Further Evaluation of Organics Management Options v13 (3)
1. FURTHER EVALUATION OF
WESTERN PLACER WASTE MANAGEMENT AUTHORITY
ORGANIC MATERIALS MANAGEMENT OPTIONS
FINAL REPORT
MAY 1, 2015
Prepared by:
William J. Dickinson
2436 Professional Drive, Suite 300
Roseville, CA 95661
(916) 641-2734
www.capitolpfg.com
2. April 16, 2015
Table of Contents
Executive Summary......................................................................................... ES - 1
1.0 Introduction..................................................................................................... 1
2.0 Project Approach.............................................................................................. 2
3.0 Source Separation Collection Costs .................................................................. 3
4.0 Feedstock Recovery Methods and Quantity Estimates ...................................... 5
4.1 Digestion Technologies ................................................................................. 6
4.2 Contaminant Removal ................................................................................... 7
4.3 Marketing Requirements ............................................................................... 9
5.0 Potential Recovery Scenarios ......................................................................... 11
6.0 Use of Biogas Produced by Anaerobic Digestion............................................. 13
7.0 Planning Period.............................................................................................. 14
8.0 Grants and Production Incentives .................................................................. 16
9.0 Permitting ...................................................................................................... 17
10.0 Water Balance .............................................................................................. 18
11.0 Public-Private Partnership Opportunities ..................................................... 19
12.0 Comparative Financial Projections ............................................................... 23
12.1 Options...................................................................................................... 23
12.2 Assumptions.............................................................................................. 24
12.3 Limitations ................................................................................................ 25
12.4 Conclusions Drawn From Financial Comparison ........................................ 25
12.5 Sensitivity of Assumptions ........................................................................ 27
13.0 Recommendations........................................................................................ 29
3. ES - 1 May 1, 2015
Executive Summary
In January 2014, Capitol Public Finance Group submitted a report to the Western Placer
Waste Management Authority (WPWMA) which evaluated, on a feasibility level, six different
options for collecting and managing commercial organic wastes in the WPWMA service
area1
. Many of the assumptions used to develop the Capitol PFG report were derived from a
concurrent engineering review conducted for the WPWMA by HDR.2
The six options were
summarized in the following Table:
Table 1
Comparison of Commercial Food Recovery Options
Approach Technology Owner Operator
Energy
Output
1
Anaerobic
digestion at
WPWMA
Clean World
Partners
WPWMA Contractor
Electrical gen
set, power to
grid
2
Anaerobic
digestion at
WPWMA
Zero Waste
Energy
WPWMA Contractor
Electrical gen
set, power to
grid
3
Anaerobic
digestion at CWP
site
Clean World
Partners
Clean
World
Partners
Clean World
Partners
Electricity or
CNG
4
Anaerobic
digestion at
Pleasant Grove
WWTP
Unknown
City of
Roseville
City of
Roseville
CNG for
vehicle fuel
5
Composting at
Dixon site
Static pile
aeration with
odor control
Recology Recology None
6
Composting at
WPWMA
Static pile
aeration with
odor control
WPWMA Nortech None
This report is intended to expand upon our previous work, providing details necessary for
the WPWMA Board of Directors to make an informed selection of their preferred approach
for recovering and utilizing organic materials from the WPWMA waste stream.
The report begins by addressing specific questions posed by the WPWMA, and then uses the
answers to update the previous financial analysis. The report concludes with
recommendations for meeting short and long-term organic management goals.
1
“Anaerobic Digestion Feasibility Study and Financial Comparison, Western Placer Waste Management Authority,
January 2014”.
2
“Feasibility Study of the Beneficial Use of Commercial Food Waste, Western Placer Waste Management Authority,
December 30, 2013.”
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ES - 3
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6. ES - 4 May 1, 2015
3. Water bath
4. DODA Bio Separator
5. SORDISEP wet separation
6. Mechanical Screening
7. ALMO Densimetric Table
8. OREX® 500 Organics Extrusion Press
9. Optical sorting
In order to develop a strategy for recovering and processing organic materials, it is
necessary to understand how the marketability of products (compost, from aerated static
pile composting of food waste) and by-products (solid and liquid digestate from AD) change
when feedstock and processing methods change. Based on the analysis of our marketing
sub-consultant, Alexander Associates, producing a very clean compost product will be
necessary to insure that the compost will have a positive value and can be used
productively for landscaping or agricultural purposes.
Capitol PFG considered several possible combinations of feedstock, AD technologies and
contaminant removal systems that could apply to WPWMA mixed waste operations. Our
conclusion is that positive-pick hand sorting of large food items from the Container Line
provides the best opportunity for recovery of organics from the mixed waste stream given
the current configuration of MRF equipment. Other methods are expensive and/or
ineffective at removing contaminants to the level needed to produce marketable compost.
Because recovery from the Container Line alone would likely not result in a program that is
compliant with AB-1826, we recommend that Member and Participating Agencies also
institute curbside collection of separated organics from their largest food waste generators.
Subcontractor TSS Consultants has identified several programs that could provide: a) one-
time grant funds that can reduce capital costs, or b) subsidies for the production of vehicle
fuel, heat or electricity. Most of these programs focus on energy generation from biogas
produced through anaerobic digestion of food waste, manure or biomass, and could apply to
any of the AD options under consideration. The CalRecycle program focuses on Greenhouse
Gas (GHG) reductions, so could potentially fund an AD project or on-site composting3
.
For our financial projections Capitol PFG did not assume that any Option would receive grant
funding or incentive payments; however, the potential for grants and incentives to influence
the comparison of options is discussed in Section 12.5, Sensitivity of Assumptions.
For reasons listed in Section 7.0 of the Report, Capitol PFG has chosen to forecast financial
results for the six chosen Options over both seven year and fifteen year Planning Periods.
Seven years was chosen for a short term approach that could provide commercial food
generators AB 1826 compliance through the year 2022, at which time WPWMA could fully
implement a longer term solution. Fifteen years was chosen as the longest reasonable time
frame for amortization of new capital investments should the Board prefer to immediately
make a long-term commitment. This additional information will allow the WPWMA Board to
fully evaluate its policy options.
3
AD grant applications may be more competitive than composting due to greater potential for GHG reductions.
7. ES - 5 May 1, 2015
Based on new information derived from this study, Capitol PFG has re-defined the original
six Options as follows:
1. Clean World Partners AD at WPWMA utilizing a feedstock consisting of food
separated at the source by food scrap generators (e.g. restaurants and grocery
stores), plus hand-picked food off the MRF Container Line. Food would be processed
at the MRF through a DODA Bio Separator before entering the digester, further
removing contaminants. Digestate would be mixed with green waste and aerobically
composted in windrows in the same manner as currently done with green waste.
2. Zero Waste Energy dry fermentation AD at WPWMA utilizing the same
feedstock described in #1 above. Food would not be processed through a DODA Bio
Separator. A woody bulking material such as compost screenings would be added at
a ratio of 70% food to 30% bulking material. Digestate will be mixed with green
waste and aerobically composted in windrows in the same manner as currently done
with green waste. Finished compost will be passed through a 3/8” screen to remove
any larger contaminants.
3. Anaerobic digestion at the South Sacramento Clean World Partner site
utilizing the same feedstock described in #1 above. The food scraps would be
transported after contaminant removal and consolidation at the MRF. CWP would
utilize their DODA Bio Separator to prepare the food.
4. Anaerobic digestion at the Pleasant Grove Waste Water Treatment Plant
utilizing the same feedstock described in #1 above. Food would be processed at the
MRF through a DODA Bio Separator and the resulting slurry would be trucked to the
treatment plant.
5. Off-site aerated static pile composting utilizing the same feedstock described in
#1 above. Food scraps would be consolidated at the MRF and sent to Recology’s
composting facility near Dixon.
6. On-site aerated static pile composting of the same feedstock described in #1
above4
.
Each of these Options assumes implementation of food scrap collection programs for many
of the larger grocery stores, cafeterias and restaurants. If, how and when such programs
are implemented would be determined by the Member Agencies based on the needs of their
customers. If the Member Agencies do not implement these programs to the extent
anticipated, there could be more food available in the residue streams and in the
Commercial Food Waste (unless food scrap generators find other ways to dispose of their
food waste); however, lower overall recovery of food would be expected.
The Comparative Financial Projections are located in Appendix I. Important assumptions
are noted at the bottom of each “Options” worksheet and on the “Assumptions” worksheet.
The following are some of the key assumptions applied to all Options:
All of the options will utilize the same feedstock sources and require the same
acceptance and pre-processing facilities to remove contaminants from source
separated food routes. Based on the previous work of HDR, Capitol PFG has
4
As noted in Section 5.0, it is possible that some amount of mixed paper may be added into this feedstock.
8. ES - 6 May 1, 2015
estimated the capital cost of pre-processing equipment at $408,434. Options 1 and
4 would require additional pre-processing through a DODA Bio Separator.
All of the options will require an enclosed receiving building with odor controls to
accept and store food waste and house pre-processing lines. Based on the previous
work of HDR, Capitol PFG has estimated this capital cost at $833,920.
Member Agencies will implement source separation programs targeting high-
generation customers, with resulting costs as shown in Table 3. Nortech will remove
contaminants from this material to prepare it for AD or composting under each of the
Options for an estimated annual cost of $90,6405
.
