminary
assessment of feasibility:
Revenue bond financing;
Interest rate of 13 percent for revenue bonds or 11 percent for G.O.
bonds; and
Fifteen-year loan term.
Worksheet 6 presents the methodology for determining the annualized capital
cost, including a table of multipliers which when applied to the estimate of
capital costs will yield the annual debt service.
4-18
-------
4.6.3.2 Operating and Maintenance (O&M) Costs
Annual operating and maintenance (O&M) costs are those costs which are
necessary to keep a facility operating. These costs include the following
items:
Labor - dependent upon local wage rates, number of personnel required
and type of facility;
Maintenance - materials and labor used for repairs and routine
maintenance;
Auxiliary materials and energy usage - includes supportive
electricity, auxiliary fuel, rolling stock, and water needed to
operate facility and peripheral equipment;
Residue disposal - a function of volume reduction and available
disposal alternatives;
Maintenance reserve fund - to cover major maintenance needs, such as
the replacement of refractories or boiler tubes; and
Insurance.
Worksheet 7 contains necessary guidelines for estimating each of these items
contributing to the total O&M costs.
4.6.4 Estimation of Revenues
The amount of energy revenues produced by a resource recovery facility,
and thus energy revenues, is a function of the quantity (and characteristics)
of the solid waste processed and the thermal efficiency of the system. The
price received for the energy sold is usually based on the market's existing
energy production costs, including a 10 to 25 percent discount as an incentive
for a long-term contract. Typically, price increases are indexed in some way
to that of the fuel displaced by the recovered energy.
The methodology for estimating energy revenues is contained in Worksheet 8.
As energy costs vary considerably according to geography, fuel type and tech-
nology, it will be necessary to conduct a detailed interview with the proposed
energy market in order to ascertain its current energy costs if information was
not forthcoming during the market survey step (Section 4.5.2).
4-19
-------
4.6.5 Life-Cycle Costing
It is common practice in the evaluation of public works projects to
assess their economics on the basis of the first year of operation; however,
the first year of operation of a resource recovery project is not indicative
of its potential economic performance in the future. In fact, it should
represent the worst possible case over the life of the project. This is due
to the combined effect of inflation and the expected escalation of the value
of the energy produced by the facility. Over the life of the project,
inflation will reduce the real value of the debt service payments. Meanwhile,
the revenues from the sale of energy from the facility can be expected to grow
at a. faster rate than inflation. Operating costs should increase at
approximately the same rate as inflation, thus remaining unchanged in real
value. The result is that, with time, there should be a reduction in the real
net annual operating costs for the facility.
Consequently, any evaluation of the feasibility of resource recovery
should involve the assessment of facility economics over the planned life of
the facility. This guide presents a simplified life-cycle costing methodology
relying on the cash flow analysis (rather than the more complicated techniques
using present worth analysis) which can be easily applied and is readily
interpreted by public officials. This methodology involves projecting costs
and revenues over the 15 or 20 year planning period based on assumptions on
inflation and the rate of escalation of energy revenues. The net cost per ton
is expressed in current dollars to facilitate interpretation, since inflation
renders actual dollar quantities in future years meaningless to most readers.
Although predicting the rates for inflation and energy cost escalation is
speculative exercise, an attempt has been made in the following section to
offer, guidelines for selecting values for use in the life-cycle costing
analysis.
4.6.5.1 Inflation and Escalation
One measure of inflation is the U.S. Department of Labor's Consumer Price
Index (CPI) for Urban Wage Earners and Clerical Workers. The percent annual
change (from December to December) is shown in Table 4-1 for the 10 years 1971
4-20
-------
TABLE 4-1
Percent Annual Change in Consumer Price Index (CPI)
Year Percent
1971 3.4
1972 3.4
1973 8.8
1974 12.2
1975 7.0
1976 4.8
1977 6.8
1978 9.0
1979 13.4
1980 12.4
4-21
-------
to 1980. The average annual increase over this period was 8.1 percent; however,
since the Arab Oil Embargo (1973-74), the rate of increase has been 9.3 percent.
Given this history and the present Administration's commitment to controlling
inflation, a rate of 9% should be the maximum used in this analysis. Most
analysts consider it unlikely that inflation can be held below 5 percent for
any extended period; therefore, as a conservative estimate it is recommended
that a rate of 7 percent be used in this analysis.
For the purposes of this analysis, it will be assumed that operating and
maintenance costs (including labor, parts, utilities, fuel, and residue
disposal) will increase with inflation. In the past decade, the costs of
municipal services, measured by the Municipal Cost Index published by American
City and County, has increased slightly faster than inflation (as measured by
the CPI); however, the difference is less than 1 percent and should be ignored
for the purposes of this analysis, although it can be examined in the
Sensitivity Analysis (see Section 4.6.6) if desired.
The escalation rate for energy revenues is more difficult to predict and
will depend on how the contract with the energy purchaser is structured. It
is usual for such contacts to contain a pricing mechanism which pegs the price
of recovered energy to a conventional fuel, usually the one that is being dis-
placed. Naturally, the increase in revenues will be greater when this displaced
fuel is oil rather than coal. Since the Arab Oil Embargo (1973-74), the average
annual escalation value of petroleum products has been over 15 percent in real
dollars. Although this rate is unlikely to be maintained over the long-term,
a rate of 8 percent seems reasonable. To be conservative, a suggested real
value escalation rate for revenues where oil is the displaced fuel is 5 percent.
The lifting of Federal controls on natural gas prices is expected to boost
the price of this fuel as it finds its market value. Since natural gas is a
very desirable fuel, it is likely that its price will rise nearly as fast as
that of petroleum fuels; therefore, the suggested real value annual escalation
rate for energy revenues where natural gas is displaced is 4 percent.
4-22
-------
Coal is a less desirable fuel (since its utilization involves greater use
of air pollution control devices and requires the handling of residual mate-
rials), which is reflected in its value relative to other fuels; however, as
the costs for oil and gas increase, the demand for coal is likely to increase
and put some upward pressure on its real value. A safe guess is that the real
value of coal will increase in the range of 1 to 4 percent of value over the
long-term; therefore, it is suggested that a real value escalation rate of
2 percent be used for energy revenues where coal is the fuel displaced.
The escalation rate for revenues from the sale of electricity is
site-specific and depends on the circumstances of the local utility,
particularly with respect to such factors as the fuels used to generate the
power it produces and purchases, and its need for additional capacity over the
planning period. It is recommended that local utility projections of annual
cost escalation be used wherever possible. Otherwise, an estimate based on
recent electric power price increases is suggested. In most cases, the real
value annual escalation rate for electricity should be in the 0-2 percent
range.
The escalation rate used for energy revenues should be the sum of the
inflation rate and the real value escalation rate assumed for the analysis.
4.6.5.2 Net Annual Costs - Initial Year
The initial year (Year 0) of operation of a resource recovery facility is
a minimum of 3 years away from the beginning of planning. This guide will
assume a more realistic, but still optimistic, schedule which calls for start
of construction (ground breaking) in 2 years and completion of construction,
start-up, and shake-down in 4 years. It is necessary to assume a schedule
since cost escalation will increase the capital costs prior to construction
and energy revenues prior to full operations.
The methodology for calculating the net annual costs for the initial year
of operation (Year 0) is contained in Worksheet 9.
4-23
-------
4.6.5.3 Life-Cycle Costs - Resource Recovery Alternative
The life-cycle costing analysis adopted for this guide involves the
projection of costs and revenues for 5-year intervals over the planned life of
the resource recovery facility. In order to avoid the complication of adding
modules to the system to accommodate future increases in waste quantity, waste
generation is assumed to be constant throughout the planning period. This
should not have a significant impact on the validity of the analysis, since
the unit cost for resource recovery (net cost per ton) should not alter
greatly with the addition of capacity and increased waste throughput.
In order to facilitate comparison with the landfill alternative, this
analysis views the resource recovery alternative as a comprehensive solid
waste management system by including the costs for landfill disposal of
unprocessable waste.
The procedure for the calculation of life-cycle costs for a resource
recovery alternative is found in Worksheet 10.
4.6.5.4 Life-Cycle Costs - Landfill Alternative
In order to properly evaluate the resource recovery alternative, it is
necessary to determine the life-cycle costs for landfill over the planning
period. An accurate estimate of future landfill costs for the community is of
critical importance in this step, in order to provide a realistic comparison
with the resource recovery alternative; therefore, it is important that the
estimate developed pursuant to Section 4.4 reflects the impact of the RCRA
Criteria and current/future land costs if a new site is required. Provided
that these factors have been taken into account, landfill costs can be
assumed, conservatively, to escalate at the rate of inflation. These costs
should be entered on Worksheet 11.
