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The Economics of Waste to Energy -- Part I


Vicki P McConnell

In this first of a two-part article, Vicki P. McConnell, Fuel Cell Bulletin contributor, looks at scavenging waste for energy, with a view of the practicalities of bioH2 for fuel cells.

Fuel cell manufacturers worldwide have been examining waste-to-energy applications (WtE, also referred to as EfW, energy from waste, and more specifically hydrogen from waste) since the early 1990s. During that time, proton-exchange membrane (PEMFC), alkaline (AFC), molten carbonate and direct carbonate (MCFC/DFC), solid oxide (SOFC), and phosphoric acid fuel cells (PAFC) have been demonstrated. Recent, promising WtE economics are resulting from biogas-fueled fuel cells that can generate multiple revenue streams at MW scale.

Compared to the hydrocarbon-based ‘dirty’ fuel options (such as flaring methane and burning coal), WtE conversion of biohydrogen (bioH2) for use in fuel cells offers the cleanest electrical power available. In many cases, fuel cell WtE installations can produce combined heat and power (CHP) onsite along with excess electricity, hydrogen, and carbon dioxide (CO2) that can be sold back to the grid and other customers.

Granted, there may still be a
‘dirty’ connotation associated with various non-hydrocarbon feedstocks, based on their unique origins in the organic waste realm. From hog farms in China to dairies in Minnesota (think manure management), food and manufacturing waste in Japan, forestry dross in Pennsylvania, to agricultural silage (such as grasses and molasses), potato peel, onion skins, pond scum (algae), chicken litter, and sewage sludge, this stuff can be mighty stinky. Yet there's no garbage in the fact that such solid waste material (some 11.2 billion tonnes per annum collected worldwide) can be converted into biomass – and from that, renewable bioH2 as a reliable fuel resource for powering fuel cells.

Beyond solid waste, existing landfills, wastewater treatment plants (WWTPs), and chemical and manufacturing plants currently emit by-product hydrogen directly or as a component of waste methane gas. Although regulated, by-product methane is often flared (burnt off), making it an unused asset and creating pollutants such as nitrous oxides. The US Department of Energy (DOE) reports that, if captured, annual domestic methane emissions from these facilities could provide an estimated 12.9 million tonnes per annum as a biofuel source, and in turn, generate around 8.3 million kg of bioH2 per day.

Furthermore, the 40 000 anaerobic digesters already operating in the US industrial sector could provide 300 million m3 (10.8 trillion cubic feet) of bioH2 and another 200 million m3 (7 trillion cubic feet) of bioH2 from landfill gas. [Anaerobic digestion occurs in oxygen-free, sealed reactors where micro-organisms break down biomass.] An estimated 15% – or 216 000 tonnes per annum – of excess hydrogen produced annually from chlor-alkali manufacturing is flared. At a 50% conversion rate to fuel cell-grade hydrogen, this biogas resource could produce 420 MW of electricity.
 
Complex value proposition
Fuel cell technology and biogas resources have the potential to create real energy gains as an alternative to the entrenched ‘burn and bury’ practices of waste handling. But scavenging renewable hydrogen from biomass and waste gas is no easy feat. Capital costs remain high, and this makes customers risk-averse.
FCB asked those interviewed here to help formulate the essence of the WtE value proposition for bioH2-fueled fuel cells. Their consensus can be stated as: achieving the highest calorific energy value, lowest emissions, and multiple revenue streams from waste-derived fuel at the most competitive price, using the least amount of feedstock.

So far, fuel cell OEMs and early adopters have found government funding incentives extremely helpful, such as investment tax credits and sustainability programme grants. These first-mover companies must also innovate creative business models, strategic partnerships, and sufficient true grit to navigate the divergent international regulatory and operating cultures required to manifest the green value in WtE applications.

Fuel cells for energy

FuelCell Energy
(FCE), headquartered in Danbury, Connecticut, has demonstrated the highest number of WtE installations to date, with its high-temperature, carbonate-based Direct Fuel Cell® (DFC®) technology. The company has DFC units in operation in Germany, Japan, Canada, South Korea, and at 15 sites in the US.

