attracting and marketing alternative technologies to the ... · o almost 3.8 million residents o...
TRANSCRIPT
© 2014 HDR, Inc., all rights reserved.
Attracting and Marketing
Alternative Technologies to the
Mid-Atlantic AreaShawn Worster, Associate Vice President , Senior Professional Associate
Lessons Learned/Getting It Done
Wrap-up
Welcome and Introductions
Meet the Presenter
Key Ingredients to a Successful Project
Case Studies
WELCOME AND INTRODUCTIONS
8,000+ staff
180+ offices
Multidiscipline engineering focus
INTRODUCING HDR
• Dedicated Solid Waste Resource Management Group combining expertise in…– Solid Wastes– Industrial Wastes– Municipal Wastewater
• Current Clients include City of New York, Los Angeles, Toronto, Honolulu, Durham/York and Peel Regions, San Jose
MEET THE PRESENTER
MEET THE PRESENTER
Shawn Worster
• Over 30 years MSW program implementation experience
• Technology Assessments
• Planning
• Project Development
• Procurement/Negotiation
KEY INGREDIENTS TO A SUCCESSFUL PROJECT
What a Municipality Needs?
Certainty
Certainty
Will I get the service I bargained for and what will it cost?
It’s all about risk management.
BACKGROUND
DOES WTE FIT IN THE WASTE HIERARCHY?
The role of WTE in an integrated waste management system has always been the subject of considerable debate.
Mo
st D
esira
ble
to L
east
Desira
ble
UNDERSTANDING WHERE IT FITS IN THE HIERARCHY
Prevention
Diversion
Disposal
Value of R
esources Decreases
Disposal C
apacity Needs Increase
Waste Reduction
(e.g. behavioral or
technological changes)
Waste Reuse &
Recycling
Source Separated
Composting & Anaerobic
Digestion
Thermal Treatment with
Energy Recovery
Landfill with Energy Recovery
Decreased Demand for Raw
Materials & Energy Use:
Design for Environment
Recovery & Reuse of Recyclable
Materials
Recovery or Organic Matter
Recovery or Energy
Recovery of Energy
Recovery of Energy From Methane
HOW DO WE GET TO ZERO WASTE?
ZERO
WASTE
Extended Producer
Responsibility (EPR)
Increase Diversion
ProgramsPublic Outreach &
Education
Alternative Waste
Conversion Technologies
OVERVIEW OF KEY PROJECT ELEMENTS
Site
Waste Supply & Characteristics
Technology
Energy/Materials Market
Residuals Management Capacity
Economics & Business Case
Project Champion(s)
Procurement Process
Experienced and Capable Vendor(s)
Implementation Team
Local, Regional, Provincial & Federal Support
Regulatory Framework
Education, Communications, and Consultation
Major Milestones
Ownership?
Importance of clarity & transparency in data; evaluation;
decision-making processes; and project structure
Site
Residuals Management
Technology
Markets
Waste Supply
Education/Outreach
ELEMENTS OF SUCCESSFUL PROJECTS
SOME ATTRIBUTES AND UNCERTAINTIES
Attributes
Ownership
Size
Access
Utilities
Approvability
Location
Uncertainties/Risks
Vendor or Public Site
Approvability
Subsurface conditions
Pre-existing environmental conditions
Political and Public Acceptance
Site
Need to Understand Appropriate Risk Allocation
SOME ATTRIBUTES AND UNCERTAINTIES
Attributes
Permits
Location
Capacity
Responsibility for Management
Host Community
Uncertainties/Risks
Types & Quantities
Environmental Characteristics
Disposal Location & Costs
Beneficial Reuse Options
There Are Always Residuals
Residuals
SOME ATTRIBUTES AND UNCERTAINTIES
Attributes
Availability/need/price of power
Other Energy Users (steam, hot water,
fuel)
Other By-Product Users
Competition
Uncertainties/Risks
Quality of products
Quantity of products
Environmental character
Availability/Sustainability of markets
Price
Technology Choice Affects Market Uncertainty
Markets
POTENTIAL MARKETS
Heat Electricity Gas Fuel Solid FuelSoil
Amendment
Inputs (Waste Streams)
Biogas a a aBiosolids a a
Source Separated Organics a a aLandfill Gas a a a
Key Market Characteristics (Non-financial)
Access Mechanism Pipeline Grid Pipeline Surface Transport Surface Transport