4.6.5.5 Life-Cycle Cost Comparison
The best way to compare the life-cycle costs for the resource recovery
and landfill alternatives is graphically. Worksheet 12 contains a blank sheet
for this purpose. In most cases, the early years of a resource recovery
4-24
-------
alternative will be more expensive than landfill; however, in most cases, the
resource recovery alternative will become cheaper than landfilling before the
end of the planning period. If this occurs before the mid-point of the
planning period, then resource recovery can be considered to have definite
potential as a cost-effective solid waste management alternative. If this
occurs after the mid-point, then resource recovery may not be a cost-effective
alternative; however, this may be due to the generally conservative
assumptions made for this analysis. It is recommended that these assumptions
be reviewed and their effect on project economics be assessed in the
Sensitivity Analysis discussed in the following section before a decision is
made to proceed with or stop project development.
4.6.6 Sensitivity Analysis
In developing the economic analysis of the previous section, it was
necessary to make a number of assumptions based on predictions of the future
behavior of the economy. As the future undoubtedly has some surprises in store
for us, it is necessary to assess the impact that any deviations from these
predictions will have on the economics of a resource recovery project. It is
particularly useful to consider "worst case" scenarios in order to focus
attention on the inherent risks of resource recovery. "Best case" scenarios
are valuable in that they highlight the need to structure the project so that
potential savings/profits are shared equitably, although they should not be
used to raise expectations unreasonably.
The following factors are prime candidates for consideration in sensi-
tivity analysis for resource recovery:
Debt service;
Energy revenues;
Inflation rate;
O&M cost escalation rate; and
Waste quantity.
4-25
-------
The debt service payment could be affected by the financing approach
used, the interest rate obtainable at the time the bonds are issued, and a
greater than anticipated initial capital investment due to cost overruns and
the requirement for significant modifications during start-up and shake-down.
The future revenues from the sale of energy could be greater or lower
than anticipated due to a number of occurrences. The cost of the energy
market's displaced fuel could escalate at a higher or lower rate than expected.
The high cost of the displaced fuel could prompt the market to convert to a
cheaper energy source. The energy market could go out of business or close the
plant using the recovered energy. Poor system reliability could result in less
MSW being processed and less energy being produced and sold. Protection against
some of these negative occurrences is available through contractual means, but
others represent risks which the community will not be able to avoid.
The principal effect of inflation on the economics of a resource recovery
project is on the relative value of the debt service compared with other
operating costs and revenues. A low inflation rate will result in the debt
service over the life of the project being higher (in real terms) than
anticipated.
The O&M cost for the facility could increase at a faster rate than
inflation and/or could be higher than anticipated, due to repeated equipment
failures.
A lower than anticipated quantity of waste delivered to the facility
could also have a significant impact on project economics, since revenue would
be significantly reduced without corresponding reductions in debt service and,
to a lesser degree, O&M costs.
The sensitivity analysis should examine those factors which are of
particular concern to the community considering resource recovery. It is
useful to examine each factor separately so that its impact on project
economics can be judged. "Worst case" and "best case" scenarios can also be
developed where several factors are adjusted at a time. Worksheet 13 contains
4-26
-------
several copies of a life-cycle cost summary sheet for calculating project
economics for each scenario examined.
4.7 MAKE PROCEED/STOP DECISION
The decision to proceed with the development of an energy recovery
project, identified through the use of this guide, should be based on two
factors:
the technical and economic feasibility of the proposed project; and
the level of commitment on the part of all project participants to the
implementation of energy recovery.
Technical feasibility, provided this guide has been followed carefully,
can be assumed at this point. It will be necessary to retain an engineering
consultant to review the proposed project to identify any technical problems.
If significant problems are discovered, the feasibility of the project should
be reassessed at that time.
In order for an energy recovery project to be considered economically
feasible, it should be the cheapest solid waste disposal alternative over the
length of the planning period. Typically, the cost for such a project is
higher during the early years of operation and may exceed the cost for
landfill; however, resource recovery can still be considered to be feasible if
it appears to be the cheapest alternative for the major part of the planning
period. Recently, financing approaches have been developed to alleviate the
problem of high early-year disposal costs.
Even if the proposed project is feasible according to the analysis
performed using this guide, the implementation process is long and sometimes
difficult. Without the firm commitment to do what is necessary to ensure
implementation from all the participants, particularly the sponsoring
political jurisidiction(s) and the proposed energy market, the project can
easily become stalled and eventually abandoned. The Phase II and III planning
steps (see Chapter 5.0) require a considerable investment of time and money on
4-27
-------
the part of these participants to achieve success. It is important that an
able and diligent project manager be hired to lead the planning effort on
behalf of the community, and that the appropriate engineering, management,
financial, and legal consultants be retained. The acquisition of this staff
and consulting expertise can represent a considerable expense for a small
community; however, if the community is not prepared to commit the necessary
resources to the project, it should not proceed with implementation.
In addition to the community sponsoring the project, it is essential that
the proposed purchaser of recovered energy show more than just token interest
in this effort. The active participation and cooperation of the purchaser in
many aspects of project development, including the determination of facility
configuration, siting, and negotiation of the energy purchase contract, can
greatly facilitate implementation.
Other factors must also be examined in making this decision, and, in
particular, potential sources of opposition to the project should be
identified and assessed. Private firms involved in solid waste collection and
disposal may see the proposed project as a threat to their livelihood. The
community must be prepared to take the necessary steps to ensure that a
sufficient quantity of waste is delivered to the planned facility where some
or all of this waste is currently controlled by private firms. Also, public
opposition to the site or other features of the project can easily prevent
implementation. The existence and severity of such problems should be
determined before the decision to proceed or stop is made, so that the
potential for opposition, and its impact on the implementation process,
can be assessed.
In summary, the decision to proceed with or to stop the development of an
energy recovery project should be made in the light of both the merits of the
project and the political realities of the community. The decisionmaker must
answer the following questions:
Is the project the best and most cost-effective solid waste management
alternative for the community?
Can the project be implemented?
4-28
-------
5.0 PLANNING FOR RESOURCE RECOVERY PROCUREMENT ... THE NEXT STEPS
A major barrier to the widespread implementation of resource recovery
across the nation has been the complex nature of the planning process. This
process is a unique blend of technical, marketing, financial, legal, and
organizational steps which must be integrated into a coherent and coordinated
implementation program. It is essential to include a large number of partic-
ipants, each having a different perspective on resource recovery and vested
interest in the outcome of the planning effort. These participants typically
include:
Local government(s);
Purchasers of recovered energy (and/or materials);
System and equipment vendors;
Investment banking firms;
Private collection and disposal firms;
Engineering and management consultants; and
The general public.
Although each of the participants will be familiar with certain aspects of
resource recovery planning, few will, at the outset, comprehend the entire
process. Consequently, it is critical that the process allows for the
continuing education of these participants regarding the issues and
complexities of project implementation in order to facilitate the orderly
resolution of problems and conflicts.
The value of a carefully structured planning program with well defined
decision points and milestones should not be underestimated. By indicating
the sequences of events leading to implementation, one can prevent the project
participants from becoming overwhelmed by the complexities of the planning
process. In addition, it can provide a measure of progress as steps towards
project implementation are completed. Such a program can convince project
participants that the implementation effort is genuine and will succeed in
leading to the construction of a facility. The resulting confidence can
create momentum towards project completion.
5-1
-------
The resource recovery model planning program for small communities is
summarized in Figure 5-1 which shows a generalized flow diagram for the steps
that must be taken to implement a resource recovery project. This model
should not be regarded as a rigid "cookbook" procedure for resource recovery
planning, but as a flexible guide to structuring a planning program around the
unique characteristics of each individual community.
A discussion of the planning model for Phase I (Feasibility Analysis) was
presented in Section 3.1 and will not be repeated here. This section will
discuss the planning associated with resource recovery project procurement,
which is divided into two phases:
Phase II - Procurement Planning; and
Phase III - Procurement.
5.1 PHASE II - PROCUREMENT PLANNING
The objective of Phase II is to finalize the project concept (including
such critical details as the market, site, and technology), to make decisions
on the approaches to procurement and financing, and to strengthen the commit-
ments for purchase of energy and for waste supply from participating jurisdic-
tions. The remainder of this section outlines the steps that must be taken to
achieve this objective.
