Water & Resource Recovery Center ArticleCopyrighted
April 6, 2020
City of Dubuque Action Items # 5.
ITEM TITLE: Water & Resource Recovery Center Article
SUMMARY: City Manager providing a copy of the "Food Waste Co -
digestion at Water Resource Recovery Facilities" article
from Water Environment & Technology (WE&T)
Magazine that features Dubuque's Water & Resource
Recovery Center.
SUGGESTED DISPOSITION: Suggested Disposition: Receive and File
ATTACHMENTS:
Description Type
Water and Resource Recovery Center Recognition City Manager Memo
Article Supporting Documentation
Masterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Water and Resource Recovery Center Recognition
DATE: April 1, 2020
Dubuque
*Merin City
11 IIi'
2007.2012.2013
2017*2019
The City of Dubuque spent $70 million to replace the Sewer Plant that incinerated waste
with a Water Resource Recovery Center using anaerobic digestion where the only three
by-products are clean water, agricultural fertilizer and methane gas. The City then
partnered with a private company to invest the capital to clean the methane and turn it
into natural gas (BioCNG) that is sold back into the Black Hills Energy grid and bought
by companies wanting to lower their carbon footprint. The City also uses some of the
BioCNG to turn three electrical turbines that allows the facility to substantially reduce
the purchase of electricity from the grid. The City also uses the heat off of the
anaerobic digestion process to heat the facility's buildings. This saves the City sanitary
sewer utility hundreds of thousands of dollars a year in electrical and natural gas costs,
reducing the wastewater utility customer's bills, including residential, business and
industry.
Besides regular waste from homes, businesses and industry the City now receives from
the sanitary sewer collection system, the City is saving major industrial employers
money by accepting High Strength Waste. This is waste the EPA will not let the
industry put down the sewer, but they still must find a way to get rid of it. Previously
these companies were trucking the High Strength Waste hundreds of miles out of state
at great costs. This includes Hormel, Rousselot, John Deere, and West Dubuque
Bio-Diesel in Farley, Iowa.
The attached article titled. "Food Waste Co -digestion at Water Resource Recovery
Facilities" from Water Environment & Technology (WE&T) Magazine is another example
of the recognition this facility receives as stated, "The transformation of the waste water
sector requires Water and Resource Recovery Facilities to be innovative and
resourceful. "Dubuque is one of, "Fewer than 1 in 10 of the 14,000 Water and Resource
Recovery Facilities use anaerobic digestion to process wastewater solids..." and
Dubuque is on the leading edge of this sound environmental practice that supports the
success of local industry while saving the environment.
Michael C. Van Milligen
MCVM:jh
Attachment
cc: Crenna Brumwell, City Attorney
Teri Goodmann, Assistant City Manager
Cori Burbach, Assistant City Manager
William O'Brien, Water & Resource Recovery Center Manager
Gina Bell, Sustainable Community Coordinator
Jill Connors, Economic Development Director
Rick Dickinson, President & CEO, Greater Dubuque Development Corporation
2
Evaluating the business case can identify
benefits to the triple -bottom -line
Carol Adaire Jones
The wastewater sector's utility of the future
(UOTF) initiative envisions the sector
shifting to a circular economy business
model — whereby wastewater treatment
plants disposing of waste transform into water
resource recovery facilities (WRRFs) managing
critical resources. Co -digestion of high -strength
organic wastes (HSOW) with wastewater solids
is a core component of the circular economy. By
diverting food waste from landfills, incinerators, and
wastewater treatment and by recovering valuable
renewable energy and nutrient products from
digestion residuals, co -digestion can benefit the
triple bottom line of WRRF finances, environmental
stewardship, and community well-being.
However, adoption is limited. Fewer than 1 in
10 of 14,000 WRRFs use anaerobic digestion (AD)
to process wastewater solids, and fewer than 1 in 10
of those are co -digesting food wastes (fats, oils, and
grease [FOG]; food processing residuals; and food
scraps). There appears to be significant untapped
potential for co -digestion.
A contributing factor to this lack of co -digestion
is the sector's risk -averse corporate culture. As a
result, WRRFs can be averse to adopting co -digestion
and producing renewable energy from the increased
biogas because they are not core wastewater treatment
services, and they are associated with various potential
financial, operational, regulatory, stakeholder/political,
and organizational risks and impediments.