Nortech will recover organics from the Container Line residue to use as feedstock for
any of the six Options at an estimated annual cost of $251,5486
.
Tables 5 and 6 show combined collection and WPWMA costs for the six Options under
consideration. Option 3, “AD at the South Sacramento Clean World Partner Site”, has the
lowest average cost per ton of food recovered for both the 7-Year and 15-Year Planning
Periods. Option 5, which also involves trucking the pre-processed food waste off site, is the
second lowest cost option. These two options have the additional advantage of requiring
the least capital investment and the best potential for adapting to changing circumstances.
Table 5
Option Comparison Summary: 15-Year Planning Period
WPWMA and Member Agency Costs Combined
Description
Net Capital
Outlay7
Average
Annual Cost
For 15
years8
Tons of Food
Recovered -
15 years
Average
Cost/ Ton
of Food
Recovered
1
Clean World Partners AD
at WPWMA $ 5,619,951 $1,361,116 52,216 $391
2
Zero Waste Energy AD at
WPWMA $ 4,310,666 $1,131,113 52,216 $325
3
Clean World Partners
Sacramento AD $ 1,680,166 $945,171 52,216 $272
4
AD at Pleasant Grove
WWTP $ 5,481,301 $1,382,063 52,216 $397
5 Jepson Prairie Composting $ 1,680,166 $1,012,364 52,216 $291
6
On-site Composting At
WPWMA $ 2,680,145 $1,152,191 52,216 $331
5
Cost assumptions here and in the following bullet are the author’s estimate and were not provided by Nortech.
6
This estimate includes labor, maintenance costs and profit. It does not include any potential incentive payments
to Nortech.
7
Includes Recology, Roseville and Lincoln capital outlays for collection equipment.
8
Recology, Roseville and Lincoln collection costs plus WPWMA costs net of revenue from the sale of electricity and
finished compost.
9. ES - 7 May 1, 2015
Table 6
Option Comparison Summary: 7-Year Planning Period
WPWMA and Member Agency Costs Combined
Description
Net Capital
Outlay7
Average
Annual Cost
For 7 years8
Tons of
Food
Recovered -
7 years
Average
Cost/ Ton
of Food
Recovered
1
Clean World Partners AD at
WPWMA $ 5,619,951 $1,662,283 22,447 $518
2
Zero Waste Energy AD at
WPWMA $ 4,310,666 $ 1,390,685 22,447 $434
3
Clean World Partners
Sacramento AD $ 1,680,166 $979,891 22,447 $306
4
AD at Pleasant Grove
WWTP $ 5,481,301 $ 1,664,455 22,447 $519
5 Jepson Prairie Composting $ 1,680,166 $1,042,052 22,447 $325
6
On-site Composting At
WPWMA $ 2,680,145 $ 1,250,234 22,447 $390
Curbside collection costs as a proportion of total net costs range between 15% and 28%
depending on the Option and Planning Period selected.
To roughly estimate the tipping fee impact of implementing Option 3 with a Seven-Year
Planning Period, Capitol PFG has assumed that the WPWMA would recoup all its direct costs
by raising the MSW tipping fee, while Member and Participating Agencies would cover all
costs associated with curbside collection of organics. Under this assumption, the WPWMA
would need to raise the MSW tipping fee by $3.43 per ton. Establishing a subsidized tipping
fee for Source Separated Food Waste to incentivize participation would require a slightly
higher MSW tipping fee. However, determining an appropriate fee structure to offset costs
associated with managing organics is beyond the scope of this project; therefore, Capitol
PFG recommends additional study and consultation with Member Agencies before
establishing a tipping fee structure that appropriately allocates cost and incentivizes
participation in a source-separated commercial organics collection program.
In addition to offering the lowest cost per recovered ton for both the 7-Year and 15-Year
Planning Periods and the lowest capital investment by WPWMA, Option 3, “AD at the South
Sacramento Clean World Partner Site”, also offers the following advantages:
Permitting, engineering and construction of new facilities would be minimized.
The equipment required has been tested and proven effective in similar
circumstances.
Many operational challenges presented by the other options are not a concern with
Option 3. These include odor control, digestate management, sewer connection
fees, biogas offtake and equipment maintenance.
Negotiation of a contract amendment with Energy 2001 is not necessary, and
amendments with Nortech are minimized.
10. ES - 8 May 1, 2015
The approach allows flexibility for adapting to changing circumstances. Flexibility
will be important due to the many unknown factors surrounding the collection,
processing, marketing and regulation of organic materials.
Marketing of gas and utilization of digestate would be the responsibility of Clean
World Partners.
Clean World Partners is testing pre-processing equipment that could allow the
WPWMA to greatly expand the quantity of organic waste recovered. Developing an
agreement that allows the inclusion of these materials, if and when the WPWMA is
interested, should be easy.
For these reasons, Capitol PFG recommends that the WPWMA proceed with the following
actions to pursue Option 3 during the short term planning period, while simultaneously
positioning the agency for other possible long-term strategies.
1. Consult with Member Agencies to confirm their interest in pursuing Option 3.
2. Hire an engineering firm to design and manage construction of facilities to accept,
process and transfer source separated and positively sorted food waste.
3. Establish a tipping fee for source separated food delivered by Member Agencies or
their contractors.
4. Re-evaluate the appropriateness of a reduced tipping fee for Commercial Food Waste
and require that all but the most offensive of such loads be processed through the
MRF.
5. Obtain commitments from Member Agencies regarding deliveries of source separated
food.
6. Negotiate amendments to the existing Agreement with Nortech to positively sort
food waste from the Container Line, and to accept, process and transfer source
separated and positively sorted food waste.
7. Revise permits and obtain new approvals as needed.
8. Negotiate an agreement with Clean World Partners for the anaerobic digestion of
food waste at their South Area Transfer Station facility.
9. Assist Nortech in continued small-scale testing of food waste composting.
10. Maintain contact with the City of Roseville and the South Placer Wastewater
Authority regarding their interest and requirements for accepting food waste at the
Pleasant Grove Wastewater Treatment Plant. Consider developing a joint grant
proposal to reduce capital costs for this Option should these discussions progress in a
positive manner.
11. Over the next two years, develop an RFP for MRF and landfill operations that
encourages proposals for on-site management of organics such as anaerobic
digestion or composting.
________________________________________________________________________
This concludes the Executive Summary. The full report begins on page 1.
11. 1 May 1, 2015
1.0 Introduction
In January 2014, Capitol Public Finance Group submitted a report to the Western Placer
Waste Management Authority (WPWMA)9
which evaluated, on a feasibility level, six different
options for collecting and managing commercial organic wastes in the WPWMA service area.
Many of the assumptions used to develop the Capitol PFG report were derived from a
concurrent engineering review conducted for the WPWMA by HDR.10
The six options were
summarized in the following Table:
Table 1
Comparison of Commercial Food Recovery Options
Approach Technology Owner Operator
Energy
Output
1
Anaerobic
digestion at
WPWMA
Clean World
Partners
WPWMA Contractor
Electrical gen
set, power to
grid
2
Anaerobic
digestion at
WPWMA
Zero Waste
Energy
WPWMA Contractor
Electrical gen
set, power to
grid
3
Anaerobic
digestion at CWP
site
Clean World
Partners
Clean
World
Partners
Clean World
Partners
Electricity or
CNG
4
Anaerobic
digestion at
Pleasant Grove
WWTP
Unknown
City of
Roseville
City of
Roseville
CNG for
vehicle fuel
5
Composting at
Dixon site
Static pile
aeration with
odor control
Recology Recology None
6
Composting at
WPWMA
Static pile
aeration with
odor control
WPWMA Nortech None
This report is intended to expand upon our previous work, providing details necessary for
the WPWMA Board of Directors to make an informed selection of their preferred approach
for recovering and utilizing organic materials from the WPWMA waste stream. In order to
avoid repetition, this report is written with the assumption that readers will have some
familiarity with our previous report, whose Executive Summary is attached as Exhibit A.
The report begins by addressing specific questions posed by the WPWMA, and then
incorporates answers to those questions into an updated financial analysis. The report
concludes with recommendations for meeting short and long-term organic management
goals.
9
“Anaerobic Digestion Feasibility Study and Financial Comparison, Western Placer Waste Management Authority,
January 2014”.
10
“Feasibility Study of the Beneficial Use of Commercial Food Waste, Western Placer Waste Management Authority,
December 30, 2013.”
12. 2 May 1, 2015
2.0 Project Approach
The consulting team led by Capitol Public Finance Group performed the following tasks to
develop this report:
Met with Nortech Waste LLC management to identify technically and financially viable
processing approaches.
Met with a limited number of anaerobic digestion (AD) and processing equipment
vendors and reviewed their concept proposals or product literature.
Conferred with representatives of the City of Roseville, City of Lincoln and Recology
Auburn Placer to refine cost estimates associated with conducting a commercial food
waste source separation collection program.
Planned, coordinated and observed processing tests of the WPWMA MRF residue
streams and the commercial food waste delivered to the landfill to develop better
estimates of the practical ability to utilize food waste.
Developed spreadsheets to compare the expected financial performance of various
options for handling food waste over seven year and fifteen year life cycles.
Talked to technology vendors and operators about their interest in Public/Private
Partnership arrangements relating to recovery and use of food waste.
Over the course of several meetings, solicited feedback from the Organics
Management Group, consisting of representatives from the Member Agencies,
WPWMA staff, Recology Auburn Placer and Nortech.