5.1.1 Establish Project Management Structure
A structured planning program is perhaps most important in Phase II where
the steps and their outputs are less tangible; thus, it is important to define
carefully what steps need to be accomplished and what specific outputs must be
generated.
The resources necessary to complete Phase II will be significantly
greater than for Phase I. It is desirable to acquire the services of a firm
or a team of firms with considerable previous experience in resource recovery
project implementation to assist the community in structuring a project which
has a high probability of success at as low a cost as possible.
5-2
-------
CO
0)
C
3
ฃ
E ซ-
o c
O O
ll
00.
si!
ss ?
.1?!
UL = <0
c s:
(0 ^4
o 3
o ซ
ซ 2
3
O
CO
CD
OC
5-3
-------
5.1.2 Refine Project Concept
This step represents a bridge between Phase I and Phase II activities.
It should include a review of the Preliminary Economic Analysis performed by
the community to confirm its results. If more than one viable resource
recovery alternative has been identified, a decision should be made as to
which has the best chance of success and should be pursued. The details of
the selected alternative should be developed, including site selection, final
system configuration, source for utilities (electricity, sewer, water for
boiler, make-up and quench), and other design criteria. A revised cost esti-
mated based on these site specific conditions should be prepared.
5.1.3 Identify Institutional Requirements
It may be necessary for the community to develop a new institutional
framework to implement, manage, and operate a resource recovery facility.
This would not be necessary where the community wishes to finance the project
with general obligation (G.O.) bonds and manage the project through its public
works department; however, if more than one community is involved in the
project and/or revenue bonds are to be used for financing, it may be desirable
to create an authority to act as the implementing agency and to manage the
project once it is operating. This body may be granted the power to issue
bonds and to enter into long-term contracts for the sale of energy and for
waste supply. This step should be used to identify alternative institutional
frameworks for evaluation in subsequent steps in Phase II.
Also at this juncture, it is appropriate to consider closely how the
supply of solid waste for the facility should be secured for the planned life
of the project. Again, if only one jurisdiction is involved and both collec-
tion and disposal is publicly controlled, waste control should not be a
problem; however, if the proposed project involves several jurisdictions and/
or the private sector is extensively involved in either collection or dispo-
sal, then action is required. Participating jurisdictions may need to enact
ordinances to gain control of the waste stream and enter into long-term "put-
or-pay" contracts with facility owners. A careful assessment of alternative
methods for achieving waste should be identified by project planners during
this step.
5-4
-------
5.1.4 Perform Detailed Waste Analysis
A more accurate and/or updated evaluation of the waste that would supply
the proposed facility is an important Phase II activity. This need not
involve a costly weighing and sampling program at local landfills. It is
becoming increasingly acceptable to estimate quantities of residential and
commercial solid waste using population data and assuming a per capita waste
generation rate of 1,000-1,200 pounds per year. Further assumptions can be
made with respect to characteristics such as energy, moisture, and ash
content, using national averages. The industrial component of the waste
stream should be quantified and characterized separately through a survey
and/or site visits of industrial facilities within the community.
5.1.5 Perform Risk Assessment
A full understanding of the risks associated with implementing and
operating a resource recovery facility by all the participants in the project
is critical to assure that a meaningful concensus regarding the structure of
the project is reached. The term structure refers to the nature of the legal
agreements with respect to the sale of energy, delivery of waste, guarantees,
procurement, financing, facility operation, and management. Familiarity with
these risks will' encourage the development of preliminary agreements which
are both realistic and fair and can be converted into signed contracts in
Phase III with a minimum of difficulty. Risks in resource recovery can be
categorized into four general areas:
Risks Involving Waste Supply. Any changes in the anticipated quantity
or composition can have a dramatic effect on the economic viability of
the project. If the quantity of waste or its energy content is less
than expected, then less energy can be generated, resulting in less
revenues from the sale of energy. If the composition changes such
that a proportion of the waste is unprocessable and must be land-
filled, the project's costs for residue disposal rise. Changes in the
waste stream can occur due to changes in consumer behavior, withdrawal
of one or more jurisdictions from the project, and competition from a
cheaper disposal site.
Risks Involving Markets. Reduction in the price of competing sources
for the energy that the facility sells will depress the revenues for
energy sales. In addition, the user of the recovered energy could go
out of business or close the plant using the product(s).
5-5
-------
Risks Involving Facility Construction. Delays in facility construc-
tion and start-up as well as unanticipated increases in the cost for
key items of equipment can result in cost overruns. In addition, the
generation of revenues (from energy sales and tipping fees) to cover
the debt service would be delayed, increasing financing costs.
Risks Involving Facility Operation. The technical reliability of the
facility is essential to the economic success of the project. Unless
system availability targets are met, costs incurred for the disposal
of wastes which cannot be processed and the resulting loss of revenues
from energy sales could seriously undermine the economic viability of
the project.
Higher operating costs could be caused by inflationary pressures
(causing them to increase at a faster rate than energy revenues) or by
lower than anticipated labor productivity.
The health and safety of the project labor force and the facility
itself could be jeopardized by the presence of explosives, or radio-
active or chemically dangerous chemicals in the incoming wastes. This
could result in costly unscheduled down-time and increase the
project's insurance costs.
The remainder of Phase II is devoted largely to determining how these
risks should be managed. The following steps: Select Financing Approach,
Select Procurement Approach, and Determine Waste Supply Strategy; should
represent an integrated effort to allocate the risks of the project among the
participants in a rational manner. In general, it is a good idea to allocate
a risk to that party which is best able to control that risk. However, one
cannot expect a risk to be accepted by any party without an economic
incentive.
For example, a community may be very concerned that the system it
acquires operates properly and meets the desired performance specifications.
As the system vendor is in the best position to control this particular risk,
the community could decide to procure the system via the 'turnkey1 approach
whereby the system vendor is responsible if the system does not meet the
agreed upon specifications; however, the vendor would demand a higher price to
assume this risk (to cover his costs of posting performance bonds and/or for
making modifications during shakedown).
5-6
-------
5.1.6 Secure Market Commitment
The purpose of this step is to develop a basic understanding
with the proposed energy market regarding the terms of the energy
purchase agreement. The issues which should be addressed at this stage
include:
Quantity and characteristics of the energy product;
Delivery schedule;
Price;
Formula for price escalation;
Contract duration;
Contract termination; and
Responsibility for providing back-up energy during facility down-time.
In most instances, it would be useful to develop a draft contract at this
stage. In all cases, a strong written commitment should be solicited from the
proposed market indicating its intent to enter into a contract to purchase the
energy produced by the facility.
5.1.7 Select Financing Approach
There are a variety of ways to finance resource recovery facilities which
a community should examine carefully to determine their relative merits. The
capital intensive nature of resource recovery generally requires the issuance
of tax-exempt municipal bonds. A municipality can issue either general
obligation (G.O.) bonds, which are backed by its full faith and credit, or
revenue bonds, which are secured by the anticipated revenues (tipping fees and
energy sales) from the facility. For a community with a very good bond
rating, the G.O. bond will give the lowest interest rate. Since, in theory,
revenue bonds are not secured by the taxing authority of the municipality,
they come under very close scrutiny of the investment banking community to
ensure key project elements (particularly contracts) are in place. In
practice, however, the investment banking community also requires that one or
more of the participants in the project guarantees repayment of the bonds.
5-7
-------
Recently, creative financing approaches have been introduced to overcome
the unfavorable early-year economics of most resource recovery projects. In
the early years, high operating costs can be defrayed by the payment of
interest only on the debt or by increasing the initial capital investment to
set up an escrow account for this purpose. In later years, due to the
increase in energy revenue and inflation, the project will be in a position to
support higher debt service payments.
Private equity financing of an entire project is uncommon due to the low
return on investment inherent to resource recovery; however, some private
equity participation in a project can result in lower financing costs. In
return for this direct equity contribution, the system vendor can receive the
Federal tax benefits (energy and investment tax credits and tax depreciaiton)
for the entire facility, which effectively reduces the size of the debt that
must be serviced through revenues. A similar reduction in overall financing
costs can be achieved through a leveraged lease arrangement which enables a
third party to receive these tax benefits.
5.1.8 Select Procurement Approach '
Resource recovery projects can be procured through three basic
approaches:
A&E Approach. The architect and engineer (A&E) approach is the tradi-
tional method of procuring public works projects. It normally
involves two separate procurements: one for engineering services for
facility design, including facility design and equipment selection,
preparation of competitive bid specifications, and construction
supervision, and a second for construction and equipment installation.