To stimulate and inform further evaluation
of co -digestion, the Water Research Foundation
commissioned a series of reports exploring the
technology and economics of implementing co -
digestion. A recent report funded by the Water
Research Foundation, Food Waste Co -digestion
at Water Resource Recovery Facilities: Business
Case Analysis, represents the last logical link in
The City of
Dubuque, Iowa, is
very committed
to sustainability,
which motivated the
transformation of its
wastewater plant
into a water and
resource recovery
center. A very large-
scale investment
project to upgrade
the outdated
and inefficient
facility provided
an opportunity to
add anaerobic
digestion and
energy generation
facilities in 2013.
Using a public -
private partnership
with BioResource
Development of
Omaha, Neb., in
2018, the utility was
one of the first to add
a renewable natural
gas facility at a
co -digesting WRRF.
City of Dubuque
WWW.WEF.ORG/MAGAZINE I MARCH 2020 I WE&T
27
► ► ► ► ► ► ► ► Co -digestion
When a rapidly
expanding local
brewery threatened
to overwhelm
the wastewater
treatment capacity
of the Stevens Point,
Wis., water resource
recovery facility,
installing a pipeline
to divert brewery
waste to anaerobic
digestion was a
triple -win strategy.
The change
avoided a huge
investment to
expand treatment
capacity, reduced
energy costs
by decreasing
aeration needs
for treatment and
increasing biogas
production, and
protected the
ability to attract
new wet industries
to area. City of
Stevens Point,
Wises, Public Utllitles
Department.
The full report 1.1
can be accessed
online at bit.ly/
codigestion-TWRF.
the series. This report provides insights into the
business strategies that utilities have used to address
the range of impediments and risks WRRFs face
in adopting co -digestion, and outlines a diagnostic
framework each WRRF can apply to analyze its
opportunities and potential business strategies
for co -digestion. Building on prior research about
strategies to address operational and regulatory
risks, the primary focus is about strategies to address
financial opportunities and risks; other types of
risks are addressed to the extent that they affect the
facility economics or access to capital.
UOTF `Innovation Ecosystem'
Framework
The transformation of the wastewater sector
requires WRRFs to be innovative and resourceful.
The pursuit of innovation is central to the UOTF
vision of a clean water "innovation ecosystem,"
centered around wastewater utilities. Other key
elements include technology developers and
suppliers, the finance community, energy utilities,
public and private elements of the solid waste sector,
and state and municipal governments, which define
the market and policy environments in which each
WRRF operates. Through the combined efforts
of all ecosystem members, utilities are enabled to
take and manage risks as they increasingly manage
valuable resources to the benefit of customers, the
community, and the environment. Co -digestion can
provide many benefits to this ecosystem as outlined
in Table 1 on p. 29.
The UOTF innovation ecosystem model provides
the organizing framework for the research. To
inform the analysis, structured interviews were
conducted with more than 65 organizations,
including wastewater utilities, and other innovation
ecosystem representatives from the solid waste,
energy, technology, project development, and
government sectors.
The report presents six major case studies and 25
thumbnail sketches, which were chosen to represent
the full range of WRRF characteristics, policy and
market environments, and strategic choices in
food waste feedstocks, energy uses, biosolids uses,
contracting and financing options. Included in the
thumbnail sketches are WRRFs that decided against
adopting co -digestion, or suspended or cutback
programs in place. Table 2 (p. 30) summarizes key
elements of the six utilities in the major case studies.
WRRF Business Strategy Choices
The first challenge a utility faces is to determine
if co -digestion fits with its mission and long-term
strategic goals. If it does, the next challenge is to sketch
out a long-term business strategy and implementation
plan for a mature utility co -digestion program as well
as to develop detailed investment project proposals, as
they are needed to carry out the plan over time.
Six key decision elements are integral to developing
a long-term co -digestion strategy. Four elements are
production related:
• AD co -digestion capacity needs, technology,
and siting;
28
WE&T I MARCH 2020 I WWW.WEF.ORG/MAGAZINE
► ► ► ► ► ► ► ► Co -digestion
• organics feedstock supply;
• biogas supply and energy products, uses, and
technologies; and
• biosolids management.
The final two elements relate to the structure of
contractual relationships and the choice to establish a
public —private partnership (P3), and financing options.