Investigated grant and other funding opportunities.
Surveyed twenty-eight regional contacts to determine the marketability of compost
that utilizes food scraps or digestate as feedstock.
Conferred with five different regulatory agencies regarding permitting and
environmental review requirements associated with various processing options.
Completed a water balance analysis to determine impacts associated with options
that produce or use water.
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15. 5 May 1, 2015
4.0 Feedstock Recovery Methods and Quantity Estimates
In the previous study, Capitol PFG and HDR considered only the organics collected from
commercial establishments that prepare or sell food as potential feedstock. Roughly half of
this material is currently delivered to the landfill, while the rest is mixed with other material
and processed at the MRF. Based on limited sampling conducted in October-November of
2013, Capitol PFG estimated that 9,386 tons per year (TPY) of organic material was
available from commercial food establishments. At the 80% recovery rate estimated by
HDR, we projected that 7,509 tons could be recovered.
Because HDR did not identify a specific technology for achieving 80% recovery, Capitol PFG
was tasked with working collaboratively with WPWMA and Nortech Waste LLC staff to
identify the most technically and financially feasible method for recovering organic materials
from the mixed waste stream. Using this preferred method, we were also tasked with
identifying capital and operating costs, feedstock quantities and diversion rates for
incorporation into the financial projections.
Because there are significant diversion and financial benefits from increasing the amount of
feedstock available, for this follow-up work we expanded the possible sources of organic
material in mixed waste to include:
Residue from the MRF container lines
The 3/8” to 2 5/8” fraction of residue from the Alternative Daily Cover (ADC) line
(“ADC Overs”)
The 3/8” minus fraction of residue from the Alternative Daily Cover (ADC) line
(“ADC Fines”)
Mixed paper
Recovery from each of these sources could be accomplished with no rerouting of collection
vehicles. As an additional benefit, all of these sources include waste from residential
customers.
Based on information from the January 2014 report and subsequent tests conducted by
Nortech with Capitol PFG, we now estimate the quantity of available feedstock from mixed
waste as shown in Table 4:
16. The abil
sources
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estion Tech
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17. 7 May 1, 2015
most non-organic contaminants that remain in the digestate. Unfortunately, the OWS
system requires a large investment in equipment, which renders it infeasible unless
feedstock quantities are also relatively high. Exhibit B includes information provided by
OWS.
Capitol PFG also gathered information from International Engineering Services (IES)
regarding an AD system based on Induced Bed Reactor technology (see Technical
Memorandum included as Exhibit C). This system is less complex than other technologies
and the cost estimates provided by IES are the lowest received. The Induced Bed Reactor
would likely work best with a feedstock that is relatively free of contaminants. Further
review of the technology and firm capabilities would be needed to compare this concept with
the AD technologies reviewed by HDR.
4.2 Contaminant Removal
As shown in Figure 1, contaminants present in organic streams may be removed at the
following points:
Prior to collection, by the waste generator
After collection, before digestion or composting
After digestion, before aerobic composting of the digestate or food
After aerobic composting, before marketing the material
Figure 1 – Food Waste Contaminant Removal Opportunities
Removing contaminants early in the waste collection and processing system is
advantageous because:
The capacity of downstream equipment (and its cost) can be reduced
Large contaminants are not chopped up into numerous smaller pieces
Harmful constituents are less likely to dissolve into the liquid digestate
Capitol PFG worked with Nortech and conducted other independent research to evaluate
several methods of separating organic materials from contaminants. Each of these
alternatives has advantages and disadvantages. Here is a summary of alternatives
considered and their applicability.
1. Manual sorting to select organics. Concept: Utilize sorters to hand pick large
food scraps such as intact fruits and vegetables to be used for composting or AD.
Conclusion: This method was tested on the MRF Container Line residue and resulted
18. 8 May 1, 2015
in a very clean organic stream. Whole fruits and vegetables are heavy, so hand
sorting is reasonably efficient where these materials are prevalent. This method is
not efficient for the two ADC fractions because the material is too small; based on a
single test conducted by Nortech, it also does not appear to be an effective approach
to recovering organics from Commercial Food Waste14
.
2. Manual sorting to remove contaminants and recyclables. Concept: Utilize
sorters to clean up the feedstock sufficiently to be acceptable for digestion or
composting. Conclusion: This may be an effective means to prepare Commercial
Food for the ZWE dry fermentation AD process or composting if a post-AD or post-
composting clean-up process is also employed. It is not likely to work for any of the
MRF residue fractions as the material is too small and highly contaminated. It will
also not result in a waste stream sufficiently clean for the CWP or wastewater
treatment plant digesters.
3. Water bath. Concept: Run smaller fraction residue streams containing organics into
a water bath, where heavy items such as glass and rocks fall to the bottom, plastics
and paper float to the surface and are scraped off, and organics remain in the liquid,
which can be pumped to an AD system or onto green waste compost. Conclusion:
Nortech tested this concept and was not satisfied with the results. Separation was
not sufficiently complete and too much extra water was introduced into the
wastestream.
4. DODA Bio Separator. Concept: Run feedstock through a DODA Bio Separator (or
similar technology) to remove contaminants. Conclusion: In their 2013 report, HDR
concluded: “The DODA is efficient at removing larger contaminants, such as cans,
plastic bottles, or other packaging, but is less efficient at removing small-sized
contaminants such as broken glass, grit, or shredded film plastics.” Nortech reports
that their tests of a small DODA unit showed that the DODA did not work well with a
highly contaminated feedstock. The DODA pairs best with wet digestion systems
(such as Clean World Partners) that accept feedstock in the form of pumpable slurry.
5. SORDISEP wet separation. Concept: Take digestate directly from the OWS
digester and utilize wet separation to remove inerts and sand to produce marketable
end-products. Conclusion: We were not able to view this process in action as the
only operating system is in France. Potential disadvantages include high capital and
operating costs and the production of wastewater that must be treated or utilized.
6. Mechanical Screening. Concept: Run finished compost (which may include
digestate as feedstock) through screens of progressively smaller sizes to remove
contaminants and undigested woody pieces. Conclusion: Although screening is a
necessary component of producing finished compost, this method will not be
effective at removing small glass shards, small diameter plastic pieces and
Styrofoam beads, any of which can greatly decrease the value of compost.
7. ALMO Densimetric Table. Concept: First run finished compost (which may include
digestate as feedstock) through a series of trommel screens to remove large
contaminants and woody materials. Follow this with processing through the
Densimetric Table, which can remove and recover a mixture of glass, rock and
ceramic fragments, thereby increasing diversion and improving compost quality.
14
Nortech conducted a manual sorting test of Commercial Food Waste on January 14, 2015. Six sorters recovered
only 814 pounds of food from 15.73 incoming tons.
19. 9 May 1, 2015
Conclusion: Under appropriately dry conditions, 99.5% of the glass is removed
from the compost15
. Separation of glass from the rock and ceramic fragments is not
currently feasible using the optical sorting equipment at the WPWMA MRF due to the
small size of the shards after screening to ¼”; therefore, glass would not be a
revenue source and could only be used on site as road base. CapEx is $2-4 million
for all required equipment (installed)16
. Nortech would incur additional operating
costs from screening and handling materials multiple times.
8. OREX® 500 Organics Extrusion Press17
. Concept: Apply high pressure to
squeeze an organic paste out of MRF residue and Commercial Food Waste containing
high proportions of organic materials. The paste could be used for AD feedstock and
the inorganics either landfilled or gasified. This system provides a method for
removing organics from MSW with high percentages of inorganic materials. The
material first needs to be reduced to a 2”-6” size for best results. It could be used in
conjunction with one of the wet AD options as it creates a pumpable feedstock.
Conclusion: CapEx for the OREX® 500 and the polishing unit needed to remove
small plastics, glass and grit from the organic paste after pressing is $3.4 million,
and operating costs for the press and polisher are estimated as $2.75 per ton18
.
Additional capital expense and processing is necessary to prepare the MSW for the
press; however, it may be possible to use some of the existing MRF equipment for
this purpose. The potential for chemical or heavy metals contamination is a concern
with this approach.
9. Optical sorting. Concept: Use optical sensing technology to identify material types
(e.g. paper vs. plastic) passing along a quickly moving belt, then separate material
types by using quick blasts of air to push materials into different receptacles.
Conclusion: This technology is utilized widely in Europe and to a lesser extent in the
USA to address specific waste streams and end product goals. It is more effective
when used on relatively homogeneous streams such as those found in single-stream
recyclable MRFs. Adding optical systems to the current WPWMA MRF to reduce
contamination of organics in some residue streams may be possible, but would likely
come at a high capital cost and would be less efficient than if incorporated into a
redesign of the entire facility19
.
4.3 Marketing Requirements
In order to develop a strategy for recovering and processing organic materials, it is
necessary to understand how the marketability of products (compost, from aerated static
pile composting of food waste) and by-products (solid and liquid digestate from AD) change
when feedstock and processing methods change.
Alexander Associates was engaged to evaluate the marketability of solid digestate, liquid
digestate and compost produced under various circumstances. Their full report is attached
as Appendix D, and the main points are summarized as follows:
15
Kevin Brogan, Van Dyk Recycling Solutions, confirmed by Ron Alexander.
16
Kevin Brogan.