Nature of Market LocalOn-site or
Widespread
Local or
WidespreadIndustry Specific
Agriculturally
Based
Demand Variability Risk High Stable High or Stable High High
Market Security Risk Customer Specific Reliable Variable High High
Primary Barriers Opportunity Administrative Product Quality Product Quality Product Quality
Energy Products
Outputs
SOME ATTRIBUTES AND UNCERTAINTIES
Attributes
Type and Source of waste
Waste collection practices
o Public vs. private
o Source separated
Uncertainties/Risks
Control of waste stream
Quantity
Composition & Quality
o Btu content
o Contaminants
Impacts of current and future diversion
programs
Regulations
Must Have Supply of Acceptable Waste
Waste Supply
SOME ATTRIBUTES AND UNCERTAINTIES
Attributes
Waste Stream Dependent
Best-Fit Technology Class
Site Requirements
Performance Guarantees
Environmental Performance
Uncertainties/Risks
Costs
o Capital
o Operations & Maintenance
Schedule for construction
Vendor Experience/Capabilities
Readiness
Performance
The Technology Must Work
Technology
WHAT DOES IT INCLUDE?
Mechanical
o Recovery
o RDF
Thermal
o Proven (mass burn, RDF)
o Emerging (gasification, pyrolysis, plasma arc)
Chemical
o Emerging (hydrolysis, catalytic depolymerization)
Biological
o Anaerobic Digestion
WILL WANT TO KICK THE TIRES WITH STEEL TOED BOOTS!
Where is the technology working at a comparable scale?
How does the technology or process fit into your solid waste system?
What feedstock(s) has the technology demonstrated it can reliably process? How does that
compare to your waste stream?
How much will it cost? And, what’s included in those costs?
What financial backing does the contractor/vendor if it does not work as planned or fails?
o Parent Guarantees?
o Other Financial Backers?
What are the metrics used to determine the successful demonstration of the technology or
process?
SOME ATTRIBUTES AND UNCERTAINTIES
Attributes
Public Funding – reserve fund, grant,
loans
Private Financing – debt, equity
Possible Revenue Streams – tipping
fees, energy revenues, by-product sales,
general taxes
Uncertainties/Risks
Funding
Availability of Public (e.g. P3 Canada) or
Private Funds/Grants
Interest Rates
Repayment of Debt
Financial capacity of vendors
Product/By-product pricing
POSSIBLE RISK TAKERS
Communities
Technology Firm
Guarantor
Product Buyers
Bondholders
Insurance Companies
o Casualty
o Performance
Taxpayers
Stockholders
Investors
RISK ALLOCATION – PRIVATE RESPONSIBILITY
Demonstrated Facility Performance Treating Similar Feedstock
Proof of Scale-Up
Design/Performance Guarantees
Environmental & Emission Performance
Securing Permits
Realistic Economics
Private Sector Champion
Requires a Viable Technology
RISK ALLOCATION – PUBLIC RESPONSIBILITY
Defined Quantity of Feedstock at Set Fee (Put or Pay Risk)
Defined Range of Feedstock Composition
Political Willpower / Public Sector Champion
Requires Waste Flow Commitment/Support
RISK ALLOCATION – SHARED RESPONSIBILITY
Site Selection
Environmental Review/Land Use
Power Purchase Agreements
Political Support
Financial Commitment
Requires Cooperation and Championing
from both Public and Private
RISK ALLOCATION - UNCONTROLLED
Uncertainties/Risks
Change-in-Law
Hurricanes, tornados, fire, floods, etc.
Terrorism, insurrection, war
Strikes
Macro-economic conditions
Possible Risk Taker
Public
Insurance/Joint
Joint
Negotiated
Joint – (price indices & pass through costs)
Uncontrollable Circumstances are events beyond anyone’s control that have a
material adverse effect on performance and costs.
A project of this magnitude involves:
Aligning the priorities of the State, Regional and municipal governments.
Engaging a strong commitment from all parties involved in the project.
Developing public trust built on an “open-and-transparent” process.
Developing and maintaining a solid financial strategy.
