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Stephen Palmer, MWH

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  • 1. Leeds University Confluence: 10th M h 2010 C fl March Energy and the Water Cycle: Carbon Emissions from the Water Industry E i i f th W t I d t Strategic Investment towards 2050 Dr Steve Palmer and Adrian Johnson
  • 2. Presentation outline • Current and future risks facing the water industry • The need to shift from developing assets to meet The need to shift from developing assets to meet  drivers to strategic investment in systems to maximise  resource efficiency resource efficiency • Opportunities • Wastewater case study example
  • 3. Legislation, climate change and other pressures  demand long term vision demand long‐term vision Climate change legislation WFD objectives Capped budgets pp g REACTIVE: Customer priorities harder, higher cost VISION: VISION Transformed assets:  PLANNED:  adapted to climate  change and carbon  easier, lowest  cost efficient; Anticipate future trends Risks controlled Reduce operating cost risk Avoid stranded assets Climate change impacts Control and manage Rising energy / carbon prices / b risks to whole life costs Demographic & social changes 3
  • 4. Particular issues for water industry • Assets have long lives what is built now will serve for decades into the future • Assets have high write-off costs stranded assets reduce investment returns and efficiency • Capital investment needed so assets can accommodate: energy cost inflation (to ensure operating cost efficiency) regulatory risks climate change mitigation strategic resources risks … while obtaining value for money
  • 5. Operating cost risk: Effect of annual power cost inflation on 40yr power costs of a 160 000 pe STW 160,000 Inflation in UK From To %inc. per annum Source industrial power 1979 2007 6.7 67 BERR costs 1997 2007 3.3 Eurostat 2004 2007 11.0 Eurostat 2006 2007 18.5 BERR £35 2007 2008 14.2 BERR 0.00% 1.00% £30 2.00% 3.00% £25 4.00% 5.00% ns £ Million £20 6.00% 7.00% £15 8.00% 9.00% 10.00% 10 00% 11.00% 11 00% £10 £5 £- 0 10 20 30 40
  • 6. Regulatory risks: water environment Water Framework Directive • Significant investment to enhance capability • C b not explicitly accounted f i fi t cycle – Carbon t li itl t d for in first l opportunity lost? • Inequalities of whole life cost calculation – capex pressures override opex costs Most water cos. forecast cos significant increases in CO2 emissions to meet water legislation
  • 7. Regulatory risks: climate change mitigation Government target 80% reduction by 2050  Government target 80% reduction by 2050 plus interim budgets set by Climate Change Committee  CRC energy efficiency scheme launched in 2010 CRC ffi i h l h d i 2010 • Affects orgs. using more than 6000MWh/yr of electricity • Power largest element in water co. carbon footprint • Potential increase in Potential increase in  cost of permits from  2013 is significant risk 2013 is significant risk
  • 8. Expectations of future development “…meet our long term sustainability duties….align with  wider policy on GHG reductions…” OFWAT Climate Change Policy Statement 2008 “The group believes that the Price Review, together with the  ongoing work of the WFD, could provide an important impetus to  the sector to ensure that it fully equips itself to meet the acute  th t t th t it f ll i it lf t t th t environmental challenge posed by climate change, in the most  sustainable way possible. sustainable way possible ” All Party Parliamentary Water Group: The future of the UK Water  Sector (2008) Sector (2008)
  • 9. Strategic resources risks: Phosphorus • P essential to food  production • P fertiliser price up 300%  in last two years in last two years • ‘Peak’  year predicted to  be 2034 be 2034 • Government regulation  likely: China has placed a  likely: China has placed a Peak phosphorus ‘Hubbert’ curve,  135% tariff on P reserves (based on Cordell, Drangert and  • P in sewage is recoverable P in sewage is recoverable  White, 2009) strategic resource
  • 10. A new focus on resource efficiency management Focus on achieving carbon efficiency: minimise the carbon emissions … • per customer served • per unit volume conveyed (pumped) • per unit of pollution load removed Wherever possible … Modelling is key Avoid the use of energy and resources Reduce energy and resource use Recover energy and resources Replace existing energy (and resources) with low carbon alternatives
  • 11. The biggest opportunities are in the early stages Business Deliver to Problem Solution model & Delivery achieve Operation definition choice strategy savings unity Opportu Allow ‘what if’ projects
  • 12. Wastewater and sludge treatment: Invest in energy efficiency and energy recovery Invest in energy efficiency and energy recovery
  • 13. Wastewater and sludge treatment: A new approach to asset development For carbon efficiency: Maximise the pollution load removal per kW Maximise on-site renewable energy generation on site Build in the capability for resource recovery • Upgrade asset standards and guidelines • Adopt a thermodynamic approach to optimise • Avoid waste … think resource recovery
  • 14. Energy Efficient Wastewater Treatment Works CHP Gasification Minimise sludge Exploit wind Enhanced transport resources Digestion Real Time FOG Digestion Increase Control Biogas Sewage heat recovery g y Reduce Production Aeration Enhanced primary Costs treatment High Efficiency Aeration Energy Devices Management Pump Drive Unit Efficiency Sustainable Reduce Buildings Pumping RAS Rates Costs