17
This technology has been selected by Recology to recover organic material remaining in residential “Black Bin”
waste from San Francisco. They will send the “juice” to the East Bay MUD wastewater treatment plant.
18
Emails from David Schneider, Anaergia Vice President of Business Development, Western USA.
19
Evaluation of major MRF design changes is outside the scope of this project.
20. 10 May 1, 2015
Farmers and spreaders are paying $10 to 16 per ton, picked up, for yard trimmings
composts that are listed by the Organics Materials Review Institute20
(OMRI), and
more for manure-based products (richer in nutrients). Lower quality materials that
are not OMRI listed sell for less, and producers may even be required to truck and
spread the compost with no compensation.
OMRI will not allow food residuals that are collected in a ‘mixed’ waste stream to be
used as a product feedstock, even if the food is very clean. However, a product
generated from a source-separated waste stream, such as food residuals from
restaurants, may be listable.
Compost contaminated with inert materials that may be introduced through mixed
waste processing or poor separation at the source will be difficult to market and have
little or no value.
Inert contamination in the compost is unlikely to significantly increase heavy metal
and chemical contamination in the finished product.
The liquid digestate produced through the Clean World Partners AD process has not
been proven to produce a useful product at a reasonable cost.21
CalRecycle is currently proposing regulations that would consider compost containing
over 0.1% by weight of inert contamination as ‘solid waste’.
If WPWMA hopes to utilize any MRF residue as a feedstock, marketing the resulting
compost will require significant investment in equipment to remove contaminants.
Based on inspection of compost processed through an ALMO Densimetric Table, it is
likely that moderately-contaminated compost could be cleaned up enough to allow its
sale, although perhaps not to the highest value markets.
The information provided by Mr. Alexander was used to analyze Potential Recovery
Scenarios (Section 5.0) and revise assumptions for the six Organic Recovery Options
presented in the Financial Comparison.
20
The Organic Materials Review Institute (OMRI) is an international nonprofit organization that determines which
input products are allowed for use in organic production and processing. OMRI Listed® products are allowed for
use in certified organic operations under the USDA National Organic Program.
21
This finding is consistent with the previous financial analysis, which assumed disposal of this by-product in the
sewers.
21. 11 May 1, 2015
5.0 Potential Recovery Scenarios
Capitol PFG considered several possible combinations of feedstock, AD technologies and
contaminant removal systems that could apply to WPWMA mixed waste operations. Our
conclusions are as follows:
1. The organic material available from the ADC Fines line consists of small (3/8” or
less) particles contaminated with glass, plastics, ceramics and metals that would be
difficult to remove. A contaminant removal system would be very expensive and
could not be financially justified given the quantity of feedstock available. This
material has also tested positive for heavy metals in the past, so could potentially
render any resultant compost unmarketable. Given that ADC Fines are currently
used as cover at the landfill and therefore do not count as “disposed” material for
the State diversion calculations22
, it does not appear advantageous to include this
material in an AD or composting process.
2. The organic material from the ADC Overs line - in the 3/8” to 2 5/8” size range - is
too small to hand sort economically. Approximately 9% of this material is broken
glass23
, which is very hard on pumps and can render compost unmarketable if
present in even small amounts. With stricter compost regulations from both
CalRecycle and the State Water Board in the draft stages, it is clear that
contaminant removal would be necessary. Any contaminant removal system, pre-
AD or post-AD, would be very expensive and could not be financially justified at this
time given the small quantity of feedstock available.
3. We did not discover any automated system that would effectively sort the organic
material in the Container Line residue at a reasonable cost; however, the organic
material is sufficiently large and intact to manually hand sort. Capitol PFG projects
that 1,300 tons per year of uncontaminated food could be recovered by 3.25 full-
time equivalent sorters with slight modifications to current operations24
.
4. The organic material in the Commercial Food Waste is difficult to recover through
hand sorting due to its size and/or consistency. One approach to organics recovery
would be to process this material through the OREX 500 press, perhaps in
combination with the ADC Overs. This approach may have merit and could be
considered as part of a future MRF redesign and revised operator agreement.
Additional engineering review would be necessary to develop cost estimates to
determine how the system could be integrated into the existing MRF design. A new
waste characterization would also be needed to determine whether enough food is
available in commercial loads after instituting source separation programs to justify
investment in the OREX. Another approach to recovery would be to process loads
categorized as “Commercial Food Waste” (currently sent to the landfill) with all
other incoming MRF waste. Processing this material would provide the opportunity
to manually recover recyclables (primarily plastic and steel containers and
cardboard) plus large organic material that would end up on the Container Line.
Although this approach will likely not divert organics to the level possible from the
22
There have been previous attempts to change California law to consider alternative daily cover “disposed”. AB
1594, enacted in 2014, eliminates disposal credit for green waste ADC by 2020. Although AB 1594 did not address
ADC from MRF fines, this issue may be raised in the future.
23
Based on test conducted by Nortech and Capitol PFG on October 13, 2014.
24
Based on one test conducted by Nortech and Capitol PFG, November 20, 2014, and subsequent data collected by
Nortech.
22. 12 May 1, 2015
OREX 500 Press, due to the lack of information about the potential to utilize the
OREX at the WPWMA MRF, this approach is assumed for the Financial Projections.
5. Consideration was given to digesting highly contaminated feedstock (e.g. ADC Fines
and ADC Overs) and sending the digestate to the landfill without any attempt to
compost the remaining organic material. Gas recovery, stabilization of the organic
material and odor reduction would be potential benefits of this approach. This
concept would potentially work with either the ZWE or OWS technologies, but there
is some doubt as to whether this approach would be compliant with AB 1826. In
addition, contaminants take up facility capacity, driving up capital and operating
costs. It is also possible that the digestate would not be approved for use as daily
cover without mechanical or thermal drying and removal of light-weight plastics.
Drying consumes energy, is expensive and requires air quality permits that may be
difficult to obtain. Losing the ability to utilize ADC Fines for daily cover at the
landfill would be a high cost to achieve the benefits cited above.25
6. Paper is a possible feedstock for the OWS AD system and either on-site or off-site
composting. Nortech believes they can produce at least 6,000 tons per year of
mixed paper by hand sorting contaminants such as plastic bags and cellophane
wrappers out of the residue from the light, two-dimensional residue line. Any
remaining contaminants could be removed when screening finished compost26
.
Paper diverted in this manner would reduce disposal at the landfill and potentially
add value in the form of compost or methane gas. As part of an approved small-
scale test program, Nortech is mixing paper with food waste to determine impacts
to the composting process and product marketability.
7. If the WPWMA wishes to maximize recovery of organics and diversion of materials
from the landfill, the OWS AD system is worth further consideration; however, due
to the high capital and operating costs of this technology, and for the reasons listed
in Section 7.0 regarding the need to consider a short-term Planning Period, Capitol
PFG has not run any financial projections for scenarios that include this technology.
8. The most cost-effective way to manage food waste is to combine a source
separation program that targets high-volume locations with hand-sorting of organic
material from the MRF Container Line. Basing a program exclusively on source
separation or MRF sorting results in costs that are much higher than a blended
approach. Although it is too early to know exactly how the State will enforce AB
1826, we believe this blended approach, in combination with existing green waste
recovery programs, will comply.27
25
If MRF fines are ever outlawed as ADC, and it becomes clear that an agency can meet the requirements of AB
1826 while sending all digestate to the landfill, WPWMA may wish to reconsider this option.
26
Unfortunately, this screening method may contaminate the large woody “overs” now productively used on the
landfill.
27
This question was posed by Capitol PFG to CalRecycle staff in March 2015. Their response is included as
Appendix E.
23. 13 May 1, 2015
6.0 Use of Biogas Produced by Anaerobic Digestion
Under the scenarios included in their study, HDR estimated gas production from an AD
process would be 14.3 million cubic feet per year (capable of generating 600,808 kilowatt-
hours of electricity per year) for a wet system with feedstock inputs of 3,650 tons per year,
and 19.3 million cubic feet per year (capable of generating 814,930 kilowatt-hours of
electricity per year) for a dry system with feedstock inputs of 7,509 tons per year of food
waste and 3,285 tons per year of green waste or compost screenings. The HDR report
assumed that this relatively small amount of gas would be transmitted via pipeline to the
existing landfill gas control system for use by the private landfill gas to energy operation
(Energy 2001). HDR assumed that no additional capital or operating cost would be incurred
from this use of the gas, and that Energy 2001 would pay the WPWMA $0.015 per kilowatt-
hour for electricity Energy 2001 generated and sold through the PG&E grid28
.
With the revised assumptions on feedstock availability used for this report (3,019 tons per
year for all scenarios), gas production is expected to decrease for both the wet and dry AD
systems. Less gas production makes it even more difficult to justify the investment needed
to consider alternatives to sending the biogas to Energy 2001. Nonetheless, options do
exist, including:
1. The raw biogas could be cleaned, compressed and stored for use in natural gas
vehicles. This is a relatively expensive option for a small-scale operation without
considerable subsidies from government programs. Some programs exist now,
but are uncertain moving into the future.
2. The biogas could be directly combusted and used as a heating or cooling source,
either on-site or off-site after transmission through a gas pipeline.