“Our first biogas plant began operation in early 2004 in King County, Washington,
’ says Kurt Goddard, Vice President of Investor Relations. ‘This 1 MW demonstration system was meant to show that megawatt-scale fuel cell equipment can operate well with renewable fuel. Our biogas installations now operating are producing about 130 million kWh of renewable and pollutant-free power annually, adequate to power about 12 000 US homes.”

Most of these DFC systems operate at 538
°C (1000°F), and utilise biogas produced onsite by anaerobic digesters coupled with appropriate gas clean-up equipment. In several projects, the purified digester gas is injected into an existing natural gas pipeline that then directs it to DFC units at other locations, hence the term ‘directed biogas.’
 
Goddard notes that biogas contains humidity, sulfur, and CO2. The sulfur and humidity are removed for the fuel cell installations using biogas onsite, whereas the CO2 must be removed for directed biogas systems because more stringent pipeline quality is required of the bioH2. ‘Otherwise, the internal reforming capability of carbonate technology tolerates CO2 as part of the fuel source,’ he explains.
 
‘This clean-up for pipeline quality is energy-intensive and adds extra cost,’ continues Goddard. ‘Over time, we have perfected blending of the biogas with natural gas to ensure consistent fuel quality and supply to the fuel cell. For example, an extended period of heavy rains can dilute the methane composition of biogas at a wastewater treatment facility for a period of time, so we can compensate with blending.’
 
FCE's four DFC300 units at the Sierra Nevada Brewery in Chico, California began operating in 2005, and now provide 1 MW of electrical power in a CHP configuration that generates 50% of the brewery's required electrical demand. This was the first bioplant to capitalise on FCE's automated fuel blending, running on both biogas from the brewery operations and on natural gas when biogas is not available.
 
One can't argue with the enhanced power plant efficiency possible with fuel cells. The fuel-to-electricity conversion ratio from two DFC300 fuel cells at Gills Onions in Oxnard, California
– the third largest fresh onion processor in the US – is reported at 47–49%. Installed in 2009 at a cost of $9.5 million (€6.9 million), this bioplant has a unique Advanced Energy Recovery System (AERS) developed by Gills Onions with partners FCE and Southern California Gas.

Approximately 363 tonnes (800 000 lb) of onions are processed daily at Gills, and create 113 tonnes (250 000 lb) of waste. The waste hauling expense is $400 000 (
€290 000) per annum. With AERS, an upflow anaerobic sludge blanket reactor recovers biogas from the fermented onion juice, and provides 75% of the plant's electricity. The processor reports 99% waste recovery, and savings of $1.1 million (€800 000) in energy and hauling costs. The 600 kW fuel cell system cost works out at $3400 (€2470) per kW installed.

From a return-on-investment (ROI) standpoint for FCE, there is certainly more to be gained at the MW level
– but every project must consider original investment, tax credits, depreciation, uncertain energy prices, and location of resources relative to demand centres. Goddard points out that an attractive and affordable cost profile for multi-MW installations with DFC technology isn't just about profit margin. “Many biogas producers, such as WWTPs, require a significant amount of electricity for their processing, so a MW-class plant is the lowest-cost fuel cell solution available,” he says.
 
So far, FCE has DFC units in 12 WWTP projects, mostly in the state of California, with fuel-to-electricity efficiency ratings up to 47% and total efficiency as high as 90% when recovered heat is considered. This includes its first directed biogas installation, in San Diego, involving three different DFC units that provide 4.5 MW capacity.

Promoting polygeneration
The first unit, a DFC300 at San Diego's Point Loma WWTP, generates the electricity for biogas purification from existing anaerobic digesters. A 1.4 MW DFC1500 fuel cell installed at the South Bay Water Reclamation Plant pumping station offers continuous baseload power, and replaces electricity purchased from the grid to support pumping operations. A 2.8 MW DFC3000 at the University of California, San Diego provides uninterrupted electrical support (about 8% of the total required) to help create a self-sufficient ‘microgrid’ for the 45 000 students on the UCSD campus.