  • 15. Minimise costs by applying enabling technologies to existing assets Chemical Real time control dosing Preliminary Primary Aerobic secondary Final treatment treatment treatment effluent FOG removal Primary Secondary sludge sludge Energy Sludge CHP thickening Gas Site export, ROCs Anaerobic digestion Dewatering and Gasification Advanced drying Algae growth digestion (MAD plug fl ) l flow) Fuel, MAD, Gasifier VFAs Class A sludge, P to land Char, Syngas
  • 16. Outcomes: process flowsheets capable of energy neutrality and production Katri Vala heat pump plant generates multiple MW of energy direct from sewage effluent for input to Helsinki ffl tf i t t H l i ki district heating Heat recovery from sewage Enhanced primary treatment Enhanced Digestion Digested sludge gasification for CHP Making use of any available subsidies (e.g. ROCs )
  • 17. Sludge and biogas value chain Heat 1st order 2nd order 3rd order Beneficial use treatment e.g. treatment e.g. treatment e.g. of biosolids sludge digestion sludge drying gasification Heat Power Biogas Combustion of Power On-site biogas processes Surplus heat Surplus power Direct export District National grid heating
  • 18. Assess options for best value outomes Enabling factors e.g. Large site Potential benefits Large power costs L t Energy/carbon neutral Local agriculture  Class A sludge paying for sludge P return to land P return to land Primary MAD capacity sludge Upgrade biogas for use  Cost‐benefit  Sludge tankering analysis of  as vehicle fuel or for  Secondary Possible future N&P  Possible future N&P options injection to gas grid i j i id sludge consent Export renewable power Renewable energy  Char to land‐carbon  Best value end  required locally i d l ll sequestration uses ROCs VFAs and Oils Policy to reduce C  y footprint
  • 19. Municipal Wastewater Case Study Baseline design for Whole life cost comparison: Conventional plant for approx 160,000PE Standard preliminary treatment p y Standard primary treatment Activated sludge secondary treatment ( g y (FBDA)) Sludge digestion and drying to pellet Conventional best practice (methane used to heat dryer at 90% efficiency and dryer waste heat heats to digesters) y g )
  • 20. Plant refurbishment: Potential for significant reductions in operating cost and whole life cost g Whole life cost of 160,000PE Conventional Flowsheet versus Sustainably Uprated Flowsheets when power exported and ROCs claimed at 10% power cost inflation 180 Conventional UHT gasifier 160 Ehcd PSt, Ehcd MAD Natural gas 140 &UHT gasifier co-fired gasifier Biogas Incinerator 120 co-fired gasifier fi d ifi 100 Ehcd PSt, Ehcd MAD &Incinerator ons £ Millio 80 60 40 20 0 0 5 10 15 20 25 30 35 40 Year of Operation after Refurbishment
  • 21. Plant Refurbishment: Potential for reductions in operating cost and whole life cost without ROCs Whole life cost of 160,000PE Conventional Flowsheet versus Sustainably Uprated Conventional Flowsheets with no power subsidies at 10% power cost inflation 180 Conventional C ti l 160 Uprated with UHT Gasifier only 140 Uprated with UHT Gasifier &Encd PSTs 120 Uprated with 100 UHT Gasifier Encd MAD £ Millions Uprated with 80 UHT Gasifier &PSTs&Encd MAD M 60 40 20 0 0 5 10 15 20 25 30 35 40 Year of Operation after Refurbishment
  • 22. Power Cost Inflation Risk Analysis: Effect on whole life cost of digested sludge incineration g g Plant upgraded with digested sludge combustion: conventional facility WLC as a function of energy cost inflation versus upgrading options for Incineration with CHP (1 ROC) 180 Plus Incinerator with CHP only 160 Plus Incinerator with CHP; PST and MAD enhancements s) STW NP at 30Yrs (£ Millions 140 Conventional Design 120 s 100 80 PV 60 40 20 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 % Annual Electrical Power Cost Inflation
  • 23. Power Cost Inflation Risk Analysis: Effect on whole life cost of digested sludge gasification g g g Plant Upgraded with Digested Sludge Gasification: Conventional Facility WLC versus upgrading options for UHT gasification with CHP (2 ROCs), as a function of energy cost inflation 180 Conventional D i C ti l Design 160 Conventional uprated with gasifier claiming ROCs 140 Conventional with Enhanced PSTs & MADs and Gasifier claiming ROCs llions) 120 Conventional with enhnaced PSts and MADs and Gasifiers: NO ROCs STW NPV at 30Yrs (£ Mil 100 80 3 60 40 W 20 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 % Annual Electrical Power Cost Inflation
  • 24. A new approach to address risks and maximise operational efficiency for 2050 • Need a focus on carbon efficiency (systems level) • There a e ba e s to be add essed to de e full pote t a e e are barriers addressed deliver u potential • Energy efficiency improvements per se are only a small part of obtaining reductions in operating cost and carbon footprint g p g p • Significant gains offered by in situ power generation on large sewage works and sludge processing centres But … • the projects which offer best potential require higher levels of capital investment and longer payback periods • To effectively mitigate power cost inflation and other risks, investment in these projects needs to begin now