3. The biogas could be directed to a combined heat and power (CHP) unit to
generate electricity and heat for on-site use. Electricity generated for use at the
MRF, for example, could replace power purchased from PG&E at peak times for
costs of up to $0.22/kWh. In addition, such a project could qualify for significant
rebates from PG&E through the California Public Utility Commission’s Self
Generation Incentive Program. Offsetting these potential revenues is the capital
investment in equipment to produce and convey the power to the MRF and the
cost of operating and maintaining the system.
4. Microturbines provide another alternative for producing electricity. They are less
efficient than CHP units but have the advantage of producing fewer emissions.
Considering the small amount of gas potentially available and the complications involved in
obtaining air quality permits, Capital PFG has retained the original assumption that any
biogas produced will be sent to the existing generating system operated by Energy 2001.
28
Based on an offer from Energy 2001 to the WPWMA.
24. 14 May 1, 2015
7.0 Planning Period
In our first study of organic options for the WPMWA, Capitol PFG utilized a twenty-year
planning horizon for financial projections, primarily based on the life span of equipment
assumed by HDR. Although this was a valid assumption for an initial comparative study, it
seems appropriate to reconsider the planning period taking into account the following
factors:
1. The landfill and MRF operation agreements with Nortech expire in 2020 unless
extended. Changing the current WPWMA MRF processing approach could potentially
improve the efficiency of recovering organics. Some of these changes might require
a substantial redesign of the facility, which could be beneficial by 2020 in any case
due to advances in equipment and methods of recovering other materials (paper,
plastics, etc.) over the last ten years. It seems prudent to delay any major capital
improvements for processing organics until a fully integrated design is complete.
2. The agreement with Energy 2001 to utilize landfill gas (LFG) expires in 2018 unless
extended, and the WPWMA has contracted for preparation of a Landfill Gas Strategic
Plan to determine what to do with the LFG after 2018. The choices made by WPWMA
for LFG could have an impact on the uses and valuation of biogas produced from AD
systems.
3. Management of organics will require renegotiation of agreements with the MRF
operator to address responsibilities such as managing an AD or food waste
composting facility. It may be beneficial to wait until 2020 to negotiate long term
agreements for these new services as part of a larger Request For Proposals to
operate the MRF, landfill and biogas utilization system.
4. Changes in the amount and type of organics in the wastestream over the next few
years are likely, but difficult to predict. For example, will food waste generators
react to the new requirements of AB 1826 by installing on-site equipment such as
composters or dehydrators? Will private entrepreneurs provide free collection of
separated organics? To what extent will the Member Agencies institute source
separation programs, how much participation will they achieve and where will they
send the collected materials?
5. Although some larger or more environmentally progressive cities and counties in
California have moved forward with food scrap composting or AD, most have waited
to see what would be required by law. As a result, there has been little data
generated regarding the numerous options available and there is no consensus as to
the best approach under different circumstances. This situation will change in the
next few years because several facilities were recently put on line or are in the
design or construction phases.
6. Regulations implementing AB 1826 will evolve as the five-year phase-in period
progresses. In addition, the State has proposed new composting regulations that
will impact composting of food and AD digestate mixed with green waste. The
composting regulations will not be final for several months. How these regulations
define acceptable levels of contamination from physical, chemical and heavy metal
contaminants could determine which organic recovery methods are technically
feasible and/or economical.
25. 15 May 1, 2015
7. Technological advances in recovery systems for organics will likely make any AD
system selected now obsolete before their concrete or steel components wear out,
thereby requiring reinvestment over shorter time frames than expected. Other
conversion technologies, such as gasification or pyrolysis, could also advance to the
point that they influence the selection of options for managing organics.
8. Given additional time, the South Placer Wastewater Authority may establish a tipping
fee for food waste at the Pleasant Grove Wastewater Treatment Plant that is
competitive to other options under consideration.
9. The WPWMA and its Member Agencies can assist food waste generators in meeting
the requirements of AB 1826 without the need for immediate large-scale capital
investments. This can be accomplished in the short term by hand sorting organics at
the MRF, combined with source separation programs targeting large generators
implemented by the Member Agencies. A relatively low capital cost AD or
composting system could be installed to process the organics at the MRF, or they
could be shipped to other existing or planned facilities in the Sacramento region.
Although this short term approach may not meet the WPWMA’s long term goals, it
would provide time to observe how the other issues noted above are resolved.
Considering the points raised in items 1-9 above, Capitol PFG has chosen to forecast
financial results for the six chosen Options over both seven year and fifteen year Planning
Periods. Seven years was chosen for a short term approach that could provide commercial
food generators AB 1826 compliance through the year 2022, at which time WPWMA could
fully implement a longer term solution29
. Fifteen years was chosen as the longest
reasonable time frame for amortization of new capital investments should the Board prefer
to immediately make a long-term commitment. This additional information will allow the
WPWMA Board to fully evaluate its policy options.
29
This assumes a new MRF/Landfill agreement will take effect in 2020 and it will take two years to build and begin
operation of a longer term project.
26. 16 May 1, 2015
8.0 Grants and Production Incentives
An analysis of grant and incentive program opportunities relevant to WPWMA’s organic
collection and processing options is attached as Appendix F. Subcontractor TSS Consultants
has identified several programs that could provide: a) one-time grant funds that can reduce
capital costs, or b) subsidies for the production of vehicle fuel, heat or electricity. Most of
these programs focus on energy generation from biogas produced through anaerobic
digestion of food waste, manure or biomass, and could apply to any of the AD options under
consideration. The CalRecycle program focuses on Greenhouse Gas (GHG) reductions, so
could potentially fund an AD project or on-site composting30
.
Grant programs are often used to fund new technologies that can advance the industry if
given an initial “push” into the marketplace. Previous grants have funded new processing
equipment for MRFs (e.g. the OREX 500 press), innovative uses of composting (aerated
static pile) and new AD technology (Clean World Partners, Zero Waste Energy and OWS AD
systems).
Grant programs are typically competitive, with applications for funding far exceeding
available funding. For example, in 2014 CalRecycle received requests for over $100 million
of funding when they had only $15 million in available funds. Compost as a final product
has fewer grant or incentive opportunities than AD. The production of renewable natural gas
through AD has the greatest possibility of subsidy and support due to a tradable market for
low carbon fuel credits. The bioenergy development community has shifted increasingly
towards biofuel production because of the subsidy offered through market-based credit
incentives. Unfortunately, the high capital cost of preparing, storing and dispensing
compressed natural gas does not favor small producers of biogas.
The HDR report assumed that any gas produced by AD would be commingled with the much
larger quantities of landfill gas and utilized in the same manner. Because only a small
amount of gas could be generated through AD from the clean organic feedstock available to
the WPWMA, this assumption still seems valid. Currently, Energy 2001 uses the landfill gas
to generate electricity that is distributed through the PG&E grid. A grant application to
produce a small amount of biogas to be used in this manner would likely not be as
competitive as projects to produce vehicle fuels.
Of the concepts under consideration, the following might present the best opportunities for
significantly reducing costs through grant funding:
An innovative approach to separating food waste from mixed waste and preparing it
for off-site AD at the Pleasant Grove Wastewater Treatment Plant. Regional projects
that cross agency lines are often favored by granting agencies.
A small-scale AD system located on WPWMA property that shows financial feasibility
for feedstock supplies in the 3,000 to 6,000 tons per year range. Proving the
feasibility of this technology application would be helpful to many medium-sized
agencies seeking compliance with AB 1826.
The potential for grants and incentives to influence the financial comparison of options is
discussed in Section 12.5, Sensitivity of Assumptions.
30
AD grant applications may be more competitive than composting due to greater potential for GHG reductions.
27. 17 May 1, 2015
9.0 Permitting
An analysis by TSS Consultants of permitting requirements under various assumptions is
included as Appendix G. Capitol PFG used this information to help determine assumptions
for the six Organic Recovery Options presented in the Financial Comparison. Key points of
the permitting analysis include:
A small AD system with an annual throughput of 8,000 tons per year or less could be
relatively easy to permit. A large AD system processing multiple MRF residue
streams would be more difficult.
Options 3, 4 and 5, all of which envision transfer of food waste to off-site facilities,
would require the fewest changes to WPWMA permits.
Biogas production would lead to the requirement for additional air permits and
purchase of offset credits unless the gas is directed to the existing landfill gas
system. Scenarios in which large amounts of gas are produced would trigger more
stringent requirements.
The liquid digestate produced by wet AD systems (Option 1) contains high
concentrations of ammonia, which creates odor concerns and the need for pre-
treatment before disposal in the sewer system or use on compost.
An Environmental Impact Report produced by WPWMA in 2003 analyzed the impacts
of composting food waste on site using an enclosed or covered aerated static pile
system. CUP 1717 and SWFP 31-AA-0001 already allow for this activity so no further
analysis would be required. An AD system would likely require further CEQA review.
CalRecycle and the State Water Resources Control Board are both promulgating new
regulations for the production and marketing of compost. The new standards will
increase requirements for composting all feedstock, including food, digestate and
green waste.
28. 18 May 1, 2015
10.0 Water Balance
As required per the Scope of Work, TSS Consultants completed a study of water use and
discharge under five different scenarios to determine costs and potential beneficial uses of
liquids (Appendix H). Water usage and wastewater production varies greatly between the
six Options under consideration. Beneficial uses of wastewater could include application to
the green-waste compost produced by Nortech.