Turnkey Approach. In this approach, the city contracts with a single
contractor for a complete package including facility design, construc-
tion, equipment supply, and start-up. The contractor is required to
satisfy various acceptance criteria in turning over to the community a
fully operating facility. This approach can be modified to have the
contractor operate the facility.
Full-Service Approach. The third option involves total implementa-
tion, operation, and possible ownership of the facility by a private
firm. In this case, the contractor is retained to provide a service
rather than a facility, and his responsibilities include financing,
contracts for energy sales and waste delivery, and operation. The
contractor may own the facility outright or lease it from the
municipality.
5-8
-------
The A&E approach is sometimes referred to as a competitive procurement
process since the contracts for construction and equipment are awarded to the
lowest responsive bidder. In contrast, the turnkey and full-service
approaches are negotiated procurements which are perhaps better suited to
systems which are difficult to specify in advance; however, these approaches
are sometimes restricted by state laws requiring competitive bidding on the
terms of price. Although the A&E approach gives the community the greatest
control over the nature and quality of the facility implemented, it also
requires that it bear the greatest share of the risks, including many of those
associated with system performance. Consequently, the trend in resource
recovery procurement in recent years has been towards negotiated procurements,
mainly because a considerable share of the risk can be transferred to the
contractor particularly those which he is in the best position to control.
5.1.9 Develop Waste Supply Strategy
Under this step, a strategy to ensure the delivery of sufficient solid
waste to the facility must be developed. In many cases, waste flow control is
not an issue, particularly where the existing collection and disposal system
is operated by the community; however, if there is significant private sector
involvement in collection and/or if alternative disposal sites are available
within reasonable hauling distance, obtaining control of the waste can be
critical for project success.
Although a community may have the authority to pass an ordinance requir-
ing disposal of waste at a designated facility, such an ordinance is difficult
to enforce effectively. In order to successfully control the waste, it is
necessary that the resource recovery facility is economically attractive to
private haulers. One means of achieving this is to charge all solid waste
generators a "user's fee" for the facility through a direct tax levy and elim-
inate the tipping fee at the facility. A second approach is to subsidize the
tipping fee at the facility out of general tax revenues.
5.1.10 Perform Environmental Assessment
If an environmental impact assessment of the project is required, it
should be performed during Phase II. Even if it is not required, it may be
5-9
-------
advisable to generate some information regarding environmental issues, such as
air pollution and impacts on local traffic, that will be of concern to the
public. In addition, requirements for environmental permits should be identi-
fied at this time.
5.1.11 Proceed/Stop Decision
Based on a review and update of the feasibility study, the outcome of the
preliminary discussions with project participants on the structure of the
proposed project, and the environmental assessment, a decision whether to
proceed with the project should be made.
5.2 PHASE III - PROCUREMENT
Phase III represents the final steps that must be taken before a project
can proceed to construction. It includes the selection of the system vendor
or the A&E and construction contractors, execution of all contracts, securing
of all necessary permits, and the raising of the capital necessary to finance
the project.
The steps necessary to accomplish Phase III will vary depending on the
procurement approach chosen, as indicated in the planning model (see Figure
5-1). The selection procedure for the contractor or contractors to design and
construct the facility in the competitive (A&E) procurement approach differs
from that of the negotiated approaches (turnkey/full-service). The steps
involving the finalization of contracts, securing permits, and project
financing are similar for all procurement approaches.
5.2.1 Project Management
At the outset of Phase III, it is necessary to identify the steps that
are necessary to achieve procurement and to set a schedule for their comple-
tion. Also, the resources necessary to perform these steps should be identi-
fied and acquired. In addition to the community's in-house management needs,
the following consulting or financial services may be required:
Bond counsel;
Investment banking firm;
5-10
-------
Management/engineering consulting firm; and
Legal counsel.
The bond counsel and investment banking firms will be required in order to
prepare the financing plan for the project and in issuing and marketing bonds.
Management and/or engineering consultants can provide valuable assistance in
reviewing proposals and negotiating contracts with system vendors and energy
purchasers. Outside legal counsel may be necessary to review contracts and to
provide advice on other legal issues (e.g., waste flow control ordinances).
5.2.2 Turnkey/Full-Service Approaches
The steps comprising the procurement of a resource recovery system by the
turnkey and full-service approaches are essentially the same, differing only
in the nature of the contract that is executed between the implementing agency
and the system vendor.
5.2.2.1 Prepare and Issue RFP
A detailed request for proposals (RFP) must be prepared and issued to
interested and/or qualified system vendors. (In order to limit the number of
proposals that must be evaluated, these firms may be pre-screened by solicit-
ing qualifications statements and eliminating those firms which are determined
to be unqualified to provide the desired system.) The RFP should contain as
much information as possible about the proposed project in order to ensure
that the proposals are responsive to the community's requirements. In partic-
ular, the RFP should specify the requirements pertaining to technical perfor-
mance, management, economics and financing, contractual considerations, and
environmental and aesthetic considerations.
5.2.2.2 Review and Select Contractor
The community should assemble a review committee composed of public
officials and interested citizens (i.e., city/county engineer, public works
director, treasurer, counsel, etc.) with the necessary skills to evaluate the
proposals submitted by system vendors. In most cases, it is advisable to
5-11
-------
retain technical consultants to assist the committee in evaluating the
proposals.
The outcome of this step should be the selection of one or perhaps two
system vendors with whom the community will engage in contract negotiations in
the following step.
5.2.2.3 Negotiate and Sign Contracts
In this step, a contract with a system vendor to provide a system is
negotiated and signed. A recent trend in resource recovery system procurement
has been competitive negotiation whereby the community enters into simultane-
ous contract negotiations with the system vendors that submit the two most
responsive proposals. In this way, the vendors are under pressure to negoti-
ate contract terms which are most beneficial to the community in order to win
the contract; however, this approach can be more time consuming than negoti-
ations with a single proposer and could delay project implementation.
5.2.3 A&E Approach
The A&E approach involves the selection of an architect and engineering
firm to design the facility, prepare bid specifications, and oversee the
construction by a separate contractor selected through a competitive
procedure.
5.2.3.1 Select A&E Contractor
In this step, qualifications statements are solicited from A&E consulting
firms familiar with resource recovery, in general, and small-scale systems, in
particular. Following review and evaluation of these statements, a firm is
selected.
5.2.3.2 Prepare Design and Bid Specifications
The A&E contractor prepares a preliminary design for the facility and
develops bid specifications for the buildings, equipment, and other components
of the designed facility.
5-12
-------
5.2.3.3 Select Construction Contractor
The selection of the construction contractor and major equipment compo-
nents is generally conducted according to established procurement procedures
(in many cases mandated by law). Usually, following advertisement, Invitation
to Bid (IFB) packages containing the specifications for the desired facility,
should be sent to interested firms. The resulting bids are evaluated on the
basis of cost and technical merits, and the lowest responsive bidder is
generally selected. On the basis of that bid, a contract is prepared and
signed.
5.2.4 Secure Contracts
In this step, final negotiations for contracts for energy sales and waste
supply should be concluded and the contracts signed. Agreements as to the
basic conditions for these contracts should have been reached in Phase II and
substantial further negotiations should not be necessary; however, it is
advisable to allow a generous amount of time, since difficulties over contrac-
tual language could delay execution of the contract, and, thus, the project.
5.2.5 Secure Permits and Satisfy Environmental Regulations
In this step, the necessary pre-construction permits identified in Phase
II should be applied for and acquired. These may include permits for air
emissions, National Pollution Discharge Elimination System (NPDES), construc-
tion, operation, and highway access.
5.2.6 Secure Financing
The capital necessary to finance construction of the facility should be
raised according to the financing approach selected in Phase II. This step
includes the following:
Preparation of a detailed financing plan by the investment banking
firm;
Preparation of a bond resolution by bond counsel;
5-13
-------
Approval of the bond issues by public officials and by referendum, if
necessary; and
Marketing of the bonds.
Once this step has been completed, facility construction can begin.
5-14
-------
APPENDIX A
WORKSHEETS
-------
WORKSHEET 1
Preliminary Estimation of Community Waste Generation
Waste generation can be estimated using a variety of techniques. If an
estimate of community wraste generation in tons per year (TPY) is available
from refuse weighing data, landfill records, or another reliable method, enter
figure on Line 2. If such sources of data do not exist, the following
methodology will provide an estimate of waste generation, based on a national
per capita waste generation rate.