To inform the choices for each element and the
design of integrated strategy, the utility analyzes
its market and policy context to determine what
opportunities and risks co -digestion could provide and
how to leverage them to advance the utility mission
and long-term goals.
Successful WRRFs: Co -Digestion
Strategies and Programs
In this section we report key findings from the case
studies of operational co -digestion programs.
Drivers. The financial drivers for co -digestion most
frequently mentioned by WRRFs were rising energy
costs and financial support programs to promote
greenhouse gas mitigation, renewable energy, and food
scrap diversion. Operational and regulatory drivers
included underutilized AD or energy infrastructure,
new requirements for biosolids management, and the
need to preserve wastewater treatment capacity (and
the ability to accommodate new business moving
into the area) in the face of dramatically expanding
pretreatment program wastes that otherwise would
overwhelm the wastewater treatment capacity.
Environmental and community drivers included
providing a service to FOG, food processing, and
food scrap waste generators (particularly ones from
their service area) seeking new outlets to comply with
more stringent regulatory requirements; supporting
economic development; and supporting community
goals for renewable energy, greenhouse gas (GHG)
reduction, and food scrap diversion.
Decision Criteria for Investments. Many co -
digestion projects were required to meet return on
investment or payback period tests, though the
thresholds for approval varied widely. For non -core -
mission projects, the Los Angeles County Sanitation
District uses 5 to 10 years as a maximum payback
target, whereas Stevens Point, Wis., uses a 20-year
payback threshold. Various WRRFs placed different
requirements on these projects in non -core business
lines, including maintaining or improving water
quality, no detrimental effect on facility operations, and
no effect on taxpayers.
Central Marin Sanitation Agency (San Rafael,
Calif.), and the City of Dubuque, Iowa, combined
co -digestion and energy projects with larger
investment projects for regulatory compliance or for
scheduled maintenance or upgrades in the utility asset
management plan, highlighting the financial value
co -digestion can contribute to the larger projects.
Scope and Costs of Co -Digestion Projects.
Successful co -digestion programs are typically
implemented over time in a series of projects or phases.
During initial projects to accommodate receiving
HSOW, the scale of investment varies tremendously
across WRRFs. This variation depends on what
facilities and process are currently available, the type
and quality of incoming feedstock supply, and the
current level of commitment to co -digestion.
For example, Victor Valley Water Reclamation
Authority (Victorville, Calif.) spent $10,000 to convert
an existing tank to a FOG receiving station, whereas
CMSA spent $2 million on a new organics receiving
station, which includes a 1.1-million-L (300,000-gal)
tank, mixing pumps, rock trap grinder, paddle finisher,
and odor control system. Among energy projects,
the costs of renewable natural gas (RNG) pipeline
injection projects vary widely depending upon pipeline
proximity and interconnection standards. These
standards vary across states and utilities.
Major Sources of Cost Savings and Revenues.
WRRFs also collect revenue from these projects.
The most frequently cited sources of financial
gain include tip fees (in some cases, with sufficient
Table 1. Potential Benefits of Co -Digestion
Financial
New tipping fee revenue
Energy cost savings
Increased energy security and resiliency
(In some cases) new revenues from
renewable energy sales, and biosolid product
sales
Reduced wastewater operating and
collection costs
Green payments for renewable energy
(RECs, RINS), GHG mitigation, food scrap
recycling
Environmental
Reduced GHG emissions from substituting
renewable for fossil fuels, reduced flaring
of excess biogas, and diverting food scraps
from landfills
Replacement of manufactured fertilizer with
recycled nutrients
Improved water, air, and soil quality and
healthier ecosystems
Community
Affordable disposal location for industry,
creating a business -friendly environment
Improved sewer management (reduced pipe
blockages and overflows) by digesting FOG
Cost savings, which lower the need for rate
increases
Increased resiliency of the community power
sector
WWW.WEF.ORG/MAGAZINE I MARCH 2020 I WE&T 29
► ► ► ► ► ► ► ► ► Co -digestion
revenues to support major AD upgrades as well as
receiving station investments), energy cost savings
and/or revenues, savings in wastewater aeration costs
by diverting liquid wastes from the headworks to
the digester, and savings in biosolids management
costs (and potentially revenues) by supporting
thermal dryers to create Class A Exceptional
Table 2. Key Elements of Major Co -Digestion Case Studies
Quality biosolids. They also cited financial incentive
programs providing grants or green payments.