Based on this analysis, Option 1 is the only option that would produce a significant amount
of excess water that must be utilized or discharged into the sanitary sewer. TSS concludes
that there would be sufficient capacity in the existing ponds to hold the liquid digestate from
Option 1 under normal circumstances; however, in their Permitting review they also
conclude that this digestate contains high concentrations of ammonia and other odor-
causing constituents that would require pre-treatment prior to any beneficial use on
compost. In addition, according to the Alexander & Associates marketing study, Nortech’s
compost could also lose its OMRI designation as “organic” if the liquid digestate was
produced from organic materials recovered from mixed waste.
Option 4 would utilize large quantities of water, but the water would be entrained with
organic materials trucked to the Pleasant Grove Wastewater Treatment Plant for anaerobic
digestion. Excess water would be treated and discharged at the plant.
29. 19 May 1, 2015
11.0 Public-Private Partnership Opportunities
The term “Public Private Partnership”, (aka PPP or 3P) is used to describe various
arrangements whereby a government agency and private businesses share financial and
operational risk in a project or program that provides a public service or benefit.31
They are
common in the waste industry, including at the WPWMA (note the agreements with Nortech
and Energy 2001). In addition to the benefit of shared risk, each party to the agreement
benefits from the technical abilities and market positioning of the other party. For example,
government can provide feedstock guarantees, a developed site, financial stability, bonding
capacity, permitting support, grants, and bill collection support. Private companies often
provide technical expertise, rolling stock and other equipment, plus responsibility for daily
operations. PPPs may also include Design, Build, Operate and Finance (“DBOF”)
agreements that start with private ownership and ultimately result in the public agency
gaining ownership after a lengthy operational period.
For the management of organic materials, the WPWMA should primarily be interested in the
following benefits a private partner can offer:
Technical expertise
Operational experience
Performance guarantees, especially for any commercially untested technology
Risk sharing
The primary tasks involved in carrying out the six Options for the utilization of food waste
are as follows:
1. Collecting source separated and mixed Municipal Solid Waste from grocery stores,
restaurants and other food scrap generators. [all options] This task should remain
a responsibility of the Member Agencies, either directly or through their franchisee.
2. Positively sorting food from mixed waste at the MRF. [all options] This task is best
handled by the MRF operator. Adjustments to the Nortech agreement are necessary
to include this service.
3. Removal of contaminants from source separated food. [all options] This task
could be handled by either the MRF operator or an independent AD or composting
operator.
4. Consolidation of food in an enclosed building. [all options] This task could be
handled by either the MRF operator or an independent AD or composting operator.
5. Processing in a Doda Bio Separator or similar machine in preparation for wet AD.
[Options 1 and 4.] This task could be handled by either the MRF operator or an
independent AD or composting operator.
31
Some definitions of PPP only include arrangements whereby the public agency seeking to make a capital
investment does not incur any debt. In these cases the PPP borrowing is managed by a private sector “special
purpose vehicle” implementing the project. Such definitions distinguish between these arrangements and "shared
service delivery" that utilize contracts or franchises to provide services to citizens. The discussion in this section
uses the broader definition and does not contemplate the formation of any special purpose vehicle.
30. 20 May 1, 2015
6. Loading and transporting food to a remote location. [Options 3, 4 and 5] Loading
should be handled by Nortech, but transporting could be handled by an independent
trucking firm or Nortech. Adjustments to the Nortech agreement are necessary to
include this service.
7. Anaerobic digestion on site. [Options 1 and 2] This task could be handled by
either the MRF operator or an independent AD operator.
8. Aerated Static Pile Composting on site. [Option 6] This task could be handled by
either the MRF operator or an independent composting operator.
9. Processing (to create a marketable product) or disposal of liquid digestate (“liquor”).
[Option 1] This task could be handled by either the MRF operator or an
independent AD operator.
10. Combining the higher solids digestate with yard waste and aerobically composting to
create a marketable product. [Options 1 and 2] This task could be handled by
either the MRF operator or an independent AD operator.
11. Utilizing the biogas produced from AD to create and utilize energy. [Options 1 and
2] The current assumption, pending completion of the Landfill Gas Master Plan, is
that the biogas would be combined with landfill gas and utilized in the same manner.
This would require an amendment to the agreement with Energy 2001.
Several of the tasks noted above could be handled by either the MRF operator or an
independent AD equipment vendor. Work could be performed by either party through a
simple operations agreement, with the WPWMA owning all buildings and equipment, or
through a range of PPP arrangements up to and including DBOF. Advantages with working
with an equipment vendor include their in-depth understanding of the AD process and their
ability to modify equipment as needed. Their desire to showcase their technology may also
lead them to offer the WPWMA a better financial arrangement.
Many vendors have not yet demonstrated their technology commercially in the United
States at a required scale or with a specific feedstock, so are eager to build a project close
to Sacramento. As one example, Exhibit C includes a preliminary estimate from
International Engineering Services (IES) to construct an AD system based on Induced Bed
Reactor technology. IES has indicated interest in a DBO arrangement, as have ZWE (Option
2) and OWS.
On the other hand, placing all work conducted on site under the control of a single operator
(such as Nortech) greatly simplifies WPWMA’s management of all operations and allows
efficiencies that are not possible with multiple operators. The shared use of facilities and
the interdependence of feedstock and final product requirements would make it difficult to
negotiate and manage agreements with two operators. Complications could include defining
responsibilities for each of the following:
Feedstock quality, quantities and timing of deliveries
Use of compost pad or other physical space
Water, sewage and electrical utilities
31. 21 May 1, 2015
Storm water monitoring
On-site traffic
AD digestate and liquor quality
Odor control
Compliance with permit conditions
Service interruptions – either in supply or acceptance of feedstock
Due to these anticipated complications, Capitol PFG recommends maintaining one operator
for all on-site tasks if a reasonable agreement can be reached. The MRF/landfill operator
could sub-contract with an AD technology vendor if they choose, thus retaining the technical
expertise of the vendor while insulating WPWMA from the management challenges.
A deal with the MRF operator to take on all of the tasks associated with on-site anaerobic
digestion (Options 1 and 2, which have the most complications) could be structured from
the following points:
1. Contractor (MRF Operator) shall design, build, operate, finance and own all
improvements necessary to:
a. accept food in a new fully enclosed building that includes odor control
b. remove contaminants from source separated food
c. convey or transport feedstock to the AD equipment
d. anaerobically digest the feedstock
e. collect and store the biogas for a reasonable time
f. process, market or dispose of the liquor (if any)
g. combine the higher solids digestate with yard waste and aerobically compost
to create a marketable product
2. At the end of the contract term, ownership of all improvements shall pass to the
WPWMA at a defined price32
.
3. WPWMA shall pay Contractor a defined fee per ton for all feedstock treated via AD.
4. Contractor shall be entitled to a defined payment for all biogas produced through AD.
5. Contractor shall operate a SCADA system to remotely access the AD system.
WPWMA shall have access to continuous flow monitoring information and summary
reports of gas quantity and constituents.
6. Contractor shall retain all revenues associated with the sale of liquor, digestate and
compost.
7. Contractor may apply for and utilize grant funds or subsidies relating to the
construction or operation of the AD facilities, marketing of liquor and digestate, or
other opportunities that may arise. WPWMA will cooperate with Contractor if
requested to provide information necessary to apply.
32
The price could be as low as $1.00, depending on the WPWMA’s desired contract term, rate setting goals and
expectations for the useful life of the facilities.
32. 22 May 1, 2015
8. Contractor shall dispose of any non-organic material at the Western Regional
Sanitary Landfill at no cost.
9. WPWMA and its Member Agencies shall agree to flow control provisions necessary to
provide Contractor with assurances regarding the quality and quantity of organic
feedstock. A guaranteed minimum volume of source-separated feedstock of a
defined quality will likely be necessary.
10. WPWMA shall be responsible for conveying and utilizing biogas stored by Contractor,
provided the gas meets defined quality standards.
11. WPWMA shall allow Contractor to utilize a defined area for the new structures at no
cost.
12. WPWMA will oversee any necessary environmental review and obtain permit
approvals from the Local Enforcement Agent, CalRecycle, the Central Valley Regional
Water Quality Control Board, the Placer County Air District and the Placer County
Planning Department. Contractor will obtain all other permits.
33. 23 May 1, 2015
12.0 Comparative Financial Projections
12.1 Options
Based on new information derived from this study, Capitol PFG has re-defined the original
six Options as follows:
1. Clean World Partners AD at WPWMA utilizing a feedstock consisting of food separated
at the source by food scrap generators (e.g. restaurants and grocery stores), plus
hand-picked food off the MRF Container Line. Food would be processed at the MRF
through a DODA Bio Separator before entering the digester, further removing
contaminants. Digestate would be mixed with green waste and aerobically
composted in windrows in the same manner as currently done with green waste.
2. Zero Waste Energy dry fermentation AD at WPWMA utilizing the same feedstock
described in #1 above. Food would not be processed through a DODA Bio Separator.
A woody bulking material such as compost screenings would be added at a ratio of
70% food to 30% bulking material. Digestate will be mixed with green waste and
aerobically composted in windrows in the same manner as currently done with green
waste. Finished compost will be passed through a 3/8” screen to remove any larger
contaminants.
3. Anaerobic digestion at the South Sacramento Clean World Partner site utilizing the
same feedstock described in #1 above. The food scraps would be transported after
contaminant removal and consolidation at the MRF. CWP would utilize their DODA
Bio Separator to prepare the food.