1. Enter population of community (include all of the
area to be served by the disposal facility) Persons
2. Multiply Line 1 by 0.5 tons/capita/year to obtain
waste generation in TPY TPY
-------
WORKSHEET 2
Estimation of Remaining Landfill Capacity/Life
The determination of remaining life of the currently used landfill is an
important screening consideration in evaluating resource recovery feasibility.
If there is suitable land disposal capacity available, then resource recovery
is probably not a viable alternative.
The estimation of remaining landfill capacity and subsequently the number
of years that the landfill can be used is dependent upon the available volume
of unused landfill and the current annual waste generation rate. The follow-
ing steps provide the methodology for determining the remaining life of land-
fill.
1. Enter unfilled area in acres remaining at existing
landfill site acres
2. Enter average depth of fill in feet feet
3. Multiply Line 1 by Line 2 to obtain remaining
landfill volume acre-
feet
4. Multiply Line 3 by 646* tons per acre-foot to obtain
remaining capacity of landfill tons
5. Divide Line 4 by annual waste generation in TPY
(Worksheet 1, Line 2) to obtain remaining life of
landfill years
*Based on in-place density of refuse of 0.5 ton/cu. yd., refuse to cover
value ratio of 4:1 and conversion factor of 1615 cu. yd./acre-foot, i.e.
(0.5 ton/cu. yd. x 1615 cu. yd./acre-foot x 4/5).
-------
WORKSHEET 3
Estimation of Energy Production (Continued)
The flexibility of Configuration I is achieved at the cost of efficiency, the
turbines have a larger total capacity, yet will be driven by the same quantity
of steam, and turbine efficiency decreases with throughput. Worksheet Figure
3-1 is provided for the determination of electricity generation for each
cogeneration configuration depending on the quantity of excess steam
available. Worksheet Table 3-1 is included to facilitate the calculation of
electricity and steam production for cogeneration.
A. Steam Production
Enter annual waste generation in TPY
(Worksheet 1, Line 2)
Calculate annual processable waste quantity as
95 percent of Line 1
Determine daily processable waste quantity by
dividing Line 2 by 250 days per year (assuming
5 operating days per week, 10 holidays per year)
Enter appropriate steam rate (thousand pounds
per ton of MSW):
5.1 thousand Ibs/ton for process steam
(150 psi saturated)
4.7 thousand Ibs/ton for electricity
generation or cogeneration (600 psi, 600ฐF)
Multiply Line 3 by Line 4 to obtain daily
marketable steam production
Multiply Line 5 by 250 to obtain annual steam
production. Enter here and, if steam production
only is being considered, on Line 24 also.
B. Electricity Generation
Multiply Line 6 by 65.0 KWH/thousand Ibs. to
obtain maximum annual electricity generation
TPY
TPY
TPD
thousand
Ibs/ton
thousand
Ibs/day
thousand
Ibs/yr.
KWH/year
-------
WORKSHEET 3
Estimation of Energy Production
The amount of energy that can be produced from MSW is important in
comparing the compatibility of the energy demand of a potential market and the
waste quantities available in the area. This Worksheet provides a methodology
for calculating both steam and electricity production from a given quantity of
municipal solid waste (MSW). If steam production is being considered, then
Section A of this worksheet should be completed. If electricity generation or
cogeneration is to be considered then Sections B and C, respectively, should
also be completed.
To calculate energy production, it is necessary to make assumptions
regarding the heating value of the refuse (4,500 BTU/lb.), thermal efficiency
of the boiler (60%), and condensate return conditions (75% at 200ฐF). The
conditions of the output steam were assumed to be 150 psi saturated for
heating or process applications and 600 psi superheated (600ฐF) for elec-
tricity generation or cogeneration. For electricity generation, the use of a
single condensing turbine generator was assumed. Although a variety of
turbine types and configurations could be used in cogeneration depending on
site-specific considerations, it was assumed that the most common application
would be where stea:n is the primary energy output and excess steam would be
used to generate electricity. This would require a configuration involving
back-pressure turbine and condensing turbine generators in parallel. The
steam supplied to the market would be throttled' to process/heating conditions
(150 psi, saturated) via the back-pressure turbine,, resulting in the
generation of more electricity. Excess steam would be used to drive the
condensing turbine generator, which would extract as much energy as possible
from the steam in the form of electricity, and return condensate directly to
the boiler. Two configurations are considered depending on the availability
of excess steam:
Configuration I - would accomodate a maximum of 75% of the total steam
production in the condensing turbine generator.
Configuration II - would accomodate a maximum of 50% of the total
steam production in the condensing turbine generator.
-------
WORKSHEET 3
Estimation of Energy Production (Continued)
8. Calculate average annual electricity generation
as 95% of Line 7 to allow for turbine down-time.
Enter here and on Line 25.
9. To obtain daily electricity production, divide
Line 8 by 250 days per year.
10. To obtain system capacity, divide Line 9 by
24 hours per day.
C. Cogeneration
11. Enter average daily steam production from Line 5
for every month under Column A on Worksheet
Table 3-1.
12. Enter the proposed market's average daily steam
demand for each month under Column B.
13. For each month, enter in Column C the average
daily steam sold (A or B, whichever is lower).
14. Calculate average daily excess steam available
(A minus C) for each month and enter in Column D.
15. Calculate percent excess steam (D/A x 100) and
enter under Column E.
16. Select system configuration (50% or 75% maximum
excess steam) based on Column E. If excess steam
is significantly greater than 50% in more than
one month, use configuration to accomodate a
maximum 75% excess steam. Otherwise use 50%
excess steam configuration.
17. Using Worksheet Figure 3-1, determine the
electricity generation rate (KWH/thousand Ibs.
steam) for each month, based on excess steam
availability (Column E) and system configura-
tion (50% or 75% maximum excess steam).
Enter in Column F.
KWH/year
KWH/day
KW
-------
WORKSHEET 3
Estimation of Energy Production (Continued)
18. To calculate average daily electricity
generation, multiply average daily steam
production (Column A) by the electricity
generation rate (Column F) for each month
and enter in Column G.
19. To calculate average monthly electricity
generation, multiply average daily
electricity generation (Column G) by average
operating days per month (Column H) for
each month and enter in Column I.
20. Total Column I to obtain annual electricity
generation (KWH/year). KWH/year
21. Calculate marketable electricity production
as 95% of Line 20 to allow for turbine down-
time. Enter on Line 25.
22. Calculate monthly marketable steam production
for each month by multiplying average daily
steam sold (Column C) by the average operating
days per month (Column H). Enter in Column J.
23. Total Column J to obtain annual steam
production. Enter on Line 24.
D. Summary of Energy Production
24. Annual marketable steam production. thousand
Ibs/year
25. Annual electricity generation. KWH/year
-------
Worksheet Figure 3-1
Electricity Generation from Cogeneration Systems
-0 4ฐ
c
0
Q.
TJ
KWH/Thoi
$ 8
ou
/O
on
10
,
'
/
/
/
^
/
^
4
f
V
r
/
'
y
'
/
r
/
/
/
f
/
f
/
$
/
4
f
I
A
\T
/
t
f
ซr
y
/
f
^ป-4
A
f
/
mm-
f
/
mmm
/
/
n*
/
f
^M
>
'
4PB
^
t ซ
J^
*
m
<*\
/
r
y
r
Configuration 1
(75% Maximum
I t
Configuration II
(50% Maximum
y
f
t
f
^m
/
P *
Excess
Excess
>
f
,
/
P
^
|r
MBป
Steam)
I
Steam)
<
^
10
20
30
40
50
60
70
Excess Steam
-------
c
LU
O
X
in
CD
ฃ
c
o
O)
Ol
ซc
01
^
x
^
10
Q
Ol
<
>
t
O
L_
^
(J
LU
o:
<
O)
*
O)
*
O!
>
^
ly Marketable
.c
c
o
ฃ
O)
c
V
10
1.
CD
Q.
0
C
CD
C3
O
_
UJ
c
0
(0
L.
_
10
o
^
10
0
ID
ฐ
_
10
Q
O
a.
E
ID
CD
C
0>
ฐ
u
Q)
UJ
s
fc
(0
^^
X
^
~
ID
10
cr
E
ID
4)
to
I/I
in
Q)
O
X
UJ
E
t-
in
e
10
CD
t-
00
E
ID
CD
4-
3.) (Thous. Ibs/mo.)