Biogas and Biosolids Production. Biogas
production increased substantially from the addition
of co -digestion substrates. The rate of increase for
the facility increases with the number of facility
digesters involved in co -digestion and the amount of
haracteristic
Wastewater
Treatment (MGD)
avg daily dry
weather flow
City of Stevens
Point, Wis.
2.8
Township
(DPa) Municipal
Authority
i i�
City of Dubuque,
Iowa
7
Central Marin
Sanitation Agency
(San Rafael, Calif.)
7.5
Victor Valley
Reclerrewater
amation
Authority
(Victorville, Cal
11.3
Los Angeles
County Sanitation
Districts (Whittier,
a Calif.) iM
4
280
Drivers
Dramatic increase
in brewery
pretreatment
wastes;
Wis. Focus on
Energy technical
and financial
assistance;
Increasing
restrictions on
biosolids, effluents
Increasing
biosolids
management
challenges,
optimize beneficial
uses of on -site
generated biogas,
and reduce energy
costs
Community
sustainability
goals; Large-scale
investment to
upgrade outdated
facility provided
opportunity to add
AD and resource
recovery
Financial
support for GHG
mitigation; Calif.
organics recycling
mandate, diversion
goals; Marin
County's Zero
Waste Goal by
2025
High electricity
prices; Electric
power instability;
Financial support
for renewable
energy (subsidies,
tariffs and grants)
Calif. organics
recycling mandate,
diversion goals;
CA LCFS, US
RFS, South Coast
Air Quality
Management
District 1191
Vehicle Fleet Rules
Goals
Energy neutrality
and efficiency;
Keep operating
costs low; Service
to brewery waste
generators
Maintain
reasonable
customer rates,
Energy neutrality;
Provide reliable
outlet for local or
regional sources of
FOG and HSOW
Public health and
environment;
Energy efficiency
and neutrality;
Resource recovery,
Service to waste
generators;
Revenue streams
Support local
solid waste hauler
achieve food
scrap diversion;
Energy savings
and neutrality;
Use underutilized
digester and
energy equipment
Energyefficiency
and neutrality
(and later:
electricity to grid,
RNG to pipeline);
Improved
treatment process
control parameters
Provide food scrap
diversion option
for local haulers.
Convert waste
into renewable
energy and soil
amendments.
Major Sources of
Cost Savings
Wastewater
treatment, energy
Energy, biosolids
management
Staff, energy,
biosolids
management
Energy
Energy
Energy
Tipping Fee Rates:
FOG
(dropped FOG
for more valuable
feedstocks)
$1.16/gal
$0.06/gal
sliding scale:
$0.06/gal
(first 1500 gal.) to
no charge
(> 15,000 gal.)
$0.04/gal
NA
Food processing
residuals
$0.00606/gal,
from service
area, $0.03988/
gal, from outside
service area
$0.0378/gal
$0.03 to $0.06/gal
NA
$0.04/gal
n;\
Food scraps slurry
NA
$0.0378/ga1
NA
$0.0938/gal
$0.04/gal
$allon g($.104/
gal) CY2020
Total TippinFee
Revenues for Food
Waste
$110,000/year on
average
FOG = $387,400
(2018) Other
HSOW = $50,000
(2018)
$189,644
(FY 2019)
$150,000
(2017-2018)
$249,693 (2017)
$1.5 million
(FY2019/2020)
Feedstock
Contracting
Long-term
agreement with
brewery
G2E MOU for
food scrap slurry
with Divert
No contracts
Long-term MOU
for food scrap
slurry with Marin
Sanitary Services
No contracts
Current: 1-yr
contracts for food
scrap slurries
(multiple private
haulers; county
facility)
30 WE&T I MARCH 2020 I WWW.WEF.ORG/MAGAZINE
► ► ► ► ► ► ► ► Co -digestion
HSOW added to each participating digester. Biosolids
did not increase with co -digestion in four out of six
of the facilities.
Developing Trends
Resource Recovery Product Lines. More WRRFs
are slowly beginning to address the relatively
untapped potential of food scraps as an AD
feedstock. Innovative arrangements to supply the
new product of preprocessed food scrap slurries
suitable for digestion are helping. Many WRRFs
are now evaluating projects to produce RNG for
use as vehicle fuel or pipeline injection (typically for
vehicle fuel). The use of biogas for RNG can be an
Characteristic
City of Stevens Drra.)Township
Point, Wisauf Authority
Ciunicipalty of Dubuque,
IowaAI
Marin
Sam anon Agency
(San Rafael, Calif.)