EFW PROJECT CHALLENGES
KEY ISSUES TO EXPECT
Impacts to Human Health
Impact to Ecological Health
Air Emissions
Cumulative Effects
Truck Traffic Impacts
Impacts to Local Agricultural Operations
Compliance and Monitoring
Impact to Property Values
Competition with Waste Diversion
Energy Output and Efficiency
Costs and Economic Viability
Facility Ownership and Operational
Responsibility
Residue Management
Understanding when, how and to what degree to respond is critical
CASE STUDIES
FREDERICK COUNTY, MARYLAND
Background:
o ~220,000 Residents, located in Metro-D.C. Area
o 250,000-275,000 tons/year
Drivers/Objectives:
o 2005 Feasibility Study
• Increase Recycling from 35-60%
• End Long-Haul Transfer
o Energy Recovery
CITY OF LOS ANGELES
Background:
o Almost 3.8 million residents
o Approximately 4,000 tons/day disposed of via long-haul landfill
o Developed a Zero Waste Management Plan to meet aggressive
diversion goals (90% Diversion)
Drivers/Objectives:
o Aggressive diversion goals
o Desire to implement an Alternative Technology Facility
REGION OF DURHAM
Background
o Approximately 200k tons/year of MSW across 8 municipalities
(~625k residents)
o Blue Box and Green Bin Programs
o Public Drop-off, HHW, &Composting (organics)
o 55-60% total diversion
Drivers/Objectives:
o Political: Ban on Export to Michigan
o Environmental: No new landfills
o Electricity and District Heat Generation
SUMMARY OF SHARED OBJECTIVES
Increase Diversion
Reduce Out-of-Region landfill disposal; and
Generate Renewable Energy
SHARED CHALLENGES
No True Greenfield WTE Facilities built in North America in two decades
Local Airshed Challenges & Unsure Regulatory Environment
Public Opposition to siting new WTE facilities
Poor Economy coupled with high capital costs and low energy prices
Site
Waste supply & characteristics
Technology
Market revenues: energy & materials
Residue management
Project funding
Economics & Funding
Project champion(s)
KEY PROJECT ELEMENTS
Procurement processes
Experienced and capable vendor(s)
Implementation team
Local & regional support
Regulatory framework and processes
Communications, consultations and
education,
Schedule milestones
STAKEHOLDERS TO BE CONSIDERED
Municipal Partner/Co-Owner
Member Municipalities
Non-member Municipalities
The Public
Regulators
Health Authorities
Vendors
Media
NGOs & Other Interest Groups
Others?
KEY ELEMENT #1: COMMUNICATION
Develop protocols to address each category of participant:
• Media
• Public:
o Consultation (Regulatory Requirement vs. Project Need)
o Education requirements (getting knowledge out)
o Promotion (getting the message out)
• Regulators (Strategy to engage, timing of engagement, spokespeople, understand existing
institutional knowledge, etc.)
• Vendors (Protocol to address vendor inquires)
• Others
KEY ELEMENT #2: WASTE SUPPLY
Define Sources, Types & Quantities
o MSW
o Biosolids
o Others (biomass, C&D, SSO)
Waste Composition
o Ultimate Analysis
o Heating Value (LHV or HHV)
Technology(ies) selected must be the best-fit for all waste types
Technology vendor qualifications considered, include:
Reference/Demonstration Facility Requirements
Applicability of Feedstocks to System
Minimum Years of Actual Operating Experience
Operating Performance Data
Detailed Design Information (mass and energy balances)
Type of Energy Recovery and Efficiency
Environmental Performance
Residuals and By-Product Management
Site and Utility Requirements
Capital and Operating Costs
KEY ELEMENT #3: TECHNOLOGY
KEY ELEMENT #4: SITING
Compliance with regulatory process requirements
Balance local interests (opposition or support)
Include integrated systems approach (i.e., collection and transfer logistics)
Different approaches to the timing of site identification:
• Before vendor is engaged (Durham & Frederick approach);
• As part of vendor engagement (Being considered by MetroVan); or,
• After vendor is engaged (Los Angeles Approach).
Preliminary market scan to identify potential site opportunities that may exist
(Frederick, Durham & L.A.)