E
X
2
g-
in
ID
T3
in
3
0
_4_
^^
X
^
~
E
g
4-
^
o
to
c
i
ID
Q
T3
O
CL
^
VI
n
.
in
O
1-
in
3
f~
K
in'
1
I
in
3
0
t
J_
ID
^
in
n
ID
T3
in
ฃ
ID
13
in
ID
o
in
n
|
CS
CL
LU
in
o
UJ
Q
-------
WORKSHEET 4
Calculation of System Size
In the previous worksheet, a methodology was presented to compute the
quantity of steam that can be produced by the resource recovery system.
Whereas this figure is important to identifying a compatible energy market,
the system size is important to designing and costing the facility. Of course
the type and quantity of steam that must be produced is important to facility
design, but for the purposes of this feasibility analysis, the system size
will determine subsequent economics. The following methodology incorporates a
10 percent increase in the previously determined daily processable waste
quantity of Worksheet 3. This increase provides an assurance of adequate
capacity for variations in waste generation without excessively oversizing the
system resulting in large excess costs.
1. Enter daily processable waste quantity
(Worksheet 3, Line 3) in TPD TPD
2. Multiply Line 1 by 110% (to assure adequate
capacity to accomodate peak waste generation)
to obtain system size for subsequent calculations TPD
-------
WORKSHEET 5
Estimation of Capital Costs
This Worksheet provides the means to estimate the base capital costs for
a system given its capacity (TPD) and the energy products produced: steam,
electricity or both. The curves shown in Worksheet Figure 5-1 represent
generic base capital costs for modular combustion systems and include land,
site development, buildings and equipment, and all engineering and legal fees.
These costs were finalized in December, 1981, when the Chemical Engineering
Plant Cost Index was 305.3 (preliminary). This index, or equivalent, should
be used to update capital costs to current time.
1. Enter system size (Worksheet 4, Line 2). TPD
2. Using the system size, find the estimated base
capital costs from Worksheet Figure 5-1 using
the appropriate curve (steam production,
electricity production, or cogeneration). $
3. Calculate start-up and shake-down cost as
10% of Line 2. $
4. Obtain capital costs by adding Lines 2 and 3. $
5. Update Line 4 to current year by multiplying by
X/305.3, where X = current CE Plant Cost
Index published by Chemical Engineering. $
6. Escalate costs to ground-breaking by
multiplying Line 5 by (1 + i) where i = rate
of inflation. $
-------
20-
o
tn
O
O
a
CD
O
as
CD
18-
17-
16-
15
14-
13-
12-
11-
10
8-
7-
5
4
3-
Worksheet Figure 5-1
Base Capital Costs
J
7
z
0 50 100 150 200 250 300 350 400 450 500
System Capacity (TPD)
-------
WORKSHEET 6
Estimation of Debt Service
The annual costs of a facility consist of two components: the debt
service or annualized capital cost and the annual operating and maintenance
(O&M) costs. The first of these is the payback of borrowed capital and any
associated interest, and is a function of the financing approach, the bond
interest rate and the loan term. Three financing approaches are considered by
this guide: revenue bonds, revenue bonds with 25% equity participation, and
general obligation (G.O.) bonds. If the appropriate financing approach cannot
be determined, revenue bond financing should be assumed. The interest rate
assumed for this analysis should reflect the current rate for the type of
bonds to be issued and the credit rating of the issuing municipality or
agency. If unknown, rates of 11% and 13% should be assumed for G.O. and
revenue bonds, respectively. The loan term should be equal to the planned
life of the project or the term of the energy purchase agreement, whichever is
less. If unknown, a loan term of fifteen years should be assumed.
The debt service multipliers shown in Worksheet Table 6-1 enable debt
service to be calculated from the capital cost estimate developed in Worksheet
5. These multipliers include financing during construction, underwriter's fees
(1.5% and 3.5% of total bond issue for G.O. and revenue bonds, respectively), and,
for revenue bonds, debt service reserve (one year's debt service) less the income
from the investment of this reserve, assuming a return on this investment equal to
the bond interest rate.
1. Enter escalated base capital cost
(Worksheet 5, Line 6) $
2. Enter bond interest rate and loan term. %
yrs .
3. Using the bond interest rate and loan term, obtain
the annual payment multiplier for the selected
financing approach from Worksheet Table 6-1
4. Multiply Line 3 by Line 1 to obtain the debt
service
-------
CO
13
O
pa
*
CO
h
CO
01
>>
o
CNI
iitiincNi<iincNicNj
OrI iliIr-llI .1.i rItI iI IiiliI It 1I CSI
> I vO CN Is- Cปl ON m i iOOincNC^vC-3-CNiO^
cNcNt^c^^^invovor^oowoNO'-'CNicNi
r-li-Hi-lrHi-lr-lrHi-li-li-tt-)i-HI-leNซNซMeM
m CNI CN r~-
I
sO
J
m
H
W
W
CO
ง
CO
l-l
0)
o
H
01
CO
cu
o
a
05 <*
a o
C -H
O 4J
01
D
C
0) D
W
in
5
O
CN1
*
CO
i-l
co
~ I
i It (i Ii I
i IrHCSJtNtNCSJCMCMrsI
CNCN CNCNCNCNCNCNCNfOCO
ili(i(?It-Hflili(iIrHiItItIr-ICNJCNICNICN! CNICNlCNICNICNjmfOCOn
CMCNCSCNCSICNCJCNl
CU
4-1
ซ
CO
Ol
tJ
0)
omomomomomomomomom omomomomo
E
l-/
cu
a
c
o
pa
n)
O
-------
WORKSHEET 7
Calculation of Annual Operating and Maintenance Costs
Operating and maintenance (O&M) costs, the day-to-day costs necessary to
keep the facility operating, are a component of the annual cost of a facility.
The many individual contributing costs to the total O&M cost are included in
the following worksheet.
1. Enter quantity of processable waste (Worksheet 3,
Line 2) TPY
Calculate each of the following cost components:
2. Labor
2a. Enter labor costs from Worksheet Figure 7-1 $
2b. Overtime (10 percent of Line 2a) = $
2c. Benefits (30 percent of Line 2a) = $
2d. Add Lines 2a, 2b, and 2c to obtain annual
labor costs $
2e. Escalate Line 2d to current year by
multiplying by X/281.5, where X = current
Consumer Price Index for All Urban
Consumers (CPI-U) $
3. Maintenance - Calculate as 1.2% of base capital
costs (Worksheet 5, Line 5) $
4. Electricity*
4a. Multiply 30 KWH/ton by Line 1 to obtain total
annual electricity usage KWH
4b. Multiply Line 4a by local electricity rate
($/KWH) to obtain annual electricity costs.
(if local electricity rates are not available,
use general rate of $0.06/KWH) $
*0mit if planned facility will generate electricity.
-------
WORKSHEET 7
Calculation of Annual Operating and Maintenance Costs (Continued)
5. Auxiliary Fuel**
5a. Multiply Line 1 by 2.2 gal/ton (for No. 2
fuel oil) or 0.3 thousand cu. ft. (for natural
gas, if available) to obtain annual auxiliary
fuel usage gal. or
thousand
cu. ft.
5b. , Multiply 5a by local cost for No. 2 fuel oil
($/gal.) or natural gas ($/thousand cu. ft.)
to obtain annual auxiliary fuel costs $
6. Rolling Stock
6a. Multiply 0.3 gallon #2 diesel/ton by Line 1 to
obtain yearly gallons gallons
6b. Multiply Item 6a by local diesel costs ($/gal)
to obtain annual rolling stock costs $
7. Water
7a. Multiply 0.2 thousand gal/ton by Line 1 to
obtain the total annual water consumption thousand gal
7b. Multiply Line 7a by local water costs
($/thousand gal) to obtain annual water
costs. (If local water costs are not
available, use general rate of
$0.30/thousand gal.) $
8. Residue Disposal
8a. Multiply Line 1 by 0.4 to obtain annual
quantity of residue TPY
8b. Multiply line 8a by estimated residue
disposal cost per ton to obtain annual
residue disposal cost*** $
** Some modular incinerator systems do not require auxiliary fuel.
***The cost of residue disposal, including transportation, will vary
considerably according to local circumstances. Although this material is
easily landfilled, state regulations may require disposal in a secure
landfill which would increase costs considerably. If the community intends
to operate its own disposal site for residue, use disposal cost of $5/ton
(or $12/ton for secure disposal) .