4. Anaerobic digestion at the Pleasant Grove Waste Water Treatment Plant utilizing the
same feedstock described in #1 above. Food would be processed at the MRF
through a DODA Bio Separator and the resulting slurry would be trucked to the
treatment plant.
5. Off-site aerated static pile composting utilizing the same feedstock described in #1
above. Food scraps would be consolidated at the MRF and sent to Recology’s
composting facility near Dixon.
6. On-site aerated static pile composting of the same feedstock described in #1
above33
.
Each of these Options assumes implementation of food scrap collection programs for many
of the larger grocery stores, cafeterias and restaurants. If, how and when such programs
are implemented would be determined by the Member Agencies based on the needs of their
customers. If the Member Agencies do not implement these programs to the extent
anticipated, there could be more food available in the residue streams and in the
Commercial Food Waste (unless food scrap generators find other ways to dispose of their
food waste); however, lower overall recovery of food would be expected.
33
As noted in Section 5.0, it is possible that some amount of mixed paper may be added into this feedstock.
34. 24 May 1, 2015
12.2 Assumptions
Important assumptions are noted at the bottom of each “Options” worksheet and on the
“Assumptions” worksheet, all located in Appendix J.
The following are some of the key assumptions applied to all Options:
All of the options will utilize the same feedstock sources and require the same
acceptance and pre-processing facilities to remove contaminants from source
separated food routes. For the year 2016, we assumed there will be 1,813 tons of
source-separated feedstock and 1,300 tons recovered from the MRF Container Line.
Based on the previous work of HDR, Capitol PFG has estimated the capital cost of
pre-processing equipment at $408,434. Options 1 and 4 would require additional
pre-processing through a DODA Bio Separator.
All of the options will require an enclosed receiving building with odor controls to
accept and store food waste and house pre-processing lines. Based on the previous
work of HDR, Capitol PFG has estimated this capital cost at $833,920.
Member Agencies will implement source separation programs targeting high-
generation customers, with resulting costs as shown in Table 3. Nortech will remove
contaminants from this material to prepare it for AD or composting under each of the
Options for an estimated annual cost of $90,64034
.
Nortech will recover organics from the Container Line residue to use as feedstock for
any of the six Options at an estimated annual cost of $251,54835
.
Two different Planning Periods were analyzed for comparative purposes: seven years
and fifteen years. The WPWMA Board can determine which analysis best fits their
policy considerations.
Amortization periods for the two Planning Periods are as follows: long term – 10
years equipment, 15 years building; short term – 7 years for both building and
equipment. Buildings and equipment are assumed to have no residual value at the
end of the planning period.
Consistent with the assumptions in the HDR report, biogas produced from AD under
Options 1 and 2 will be used to supplement landfill gas for the production of
electricity. The royalty to the WPMWA for the electricity will be $0.015 per kilowatt
hour.
Grant funds and incentives are not assumed for any option, but are considered in the
Sensitivity Analysis section.
WPWMA will finance capital expenditures from reserves. The cost of financing is
assumed to be 3.0%, which represents expected lost interest income from investing
reserves.
34
Cost assumptions here and in the following bullet are the author’s estimate and were not provided by Nortech.
35
This estimate includes labor, maintenance costs and profit. It does not include any potential incentive payments
to Nortech.
35. 25 May 1, 2015
All cost and revenue figures on these spreadsheets are specified in 2014 dollars.
Inflation is assumed to have a negligible impact when comparing the six Options in
the current economic climate; therefore, there is no adjustment for inflation.
Capital costs include measures to mitigate any new air quality impacts.
The following assumptions are specific to Option 4, “AD at the Pleasant Grove Wastewater
Treatment Plant”.
The City of Roseville will build and reserve sufficient digester capacity to accept 25
tons per day of food waste throughout the planning period.
Source-separated food waste will be consolidated at the WPWMA MRF, processed
through a Doda Bio Separator to create a slurry, and hauled to the Pleasant Grove
WWTP in tanker trucks.
The Kennedy Jenks report entitled “Wastewater Biomethane Procurement Feasibility
Study, 25 October 2013”, was used as a basis to develop costs, as was the HDR
report.
Following the “second approach” developed in the Kennedy Jenks study (p.17), costs
associated with producing a Class B sludge by digestion and thickening have been
excluded from the analysis. The South Placer Wastewater Authority Board of
Directors and the City of Roseville must ultimately determine how these costs should
be assigned if negotiating a tipping fee for digesting WPWMA food waste. If these
agencies decide to allocate some or all of the costs of the digester improvements to
the food waste project, the tipping fee could increase significantly36
.
Capitol PFG has assumed that diversion credit for wastewater treatment plant sludge
applied to land will continue throughout the planning period, in spite of concerns that
State law will be changed to disallow such credit.
12.3 Limitations
Cost estimates are not based on engineering designs for this site and this specific
application, so are useful only for feasibility level cost comparisons.
Feedstock tonnage estimates are based on very limited testing, so may prove
inaccurate.
12.4 Conclusions Drawn From Financial Comparison
Tables 5 and 6 show combined collection and WPWMA costs for the six Options under
consideration. Option 3, “AD at the South Sacramento Clean World Partner Site”, has the
lowest average cost per ton of food recovered for both the 7-Year and 15-Year Planning
Periods. Option 5, which also involves trucking the pre-processed food waste off site, is the
36
Kennedy-Jenks states in their report that sewage sludge alone may not support the anaerobic digestion process
at the Pleasant Grove Treatment Plant, so food waste, FOG and/or sludge from a primary treatment process may
be needed to allow anaerobic digestion to function. This may give the City an incentive to set a tip fee that is
attractive to the WPWMA.
36. 26 May 1, 2015
second lowest cost option. These two options have the additional advantage of requiring
the least capital investment and the best potential for adapting to changing circumstances.
Table 5
Option Comparison Summary: 15-Year Planning Period
WPWMA and Member Agency Costs Combined
Description
Net Capital
Outlay37
Average
Annual Cost
For 15
years38
Tons of Food
Recovered -
15 years
Average
Cost/ Ton
of Food
Recovered
1
Clean World Partners AD
at WPWMA $ 5,619,951 $1,361,116 52,216 $391
2
Zero Waste Energy AD at
WPWMA $ 4,310,666 $1,131,113 52,216 $325
3
Clean World Partners
Sacramento AD $ 1,680,166 $945,171 52,216 $272
4
AD at Pleasant Grove
WWTP $ 5,481,301 $1,382,063 52,216 $397
5 Jepson Prairie Composting $ 1,680,166 $1,012,364 52,216 $291
6
On-site Composting At
WPWMA $ 2,680,145 $1,152,191 52,216 $331
Table 6
Option Comparison Summary: 7-Year Planning Period
WPWMA and Member Agency Costs Combined
Description
Net Capital
Outlay37
Average
Annual Cost
For 7 years38
Tons of
Food
Recovered -
7 years
Average
Cost/ Ton
of Food
Recovered
1
Clean World Partners AD at
WPWMA $ 5,619,951 $1,662,283 22,447 $518
2
Zero Waste Energy AD at
WPWMA $ 4,310,666 $ 1,390,685 22,447 $434
3
Clean World Partners
Sacramento AD $ 1,680,166 $979,891 22,447 $306
4
AD at Pleasant Grove
WWTP $ 5,481,301 $ 1,664,455 22,447 $519
5 Jepson Prairie Composting $ 1,680,166 $1,042,052 22,447 $325
6
On-site Composting At
WPWMA $ 2,680,145 $ 1,250,234 22,447 $390
37
Includes Recology, Roseville and Lincoln capital outlays for collection equipment.
38
Recology, Roseville and Lincoln collection costs plus WPWMA costs net of revenue from the sale of electricity
and finished compost.
37. 27 May 1, 2015
Curbside collection costs as a proportion of total net costs range between 15% and 28%
depending on the Option and Planning Period selected.
To roughly estimate the tipping fee impact of implementing Option 3, Capitol PFG has
assumed that the WPWMA would recoup all its direct costs by raising the MSW tipping fee,
while Member and Participating Agencies would cover all costs associated with curbside
collection of organics. Under this assumption, the WPWMA would need to raise the MSW
tipping fee by $3.00 per ton. Establishing a subsidized tipping fee for Source Separated
Food Waste to incentivize participation would require a slightly higher MSW tipping fee.
However, determining an appropriate fee structure to offset costs associated with managing
organics is beyond the scope of this project; therefore, Capitol PFG recommends additional
study and consultation with Member Agencies before establishing a tipping fee structure
that appropriately allocates cost and incentivizes participation in a source-separated
commercial organics collection program.
12.5 Sensitivity of Assumptions
Because the financial analysis depends on many assumptions, it is important to understand
how the outcomes change with different assumptions or conditions. Testing of some of the
key assumptions led to the following results.
Our analysis assumes that new organic feedstock will consist of 1,813 tons of source
separated food and 1,300 tons of food recovered from the MRF Container Line.
Doubling the tons per year of feedstock while holding costs constant lowers the cost
per ton of all Options, but does not change their relative ranking.
The base assumption is that no Options would receive grants or incentives. As
discussed in Section 8.0, AD projects have the best potential for grant funding. For
the 15-Year Planning Period, a $1.5 million grant for Option 2 (ZWE AD) or a $3.5
million grant for Option 1 (CWP AD) would be required to equal the cost per
recovered ton of the lowest cost option (Option 3). For the short-term (seven-year)
Planning Period, these grant amounts must increase to $2.5 million and $4.2 million,
respectively, to equal the cost per recovered ton of Option 3. Grant allocations at
these levels do not seem likely given previous grant support for these technologies
at other California locations.
