What's It Worth to You? Arlington Regen Biogas Utilization Evaluation

INTRODUCTION Arlington County (County) is implementing new biosolids management facilities at the Arlington County Water Pollution Control Plant (WPCP). The Arlington County WPCP Re-Gen Program (Program) is a comprehensive program that will include the engineering, design, construction, maintenance, startup, and operation necessary to add sustainable equipment and systems to effectively recover the County's renewable resources, produce a Class A biosolids product, and most efficiently utilize the biogas. The Program includes upgrades or replacement of nearly all existing solids handling processes. A thermal hydrolysis process (THP) followed by anaerobic digestion (AD) form the backbone of the new treatment train. The overall process flow diagram for the Facilities is shown in Figure 1. PURPOSE AND SCOPE OF STUDY The purpose of the biogas utilization evaluation is to review all feasible alternatives for the beneficial use of the biogas to assist in meeting the County's sustainability goals while also meeting the energy needs of the WPCP and then perform monetary, non-monetary, and sustainability evaluations to determine the recommended alternative for the County. It is not a stated goal of the Program to be 'cash positive' many additional factors impact the overall Program cost. The scope of the analysis included only biogas utilization portion of the Program, and not any other of the solids handling components. ALTERNATIVES DEVELOPMENT There are several options for the beneficial use of the biogas produced in AD, each with its own advantages and disadvantages including biogas conditioning requirements, capital cost, O&M requirements, financial benefits, sustainability impacts, and GHG emissions. From the potential biogas uses the following six major alternatives were developed: Alternative 1: Process and building heating Alternative 2A: CHP with Engines Alternative 2B: CHP with Turbine Alternative 3A: RNG to Pipeline Alternative 3B: RNG as CNG Alternative 4A: RNG and CHP with Engines Alternative 4B: RNG and CHP with Turbines For each of the alternatives, an energy balance was developed to help illustrate the sources and flows of energy purchased and produced. The resulting diagrams show the process and building heating requirements, electrical power requirements and production, equipment efficiencies, NG purchase, and biogas flaring for each alternative. These energy balances formed the basis for the financial, non-financial and sustainability analysis performed. FINANCIAL ANALYSIS A financial analysis focused on the financial costs over a 6-year period of construction and 25-year period of subsequent operations. Figure 2 presents the original conceptual construction cost (inclusive of contractor overhead and profit [O&P], mobilization and other preliminary costs, and contingency), and total present value of all capital and net operating costs through 2052, assuming a 3 percent discount rate. The financial analysis indicates that although Alternatives 3A and 3B (RNG alternatives) do not have the lowest capital cost, they do have the lowest total present-value cost due to the anticipated value of the RNG. In comparison, Alternatives 4A and 4B (RNG and CHP alternatives) would entail larger capital costs and comparable present-value costs when compared to Alternatives 2A and 2B (CHP alternatives). The initial present-value financial analysis supports eliminating Alternatives 4A and 4B for further consideration because of high capital costs, high overall complexity, and comparable present financial values to Alternatives 2A and 2B. NON-FINANCIAL ANALYSIS To account for non-monetary factors that impact stakeholders a comprehensive non-financial analysis was completed. This analysis included the development of evaluation criteria, shown in Table 1, and then the subsequent weighting of the criteria and scoring each alternative for those criteria. The results of the non-financial analysis are shown in Figure 3. Alternative 3A had the highest (most favorable) non-financial score at 68.2, followed by Alternative 1 at 67.5. Alternative 2B had the lowest non-financial score of 57.6. The main differentiators between the RNG alternatives (Alternatives 3A/3B) and CHP alternatives (Alternatives 2A/2B) were that the RNG alternatives had: -Lower localized emissions -Reduced noise -Increased flexibility and reduced flaring -Lower maintenance complexity -Adaptability to future opportunities SUSTAINABILTY CRITERIA The sustainability, or environmental impact, of the alternatives was identified by using the anticipated reductions of GHG emissions (namely CO2) for each alternative and using a social cost of GHG approach to monetize the reductions. The net GHG change presented is solely for the biogas utilization equipment, not the entire Program. Table 2 presents net change in GHG emissions for each of the sources of energy for 2037. Overall, Alternatives 2A, 3A, and 3B have greater emissions reductions than Alternatives 1 and 2B. COMPOSITE RESULTS To complete the analysis and understand the ultimate best use of biogas for the program the financial results, non-financial scoring and GHG emissions reduction, are combined into plots to illustrate the composite results for each alternative. Figure 4 presents the composite results of the base case scenario. Four additional scenarios were developed to reflect the variability of RIN prices, electrical prices and the social cost of carbon. For this base scenario, without considering the social cost of carbon, Alternative 3A had the highest non-financial score and the second lowest present financial value. SENSITIVITY ANALYSIS Finally, a computationally rigorous sensitivity analysis, using Monte Carlo simulation methods, was completed to assess the combined impact of changing several factors at once. Table 3 presents the limits and estimated value for variables that are included in the Monte Carlo model. Separate probability distributions are formed for each of these factors and the sources for these distributions include HDR assumptions and existing data. The results from the Monte Carlo simulation are presented as a probability distribution of possible outcomes, given the range of possible inputs of uncertain parameters. Figure 5 shows the distributions of possible present values of total financial and social outcomes for all five alternatives, in both probability density function (PDF) and cumulative density function (CDF). The CDF has a useful interpretation for decision making because it can clearly indicate the probability that a condition holds, such as if total present value of benefits exceeds costs. Figure 5 shows that Alternatives 1, 2A and 2B all have a very narrow range of potential financial values, showing that costs exceed benefits for the modeled parameters. Alternatives 3A and 3B have a wide range of potential financial values, which is a function of the uncertainty in the RNG market. However, even with the wide range, a majority of the model runs indicate a negative financial value (i.e., benefits exceed costs for the modeled parameters) for the 3A and 3B gas utilization scenarios. CONCLUSIONS AND RECOMMENDATIONS Based on the analyses presented, the Water Pollution Control Bureau (WPCB) recommends proceeding with Alternative 3 (RNG) as the selected biogas utilization approach. The basis for this recommendation is as follows: -The RNG alternatives have the lowest net present value for the baseline conditions using conservative capital and operating costs. -Alternative 3A (RNG into pipeline) scored the highest in the County's non-financial scoring. The County found that the RNG alternatives would be less complex and result in fewer localized impacts than the CHP alternatives. -A sensitivity analysis concluded that when considering multiple variables, including RIN volatility and changes to electrical rates, Alternative 3A had a very high likelihood of being more financially advantageous than Alternative 2A. -The County has the ability to retain GHG credits if the biogas is used within Arlington County for transportation purposes. Should the biogas be used outside of Arlington County, the revenue from the RINs could be used to purchase an equivalent amount of GHG credits on the open market. -Benefits of on-site CHP are limited because the CHP size would not be sufficient to power the entire WPCP and the existing WPCP has adequate stand-by power. The County's current preference is for Alternative 3A (RNG into pipeline) over Alternative 3B (RNG as CNG) due to this option's diverse opportunities for end use customers, rather than relying on a specific direct customer. However, the final decision to inject RNG into the NG utility pipeline or use CNG will be made in the future as more discussions with the stakeholders are conducted.