-------
WORKSHEET 7
Calculation of Annual Operating and Maintenance Costs (Continued)
9. Insurance (1% of base capital cost -
Worksheet 5, Line 5) $
10. Maintenance reserve (1% of base capital cost -
Worksheet 5, Line 5) $
11. Total annual O&M Costs (Add Lines 2e, 3, 4b, 5b,
6b, 7b, 8b, 9, and 10) = $
-------
Worksheet Figure 7-1
Labor Cost Estimate
400
350
300
to
o
o
(0
O
(J
o
J3
(O
100
50 100 150 200 250 300 350 400 450 500
System Capacity (TPD)
*Cost estimates based on labor requirements and rates shown in Table 7-1.
-------
r-H
ri.
u
i^
PC
H
H
w
w
CO
W
p^
g
**^
CO
,
Ol -^
C CU
+
CO
CO
Ol
CJ
v4
l_t
CM
*1 1
4-J
f-4 "^3
a c
H CO
4J CO
CJ CU
CU *
-H Ij
_l
l-i to
O c/;
fc -X
* -X
u
3
E
co
to
>-ป
^
^
CO
>
o
o
0)
4J
U
0)
a
CD
01
c
CO
o
l-i
CU
E
3
CO
C
O
u
CU
w
c
O'
f
5
ซ
F-H
00
^
r-H
jj*
OJ
J^
e
o
0)
o
"^
ซ-H
CC
CO
to
3
-------
WORKSHEET 8
Estimation of Revenues for Energy Sales
The revenues from sale of recovered steam and/or electricity must reflect
the price that energy buyers are willing to pay. This information, generally
obtained through the market survey (Appendix B), will be based upon the
market's existing energy production or purchase costs. Since the resource
recovery system will be displacing a fairly steady energy source, a price
discount is often included as an incentive for a long-term contract. Revenues
from sale of energy can be calculated as follows:
1. If steam will be sold, enter annual marketable
steam production from Worksheet 3, Line 24
2. Enter price for steam which market is willing
to pay*
3. Multiply Line 1 by Line 2 to obtain annual
steam revenues
4. If electricity will be sold, enter annual
electricity generation from Worksheet 3, Line 25
5. Calculate in-house usage by multiplying annual
quantity of processable waste (Worksheet 3,
Line 2) by 30 KWH/ton
6. Subtract Line 5 from Line 4 to obtain net
annual electricity production
7. Enter price for electricity sold
8. Multiply Line 6 by Line 7 to obtain annual
electricity revenues
9. Add Lines 3 and 8 to obtain total annual
revenues
thousand
Ibs/yr.
$ /thousand Ibs
_ KWH/yr
_ KWH/yr
_ KWH/yr
/KWH
*If not known, estimate price based on market's avoided fuel costs minus a 15%
discount as an incentive to enter into a long-term contract.
-------
WORKSHEET 9
Net Annual Costs - Initial Year (Year 0)
Any economic evaluation of resource recovery feasibility should involve
the assessment of cost over the entire planned life of the facility. A
first-year economic analysis will not accurately reflect the economic
performance of a facility in comparison to other disposal alternatives. The
worksheets that follow provide a methodology for performing a life-cycle cost
analysis based upon a cash-flow analysis. Each of these worksheets provides
the means for calculating key steps of the life-cycle cost analysis.
This worksheet supplies the steps necessary to update the facility costs
estimated in previous worksheets to the initial year of operation. This is
essential since the actual first year of facility operation is a minimum of
3 years from the initial planning phase. For the purposes of this method-
ology, it is recommended that the start of construction be assumed at 2 years
and operation at 4 years from the time of this feasibility analysis.
1. Enter debt service (Worksheet 6, Line 4) $
2. Enter annual O&M costs (Worksheet 7, Line 11) $
3. Escalate O&M costs to Year 0 by multiplying
Line 2 by (1 + i) , where i = the inflation rate $
4. Calculate gross annual operating costs in Year 0
by adding Lines 1 and 3 $
5. If steam will be sold, enter revenues from sale
of steam (Worksheet 8, Line 3) $
6. Escalate steam revenues to Year 0 by multiplying
Line 5 by (1 + e) , where e = escalation rate for
steam revenues (where unknown, use escalation
rate for displaced fuel) $
7. If electricity will be sold, enter revenues from
sale of electricity (Worksheet 8, Line 8)
8. Escalate electricity revenues to Year 0 by
multiplying Line 7 by (1 + e) , where e = escalation
rate for electricity
-------
WORKSHEET 9
Net Annual Costs - Initial Year (Year 0) (Continued)
9. Calculate total revenues in Year 0 by adding
Lines 6 and 8 $
10. Calculate net operating costs by subtracting
Line 9 from Line 4 $
11. Enter total processable waste quantity in TPY
(Worksheet 3, Line 2) TPY
12. Obtain net cost per ton in Year 0 by dividing
Line 10 by Line 11 $ /ton
-------
WORKSHEET 10
Life-Cycle Costs - Resource Recovery Alternative
The life-cycle costing for the resource recovery alternative presented in
this worksheet projects costs and revenues in constant dollars for 5-year
intervals through the planned life of the resource recovery facility. Work-
sheet Table 10-1 is a tabulation sheet to be used in conjunction with this
worksheet in developing the net cost per ton for each 5-year interval.
1. On Worksheet Table 10-1, enter the following
cost items from Worksheet 9 on the lines
under Year 0:
Debt service (Enter Line 1 from Worksheet 9
on Line a)
Annual O&M costs (Enter Line 3 from
Worksheet 9 on Line b)
Steam revenues (Enter Line 6 from Worksheet 9
on Line e if steam will be sold)
Electricity revenues (Enter Line 8 from
Worksheet 9 on Line f if electricity will
be sold)
2. Calculate quantity of unprocessable waste by multi-
plying total waste quantity (Worksheet 1, Line 2)
by 5% TPY
3. Calculate cost for landfill disposal of unprocess-
able waste by multiplying Line 2 by disposal cost
per ton, using an estimate for disposal cost
($ per ton) developed according to guidelines
presented in Section 4.4. $
4. Update the cost for unprocessable waste disposal
to Year 0 by multiplying by (1 + i) , where
i s rate of inflation. Enter on Line c under
Year 0.
5. Calculate gross annual costs for the resource
recovery alternative by adding Lines a, b, and c.
Enter on Line d under Year 0.
6. Calculate total revenues by adding Lines e and f
and entering the total on Line g under Year 0.
7. Calculate net annual costs by subtracting Line g
from Line d. Enter on Line h under Year 0.
-------
WORKSHEET 10
Life-Cycle Costs - Resource Recovery Alternative (Continued)
8. Enter inflation rate (see Section 4.6.5.1)
9. Enter escalation rate(s) for energy revenues
(see Section 4.6.5.1)
10. Enter debt service from Year 0, Line a, under
ซach interval (Year 5, Year 10, ... etc.)
11. Calculate the O&M for each 5-year interval
(Year 5, Year 10, ... etc.) by multiplying
Year 0, Line b, by (1+i) , where i = inflation
rate (Line 8) and n = interval year. (For example:
for i * 7%, multiply Line a by (1 + .07) for
Year 5.) Enter on Line b for each 5-year interval.
12. Calculate landfill cost for each 5-year interval
by multiplying Year 0, Line c, by (1+i) , where
i = inflation rate (Line 8) and n = interval year.
Enter on Line c for each 5-year interval.
13. If steam will be sold, calculate steam revenues at
each 5-year interval by multiplying Year 0, Line e,
by (1 + e) where e = escalation rate (Line 9) and
n = interval year. .(.Example: for e = 5%, multiply
Line e by (1 + .05) for Year 10.) Enter on Line e
for each 5-year interval.
14. If electricity will be sold, calculate electricity
revenues at each 5-year interval by multiplying
Year 0, Line f, by (1 + e)v where e = escalation
rate for electricity (Line 9) and n = interval year.
Enter on Line f for each 5-year interval.
15. For each 5-year interval, calculate the gross
annual costs by adding Lines a, b, and c. Enter
on Line d.
16. Calculate toal revenues for each 5-year interval
by adding Lines e and f and enter totals on
Line g.
17. For each 5-year interval, calculate net annual
costs by subtracting Line g from Line d. Enter
on Line h.
(steam)
%
(electricity)
-------
WORKSHEET 10
Life-Cvcle Costs - Resource Recovery Alternative (Continued)
18. Enter total waste quantity in T?Y (Worksheet 1,
Line 2) on Line i under Year 3 a:i:l each 5-year
interval.
19. For Year 0 and each 5-year interval, calculate
net cost per ton by dividing Line h by Line i.