KEY ELEMENT #5: PROCUREMENT
Traditional Procurement Approach: Design Bid Build (DBB)
Alternative Procurement Methods: Engineering, Procurement & Construction (EPC)
Design, Build (DB)
Design, Build, Operate & Maintain (DBOM)
Private Finance Options:
o Design Finance Build Operate (DFBO)
o Design Finance Build Own Operate (DFBOO)
o Design Finance Build Own Operate Transfer (DFBOOT)
KEY ELEMENT #5: PROCUREMENT (CONT.)
Competition
How does lack of competition affect the process?
o Increased price
o Potentially longer schedule
o More difficult application of preferred risk posture
How can lack of competition be mitigated?
o Modified criteria for qualification (greater flexibility)
o Advertising and selling of project
KEY ELEMENT #5: PROCUREMENT (CONT.)
Number of Responses to RFQ and RFP:
RFQ 8 189 5
RFP 3 93 4
KEY ELEMENT #6: FUNDING
Funding Options
Pay As You Go (Cash)
Government Bonds/Debt
Private Activity Revenue Bonds
Private Equity/Debt
Grant Programs
KEY ELEMENT #7: PROJECT CHAMPION
Political
Public Works/Regional Staff
The Public
Respected Business or Community
Leader
Academics
Others?
A Project Champion is Critical for Project Success
I gotchya
back!
FREDERICK COUNTY, MARYLAND
47
Key Project Element Comments
Communications Public Meetings/Public Reports and Other Presentations
Waste Supply1,500 tons per day MSW +
Up to 150 wet tons per day of Biosolids
Procurement Process REOI RFQ RFP
Technology Wheelabrator/Von Roll Mass Burn (2 x 750 tpd units)
Site Brownfield site/Adjacent to Existing County WWTP
FundingTraditional: Authority Issued Revenue Bonds/Debt
Total Capital Cost – $332,000,000 (O&M Fee = $19M)
Project Champion(s) Staff/ Commissioner Public Works
CITY OF LOS ANGELES
Key Project Element Comments
Communications• Over 200 community meetings
• Significant allocation of additional outreach
Waste Supply1,100 tons per day MSW City controlled, “Black Cart” waste, plus 200 TPD for
Emerging Technology
Procurement ProcessREOI RFQ RFP
(2 Vendors Selected: 1 Commercial & 1 Emerging Vendor)
Technology Green Conversion Systems/ Mass Burn w/Front-End MRF
Site City Provided Site - To be determined
FundingPrivate – Vendor is responsible for Financing
Project Costs - Confidential
Project Champion(s) To Be Determined – Initially City Council
REGION OF DURHAM
Key Project Element Comments
Communications Public Meetings/Public Reports and Other Presentations
Waste Supply 154,000 tons per year MSW (approx. 500 TPD)
Procurement Process REOI (for sites) RFQ RFP
Technology Covanta Energy/Martin Mass Burn (2 x 260 tpd units)
Site Brownfield site/Adjacent to Existing Regional WWTP
FundingFederal (Canadian) Gas Tax Funds
Total Capital Cost – $255,000,000 (O&M Fee = $15M)
Project Champion(s) Regional Chair/ Regional Works Staff
PROJECT STATUS
Permit Approvals Received 2014
Site Selection Analysis
Negotiations with Emerging Vendor Broke Off in March 2012
Negotiations with Commercial Vendor on hold
In month 34 of the 40 month construction schedule
Commissioning Major Systems underway
CITY OF SAN JOSE – ORGANICS DIVERSIONOBJECTIVES OF RFP
Public Private Partnership part of City’s Green Vision Goals
o Zero Waste by 2022
o Energy from Waste
City Commits Entire Commercial Waste Stream at Set Price
Vendor Commits to Performance Guarantees
Vendor Free to Offer Multiple Collection, Processing and Technology Scenarios
Contract Duration is 15 years
SAN JOSE - COMPREHENSIVE EVALUATION
30% Cost Proposal (Costs/Technical scored separately)
• Revenue Requirements, Cost Reasonableness
5% Environmental Stewardship
• Support of EP3, Corporate Environmental Commitment
30% Qualifications and Experience
• Comparable Experience, Financial Strength, Corporate History
35% Technical Proposal
• Customer Service & Convenience, Innovation, Green Vision,
Implementation, Environmental Impacts
ANALYSIS OF ORGANICS PROPOSALS
Three Organic Streams (varying contamination levels)
Feedstock
• Presorting
• Anaerobic Digestion
• Composting
• Existing vs. New Facilities
• In City vs. out of City