The base assumption is that electricity produced from biogas would have a value to
the WPWMA of only $0.015 per KWh. Due to the small amount of gas produced,
raising this value within a reasonable range (up to $0.127/KWh, which is the initial
tariff price under SB 1122) would have very little impact on the analysis.
For Option 4, “AD at Pleasant Grove Wastewater Treatment Plant”, the following
question might be asked: “If we were to assume that the City of Roseville would
charge a tipping fee to cover their costs at the treatment plant, and the costs to the
WPWMA for preparing the food slurry and transporting it remain as predicted, what
tipping fee would the City need to charge to reduce WPWMA costs to equal Option
38. 28 May 1, 2015
3?” Per our analysis, that cost would be $9.00 per ton39
for the 15-year Planning
Period.
For Options 3 and 5, which involve hauling organics off-site for processing, the
tipping fee charged by Clean World Partners and Recology, respectively, are key
factors in the overall cost. A valid question here is: “To what level would Clean
World Partners need to raise their tipping fee (from the proposed $34/ton) to make
the Average Cost Per Ton of Food Recovered equivalent to the lowest cost on-site
option?” The answer is: $86/ton for the 15-Year Planning Period and $118/ton for
the 7-year Planning Period. WPWMA can mitigate concerns about increasing tipping
fee costs by entering into an agreement with a defined fee for a specified length of
time.
39
This Option may be of particular interest to granting agencies. If the WPWMA were to receive a grant of $1
million to reduce capital costs for Option 4, the tipping fee could be increased to $37 per ton for the 15-year
Planning Period, which is probably a more realistic level to cover City costs at the WWTP.
39. 29 May 1, 2015
13.0 Recommendations
In addition to offering the lowest cost per recovered ton for both the 7-Year and 15-Year
Planning Periods and the lowest capital investment by WPWMA, Option 3, “AD at the South
Sacramento Clean World Partner Site”, also offers the following advantages:
Permitting, engineering and construction of new facilities is minimized.
The equipment required has been tested and proven effective in similar
circumstances.
Many operational challenges presented by the other options are not a concern with
Option 3. These include odor control, digestate management, sewer connection
fees, biogas offtake and equipment maintenance.
Negotiation of a contract amendment with Energy 2001 is not necessary, and
amendments with Nortech are minimized.
The approach allows flexibility for adapting to changing circumstances. Flexibility
will be important due to the many unknown factors surrounding the collection,
processing, marketing and regulation of organic materials.
Marketing of gas and utilization of digestate would be the responsibility of Clean
World Partners.
Clean World Partners is testing pre-processing equipment that could allow the
WPWMA to greatly expand the quantity of organic waste recovered. Developing an
agreement that allows the inclusion of these materials, if and when the WPWMA is
interested, should be easy.
For these reasons, Capitol PFG recommends that the WPWMA proceed with the following
actions to pursue Option 3 during the short term planning period, while simultaneously
positioning the agency for other possible long-term strategies.
1. Consult with Member Agencies to confirm their interest in pursuing Option 3.
2. Hire an engineering firm to design and manage construction of facilities to accept,
process and transfer source separated and positively sorted food waste.
3. Establish a tipping fee for source separated food delivered by Member Agencies or
their contractors.
4. Re-evaluate the appropriateness of a reduced tipping fee for Commercial Food Waste
and require that all but the most offensive of such loads be processed through the
MRF.
5. Obtain commitments from Member Agencies regarding deliveries of source separated
food.
6. Negotiate amendments to the existing Agreement with Nortech to positively sort
food waste from the Container Line, and to accept, process and transfer source
separated and positively sorted food waste.
7. Revise permits and obtain new approvals as needed.
8. Negotiate an agreement with Clean World Partners for the anaerobic digestion of
food waste at their South Area Transfer Station facility.
9. Assist Nortech in continued small-scale testing of food waste composting.
40. 30 May 1, 2015
10. Maintain contact with the City of Roseville and the South Placer Wastewater
Authority regarding their interest and requirements for accepting food waste at the
Pleasant Grove Wastewater Treatment Plant. Consider developing a joint grant
proposal to reduce capital costs for this Option should these discussions progress in a
positive manner.
11. Over the next two years, develop an RFP for MRF and landfill operations that
encourages proposals for on-site management of organics such as anaerobic
digestion or composting.
42. ANAEROBIC DIGESTION FEASIBILITY STUDY AND
FINANCIAL COMPARISON
WESTERN PLACER WASTE MANAGEMENT AUTHORITY
FINAL REPORT
JANUARY 2014
Prepared by:
2436 Professional Drive, Suite 300
Roseville, CA 95661
(916) 641-2734
www.capitolpfg.com
43.
- 1 - January 2014
Executive Summary
The purpose of this study and report is to assist the WPWMA in deciding the best approach
for recovering and utilizing food waste. Factors considered when evaluating options include
financial performance, contractual obligations, funding opportunities and partnership
potential. This report should be reviewed in conjunction with the HDR report entitled
“Feasibility Study of the Beneficial use of Commercial Food Waste”, which focuses on
technical feasibility. Each study compares the six options summarized in Table 7
(reproduced below).
Table 7
Comparison of Commercial Food Recovery Options
Approach Technology Owner Operator
Energy
Output
1
Anaerobic
digestion at
WPWMA
Clean World
Partners
WPWMA Contractor
Electrical gen
set, power to
grid
2
Anaerobic
digestion at
WPWMA
Zero Waste
Energy
WPWMA Contractor
Electrical gen
set, power to
grid
3
Anaerobic
digestion at CWP
site
Clean World
Partners
Clean
World
Partners
Clean World
Partners
Electricity or
CNG
4
Anaerobic
digestion at
Pleasant Grove
WWTP
Unknown
City of
Roseville
City of
Roseville
CNG for
vehicle fuel
5
Composting at
Dixon site
Static pile
aeration with
odor control
Recology Recology None
6
Composting at
WPWMA
Static pile
aeration with
odor control
WPWMA Nortech None
WPWMA staff, in cooperation with Member Agency staff, has identified what they would like
to achieve while productively using food waste. These goals are important to understand
and weigh when considering the available options for food waste.
• Comply with state regulations requiring commercial waste diversion programs
• Divert material from landfilling to move toward achievement of the 75% statewide
diversion goal and prolong landfill life
44.
- 2 - January 2014
• Create useful outputs such as energy and compost
• Remove odor-producing constituents from the landfill
• Minimize impacts to neighbors
Other potential benefits of utilizing food waste include:
• Greenhouse gas reductions – achieved by lessening methane surface emissions and
producing compressed natural gas (CNG) fuels or electricity to replace fossil fuels
• Environmental leadership
Understanding the quality and quantity of food waste realistically available to the WPWMA is
a crucial first step in evaluating alternatives. Although there are studies available that
develop factors such as percentage of food waste by waste stream or type of facility, or
pounds per year per person, Capitol PFG chose not to rely solely on such studies because
the results vary significantly depending on location and methodology. Instead, we worked
with the Organics Management Group (OMG), established by WPMWA staff, to develop data
specific to the WPWMA wastestream for comparison to other studies.
Due to a lack of data regarding tons of waste disposed from food-producing commercial
accounts, it was not possible to simply sample a discrete group of waste, determine its food
content and apply that percentage to a known tonnage. Instead, it was necessary to
develop food generation factors expressed as “pounds of food per pound of subscribed
service” for several different types of food generators. This was accomplished over a seven-
week testing period as described in Appendix A. We then applied those factors to each
customer’s subscribed service from lists provided by Recology, the City of Roseville and the
City of Lincoln. Table 2 of the report shows the results of this analysis1
.
1
The category “Plaza” refers to mixed-use commercial centers whose tenants dump their wastes into shared bins.
45.
- 3 - January 2014
Table 2
Based on comparisons to other California studies, it appears that our study of the WPWMA
commercial waste stream has yielded a fairly conservative estimate of food available.
Each technology option presented in this report has a different sensitivity to contamination,
which influences the quantity of feedstock available and diversion possible. For the purpose
of comparing the six basic options with the information now available, HDR has determined
that the Clean World Partners Anaerobic Digestion options and the Pleasant Grove WWTP
Digester option could only work with very clean source-separated materials that undergo
processing through a wet separation system (such as the Doda mixer used by Clean World
Partners at their Sacramento facility). Material of sufficient quality for these options is not
available from mixed waste processing because of small contaminants that harm
equipment, increase solids removal requirements and reduce the energy content of the
feedstock.
Taking several factors into consideration, Capitol PFG has projected annual food recovery
from source separation at 3,656 tons as shown in Table 3.
New investment in equipment and changes in garbage collection routes will be necessary if
the WPWMA selects an option that requires collection of source separated food waste.
Expected costs for Recology, Roseville and Lincoln are summarized in Table 6 and included
in the financial comparison as annual expenses totaling $1,099,123 for Options 1, 3 and 4.
HDR has determined that the Zero Waste Energy Anaerobic Digestion, Jepson Prairie
Composting and WPWMA Composting options can handle a more contaminated wastestream
derived from limited sorting of food-rich loads on a new processing line at the MRF. HDR