The polygenerative nature of this FCE project and others can be seen in the multiple fuel cells used, multiple end-user network, and multiple revenue streams created. At its largest WWTP application to date, FCE sold a 2.8 MW-capacity DFC3000 fuel cell to UTS Bioenergy LLC (Encinitas, California) to provide 60% of the total power requirements for the Inland Empire Utilities Agency WWTP in Chino, California. Replacing two internal combustion engines, the DFC3000 also produces by-product heat that is used in digesters to process the renewable biogas.

FCE’s first
‘trigeneration’ bioplant began operation in 2011 as a three-year pilot project at the Orange County Sanitation District (OCSD) in Fountain Valley, California. This DFC produces 250 kW of electricity for the WWTP operations. BioH2 at 100 kg/day is used at a refueling station built at the edge of the WWTP and next to a highway on/off ramp, offering convenience to hydrogen fuel cell electric vehicles (FCEVs). Other partners in this effort include Air Products (Allentown, Pennsylvania), DOE, the University of California at Irvine and its National Fuel Cell Research Center, and the California Air Resources Board. FCE's CEO, Chip Bottone, estimates a potential US market size for trigeneration bioplants of $1.6 billion (€1.1 billion) for the industrial sector alone.
 
In early April 2014, FCE progressed to a ‘quad-generation’ WtE application in Vancouver, British Columbia. This $7.5 million (€5 million) project at Village Farms represents FCE's first use of landfill biogas to produce 300 kW of electricity, heat, 135 kg/day of hydrogen, and food-grade CO2 that can accelerate plant growth in the farm's hydroponic greenhouses. Gas clean-up for the 200 acre (81 ha) operation uses some of the hydrogen produced, and is provided by Quadrogen Power Systems of Vancouver. Other partners include National Research Council of Canada, Sustainable Development Technology Canada, and BC Bioenergy Network.

 
Geography for growth
At this level of technology development and WtE market investment, FCE clearly believes sustainability is technically possible and ultimately affordable. ‘The key to our value proposition is that we can convert a waste disposal problem into a revenue stream or even multiple revenue streams,’ emphasises Kurt Goddard.

‘Using biogas as a fuel source supports sustainability efforts by our customers, addresses permitting issues, and all within an economically compelling return on investment,” he continues. “In fact, we can even bring in project investors who coordinate with biogas producer/power users on purchasing power on a pay-as-you-go basis. Such long-term power purchase agreements represent the business structure in place for our Inland Empire and San Jose WWTP installations.”
 
For the near term, FCE expects to continue pursuing bioplants installed at WWTPs, landfills, and other industrial locations with engineered anaerobic digesters. Goddard qualifies this. “The level of adoption of biogas from digesters varies widely by geography, as does the size of the digesters,” he says. “Germany has a high number of digesters used extensively in the agricultural industry, although many are small in size and do not have adequate gas production to support a MW-class fuel cell power plant.”
 
Large-scale commercial agricultural operations that need to address the environmental concerns of waste disposal represent a potential market, particularly some of the large hog and poultry farms, Goddard added. “Smaller-scale agricultural operations are a longer-term market opportunity, since generally there is not the local power need, and aggregation of waste increases costs,” he explained.
 
By publication of this article, a 300 kW DFC unit is expected to begin testing at a Microsoft demonstration data centre in Cheyenne, Wyoming using directed biogas from the Dry Creek Water Reclamation Facility. Data centres could represent a new and sizeable WtE market segment, along with energy parks in South Korea, through FCE's strategic partner, POSCO Energy in Seoul. POSCO has installed or ordered more than 260 MW of FCE fuel cell components, and is now licensed to manufacture DFC power plants in Korea.1

Editor’s note: This article first appeared in the June 2014 edition of Fuel Cell Bulletin, an Elsevier publication.
 
REFERENCES
1.    Fuel Cell Bulletin, December 2012, p6.

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Bioenergy  •  Energy efficiency  •  Energy infrastructure  •  Energy storage including Fuel cells  •  Green building  •  Policy, investment and markets

 

Comments

ANUMAKONDA JAGADEESH said

23 January 2015
Excellent. As the saying goes,One's Trash is somebody's treasure. Waste to Energy is fast energing as an energy option.
Dr.A.Jagadeesh Nellore(AP),India

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