Enter on Line j.
20. Calculate net cost per ton in current dollars by
multiplying Line j under each interval year by
(1 + i) , where i = inflation rate and
n = interval year * '-> (i.e. number of years from
current time to interval year under consideration)
Enter on Line k.
-------
o
CN
1-1
to
01
H
U
R)
C
(0
HI
0)
I
o
3)
1-1
co
m
o>
o
M
3
o
CO
0)
as
(0
,
o
ID
01
U
'
U-i
O
v.
to
o
o
CO
3
C
C
CO
CO
o
Id
CJ
C
>-<
I
i*
41
a.
o
w
0.
0 CO
U 3
4-1
U U
a> <
z w/
-------
WORKSHEET 11
Life-Cycle Costs - Landfill Alternative
The life-cycle cost of landfilling is important to provide a comparison
with the economics of resource recovery. In general, the cost of a properly
run landfill can expect to increase with inflation, resulting in a constant
cost in real value. This of course assumes that upgrading the landfill to
meet newly instituted RCRA regulations is not necessary. Such factors should
be included in developing costs of landfill, but are beyond the scope of the
estimation and therefore not included.
1. Enter current landfill cost estimates ($/ton), developed according to
guidelines presented in Section 4.4, for year 0 and for each 5-year
interval and enter results below:
Year 0 Year 5 Year 10 Year 15 Year 20
-------
WORKSHEET 12
Life-Cycle Cost Comparison
For the sake of comparison of landfill costs with the proposed resource
recovery option, this worksheet and accompanying Worksheet Figure 12-1
provide a graphic comparison of the costs developed in Worksheets 10 and 11.
It essentially provides the means for graphing costs throughout the planning
period for easy comparison.
1. -Enter net cost per ton in current dollars for Year 0 and each 5-year
interval of the resource recovery alternative (from Worksheet 10,
Table 10-1, Line k) on the attached graph, Figure 12-1. Draw cost
curve.
2. Likewise, enter net cost per ton in current dollars for the landfill
alternative from Worksheet 11. Draw cost curve.
3. Note where these curves intersect, i.e., before or after the mid-
point of the planning period.
-------
C
o
ป- .2
^ io
* a
ฃ E
3 O
TOO
il *-
s
ฐ
cc
< o
LU ฃN
CC
< in
cc
< <=>
LU ซ-
8
8
CO
ID
I
D
O
LU
*
"61) Uฐl J8d (1!:
1S00 13N
-------
WORKSHEET 13
Sensitivity Analysis
The preceding economic analysis was based on a number of assumptions and
it is advisable to assess the impact of any deviations from these assumptions
on project feasibility. This can be done by repeating the appropriate
calculations in the preceding Worksheets using different assumptions and
recalculating tlva I if-"-cycle costs using the summary tables provided
(Worksheet Tables 13-1 through 13-5). Comparison of these sensitivities with
the base case developed in Worksheet 10 can be facilitated by plotting the
results of each sensitivity calculation on Worksheet Figure 13-1.
-------
a
o
CM
l-i
a
%
4.)
H
0
i^
4J
O
0)
il
w
ca
3
C
01
>
t 1
cfl
4J
Q
H
ca
4J
ca
0
a
14
Cfl
3
C
C
^
4J
0)
2
H
4J
C
ex
0)
4-1
en
cO
i-4
CO
3
C
5
, 1 /-v
CO >-
4-1 CM
O E"1
H ^^
C
O
l-i
0)
C-i
x^>
4-1
. -1
U-l
o
CM
*~S s \
CO-
4J
4J 4-1
efi C
O 0)
0 V4
4-1 3
a N--
-------
0 re
O rr
rr
C O
to O
I-1 CO
H
o
3
S
0)
co
rr
re
B)
Z
(H
S
c
n
o
en
ro
3
C
ns
en
(B
O
rr
rt
r-*
O
r1-
rr
^<
JO
2
re
re
co
rr
0)
i
90
n
n
9
C
0!
CO
I-I
O
CO
CO
3
C
CD
O
O
CO
rr
CO
O
i-h
9 9
"O O*
"I Hi
O r"
O I-1
(I) I-1
co
CO O
to O
cr co
ง
co
9
C
to
o
CO
to
CO
H'
CO
o
Ml
cn
m
9
CO
s;
o
Oi
to
W
3
re
to
u
s
(D
01
(B
to
1-1
to
o
-------
o
CM
CO
0)
n
I
to
a;
(-1
to
0)
g
o
4J
CO
c
o
CO
co
CO
n
0)
o
l-l
h
0)
en
(0
o
5
o
CO
3
C
C
,
4-J
.^4
O
o
4)
3
C
0)
I
VI
4-1
Cfl
O
3
C
C
4J
0)
(0
D
C
O
H
o co
O 3
tl
4J U
0) <
Z N_/
c
o
H
r<
U-J
O
JJ U
M C
O (U
O V<
(-1
U 3
-------
C rr
i-l
i-i n
(t O
3 CO
rr rr
-c/> ^*
TJ
ft
i-l
O
D
> ft)
n rr
rr
C O
(to o
I-1 CO
0
Hi
(C
I
H O
HJ rr
i-< SB
|
3
C
CD
O
O
CO
(H
3
(D
co
n
o
rr
n
90
n
n>
3
C
i
n>
re
3
01
CO
O
ft
O
CD
3
C
O
O
CO
O
Co
3
ft
3
TJ
1-1
O
o
ID
CO
co
CD
o-
0)
CO
rr
fD
3
C
0)
O
{?ป
3:
o
o
CD
I?
cr
it
(-"
r>
n
CD
CO
H-
CD
n>
3
CO
H-
K!
0)
Co
i-l
0)
to
ft
03
i-t
IO
o
-------
o
CN
u
tO
0>
en
(U
tfl
c
0)
en
o
to
H
to
to
a!
0)
u
>
en
U
43
Ol
J-l
to
g to
O to
(0
F-t 01
t O
-4 O
T3 0.
C C
to 3
M-l
O
t-l
0,
CO
O
O
3
C
-
U OH
C
O
H
I-
0)
cu
<4-4
O
4J
<0 r-l
o to
O 3
u
a; <
I
^'
-------
o ฃ
in
52
'35
_>
15
,(0
5 I
?c
- o
' M
>S
II
CO
O
O
o
O
DC
<
LU
CC
< in
uj ซ-
cc
< o
LU ซ-
cc
go
S
I
o
01
*
(SJBHOQ
61)
19N
-------
APPENDIX B
POTENTIAL ENERGY MARKET QUESTIONNAIRE
-------
POTENTIAL ENERGY MARKET QUESTIONNAIRE
From our initial information, it appears that you may be a potential user
of energy product(s) produced by a solid waste resource recovery system.
Please complete this questionnaire as comprehensively as possible, and return
vLth any further information which you feel is pertinent. Your responses will
be treated confidentially. Thank you for your assistance.
General Information
1. .Name of Organization:
2. Address:
3. Telephone Number:
4. Name and Title of Person Completing Form:
5. Type of Industry:
SIC Code:
6. Plant Operations - Shifts/Day:
Days/Week:
Weeks /Year : _
Fuel Information
7. Please indicate average daily fuel usage by month plus annual totals:
Coal Oil Gas
(tons/day) (gals/day) (mcf /day)
January _ _ _
February _ _ _
March ~ ~ '
April _ ' _ _
May _ _ _
June
August
September
October
November
December
Annual Total
-------
8. Please specify other fuel information:
Natural Gas Oil Coal
Fuel Specifications
Average Heat Content
Fuel Costs
Current Fuel Contracts
(length, etc.)
Average Annual Consumption
(specify units)
9. Please specify boiler information:
.Number of Boilers
Capacity of Boilers
Age of Boilers
Steam Specifications (Temperature )
(Pressure )
10. Please indicate energy source used for following:
Space Heating:
Electricity Generation:
Manufacturing Process:_
Refrigeration/Cooling:_
Other:
11. Costs based on fuel costs: Steam: $ /1,000 Ib.
Electricity: $ /KWH
12. Steam specifications
Purpose Temperature Pressure Percent of Total Use
a.
b.
c.
-------
13. Please specify steam requirements (indicate units):
Average Peak Demand Weekend
January
February
March
April
May
June
July
August
September
October
November
December
. Please specify electric power requirements (indicate units):
Average Peak Demand Weekend
January
February
March
April
May
June
July
August
September
October
November
December
15. Please specify potential future increases or decreases in energy
requirements.
------- |