• Transfer issues Location
Technology
ZERO WASTE ENERGY DEVELOPMENTORGANICS PROCESSING
Anaerobic Digestion – Dry Fermentation
• Field-Tested European System
• 1st Commercial-Scale US Implementation
Odors and GHG Emissions Managed in Enclosed System
Experienced withTechnology Innovation
COMPATIBILITY OF ORGANICS AND COLLECTION (MIX AND MATCH)
Organics Proposals• Organics processing
Collection Proposals
• Collection system
• Facility processing
New Agreements
Terms• High Diversion Targets
• Customer Service Standards
• City Sets Rates
• Non-Delivery Penalties
• Exclusive rights
• Specs for Organics to ZWEDC
• Processing Audits
New Commercial System 2012-2027
MEETING GREEN VISION GOALS
200 Regional Green Jobs
Zero Waste by 2022
50 Alternative Fuel Vehicles
Renewable Energy from Waste
Lower System Carbon Footprint
LESSONS LEARNEDGETTING IT DONE
Importance of Project Champion
Structuring Procurement Process
Establishing Team
Siting
Energy Market Screening Options
Developing Selection Criteria
Establishing Terms of Reference and Approval Processes
Financing
Public Outreach
Regional and Provincial Support
Establishing Desired Business Structure and Defined Risk Allocation
Putting Key Ingredients in Place
KEY LESSONS LEARNED
KEY LESSONS LEARNED (CONT.)
Know your waste stream
EfW is the last piece of the puzzle
Make sure that the Facility is “right sized”
Communicate, Communicate, Communicate
Location, Location, Location
Identify a Political Champion
Establish a process that will withstand several election cycles
LESSONS LEARNED (CONT.)
Purpose: Define the Overriding Goal/Purpose Prior to Considering Conversion
Technology
o Anticipate need to resolve waste flow control
o Cost
o Diversion hierarchy
o Value of public support
Understand Conversion Technology Limitations Due to Differences in Feedstock
LESSONS LEARNED (CONT.)
Allocate Risk According to the Entity Controlling Performance
Technology Provider/Development Partner
o Technical performance and related guarantees should be assumed by a strong Private
Guarantor that offers
o Financial Strength
o Expertise Operation of the Technology
o Construction strength
o Sufficient Contractual limits of liability
Both Parties Should Secure Performance Relief for Uncontrollable Circumstances
(UCCs)
GETTING IT DONE ON THE PRIVATE SIDE
Know the Players • Understand the System- your role as part of an integrated resource management system
• Understand the Regulatory Framework
• Understand the Politics and Process
Bring your “A” Game • Assemble as many of the key ingredients as you can
o Technology
o Team
o Funding
o Site?
The more you bring to the party,
the better your chance for success!!
GETTING IT DONE ON THE PUBLIC SIDE
Know your Needs • Quantity and Characteristics of Your Waste over the planning period
• Anticipated changes in System
• Know what your goals are
Know your Assets • Do you have a site?
• How will you fund the capital costs?
• How strong is your team?
Know your Risk Appetite • Know your stakeholders
• Identify your “third rails”
Assemble your team
Engage
The clearer you are in defining your needs,
the better your chance for success!!
WHAT IS NEEDED TO MOVE FORWARD?
Continued need for education at all levels on potential impacts
and benefits.
Need for recognition of where EFW fits within waste hierarchy,
the definition of waste diversion and recovery.
A clearer understanding of where EFW will fit as a “renewable”
form of energy and what that means.
Cooperation amongst all levels of government
WHAT DOES THE FUTURE HOLD?
The next few years will still be a struggle.
Natural gas prices have impacted the price point for energy
The role of new and emerging technologies will evolve
Continued changes and uncertainty in the regulatory environment complicates progress
on facility design.
Progress has been made, through regulatory change and the perseverance of innovative
municipalities and corporations.
The public is becoming more aware of the alternatives and their role.
IN THE FUTURE OF WASTE…
Wrap-up Questions?
