Low-Emission Hybrid Cogeneration for Optimal Energy Resilience

Learning Objective
This presentation includes an assessment of the energy recovery system at a water resource recovery facility (WRRF), determining the optimal approaches for resiliency against:
- Increasingly stringent air emissions regulations
- Rising energy costs
- Electrical and gas grid outages
- Availability of adequate heat/power for permit compliance.

The audience should leave with an understanding of the risks and opportunities to the energy supply and production systems at a WRRF, how to mitigate those risks, how to capitalize on current financial and technological opportunities, and considerations for novel heat and power production systems, such as linear generators, fuel cells, and batteries.

Background Encina Wastewater Authority (Encina) serves a population of over 400,000 at the Encina Water Pollution Control Facility (EWPCF), with a capacity of 40.5 million gallons per day (MGD).
Encina commenced the Energy Resiliency Assessment (ERA), to:
1. Develop a combined heat and power (CHP) system to maintain air permit compliance
2. Prevent adverse effects during an outage of utility power
3. Develop a long-term plan for economic CHP replacement

Regulatory Drivers
The primary driver for the ERA was more stringent air quality limits, which, using formaldehyde as a surrogate, necessitated a 90% reduction.

The cogeneration (cogen) engines are the major contributor to these emissions, and therefore must achieve the required reduction. Table 1 presents the emissions design thresholds.

Operational Drivers
A primary goal is to eliminate black starts resulting from increasingly frequent disruptions in power supply from the grid. The ideal approach is onsite CHP production generating 100% of demands, only using the grid as a backup.

Cogen Alternatives
The existing engines must be upgraded or replaced for compliance with the formaldehyde limits. New alternatives considered various combinations of digester gas (DG) use (renewable natural gas (RNG) or fuel), as well as CHP source. Table 2 shows the summary of the new CHP technologies considered. Solid oxide fuel cells (SOFCs) and linear generators (LGs) were the most suitable technologies.

Project Structure and Financing
Significant energy incentives were available on a short timeline, including the Investment Tax Credit (ITC, 30-40% credit). Encina had a better chance of obtaining the ITC, if they implemented third-party owned and operated systems to provide power, and to monetize their DG as RNG.

Due to the uncertainty of pricing and incentives, the optimal way to determine the optimal technology and project structure (Encina owned and operated, third-party owned and operated, DG to fuel, or DG to RNG) was to allow the market to decide via a Request for Proposals (RFP) process.

#Recommended Project
The RFP process yielded 6 proposals, with a range of solutions and costs. The major finding was that the sale of RNG was not feasible as the capital costs were higher than expected, and the differential between natural gas purchase price for power, and RNG sale price, was too small. With no RNG, DG must be used for onsite for CHP, either in the existing engines, or via a new technology, all Encina owned and operated. As the capital costs for a full conversion to a new technology were too high, 3 final alternatives were considered:
1. 100% utility power
2. Existing engines + emissions controls
3. A low-emission hybrid, consisting of a 1 megawatt (MW) of LGs (cheaper than SOFCs) and existing engines + emission controls for the remainder of the power demand. (A 2 MW-hour battery was common to all alternatives)

The hybrid alternative is cheaper, and less risky than full-conversion to a new technology, and as LGs are more efficient than engines (45% compared to 31%), it allows 100% of the DG to supply 100% of the plant power. Table 3 presents the monetary comparison.

Encina selected the Low-Emission Hybrid - it requires the most capital, but has the lowest net present cost, and is eligible for the highest amount of incentives. It allows Encina to utilize 100% of its DG, where the engines would have been limited to 92% of current DG , due to the formaldehyde limit. Encina was able to safe harbor the ITC, and is implementing progressive design-build of the system.

Conclusions
Agencies are faced with increasing challenges to resiliently power their WRRFs. Regulations will become more stringent, power costs will rise, and the grid may become less reliable. WRRFs have an opportunity to be their own source of power, but it is a challenge to meet the diverse CHP needs in a cost and operationally efficient manner. A hybrid system can offer many benefits in transitioning a WRRF to an optimal future CHP system:
- Engines are often existing, reliable, and provide required heat
- Low-emission cogeneration, like linear generators and fuel cells, are more electrically efficient, and emit less pollutants
- Batteries provide instantaneous power supply, manage power quality, and can serve as a power equalization system to shave peaks

These components may be eligible for financial incentives, as communities seek to decarbonize and have a more decentralized, resilient grid. Encina has taken advantage of financial incentives, and will be optimally prepared future regulatory, economic, and operational challenges that may arise.