Victor Valley
Reclal
amation
Authority
(Victorville, Calif.)
Los Angeles
County Sanitation
Districts (Whittier,
Calif.)
Onsite Feedstock
Pretreatment
Equipment
Bar screen, rock
trap, grit sump
pump, chopper
pump
Aerobic FOG
conditioning,
rock trap, grinder,
chopper pump
No equipment
Rock trap grinder,
paddle finisher
No equipment
Pending: grit and
plastics removal
Food Waste as
Share of Total AD
feedstock
34% of volume,
40% of TVS
12% of volume,
33% of TVS
22% of volume,
44% of TSS
° of volume
20 /°
10% of volume,
20% of TSS
9% of volume,
30% TSS (in the
1 co -digesting AD
out of 24 total for
demo project)
Biogas Production
(% increase; Total
with co -digestion)
°
100 /°;
100,000 scfd
°
78 /°>
267,000 scfd
33-78%;
300,000 to
400,000 scfd
80%;
280,000 scfd
(2018)
120%;
685,000 scfd
(2016)
33% in
co -digesting AD,
1.4% overall;
7,300,000 scfd
(demo project)
Biogas Uses
(beyond boilers)
1) CHP; 2)
[pending] biosolids
thermal dryer
1) Biosolid
thermal dryer,
2) CHP engine,
3)[pending]injection
additional CHP
1) CHP; 2)
RNG to pipeline
1
1) CHP; 2)
[pending] new
CHP for electricity
sales
1) CHP; 2)
[pending]
microgrid/battery
storage; RNG
g
production
1) CHP; 2) CNG
for onsite fueling
station; more CHP
or RNG pipeline
P p
injection [pending]
WRRF Energy
Sales Tariffs
Wisconsin Public
Service Renewable
Energy Tariff:
$0.10/kWh (peak)
and $0.05/kWh
(offpeak)
No energy sales
5% of gross RNG
and RINS sales
revenue
Electricity Sales
to Marin Clean
Energy at
$0.105/kWh
1) No energy sales;
2) [pending] net
metering sales
Spot market sales
to CA ISO Grid
Public —Private
Partnership
Structure
P3 in which
brewery and
WRRF share
costs of dedicated
pipeline and
HSOW receiving
station.
Future GESA for
expanded co-
digestion
DBFOM with
BioResources
Development for
RNG pipeline
injection
PPA with Marin
Clean Energy
(10-year contract)
1)PPA and lease
with Anaergia;
2) Negotiating
a DBFOM with
Anaergia for RNG
pipeline injection
NA
Biosolids
(% increase with
co -digestion)
12% Increase
15% Increase
Minimal change
Minimal change
No change
No detectable
change (demo
project)
Financing and
Grants
1) Wisconsin
Focus on Energy
grants, Build
America Bonds; 2)
WI Clean Water
Fund bonds
1) Municipal
bonds, 2)
municipal bonds,
PA Green Energy
Works Grant
IA State Revolving
Fund loans
Utility Capital
Investment
Accounts, CA
grants
Private sector
P3 funding, CA
grants
Internal funds, CA
grants
Key:
Numbers 1), 2), and 3) refer to separate co -digestion projects.
G2E: Grind to Energy; MOU: Memo of Understanding; scfd: standard cu ft per day; CHP: combined heat and power;
DBFOM: design -build -finance -operate -maintain;
PPA: Power purchase agreement; GESA: PA Guaranteed Energy Savings Act; NA: not applicable; TSS: total suspended solids;
TVS: total volatile solids; HSOW: high strength organic wastes;
RINS: Renewable Identification Numbers (RINs) under the Renewable Fuel Standard (RFS) Program; LCFS: Low Carbon Fuel Standard;
P3: Public —private partnership
WWW.WEF.ORG/MAGAZINE I MARCH 2020 I WE&T 31
f, ► ► ► ► Co -digestion
To respond to
California initiatives
for climate change
mitigation and food
waste diversion,
Central Marin
Sanitation Agency
(San Rafael, Calif.)
and the local solid
waste agency,
Marin Sanitation
Services, created
the Food2Energy
Program
partnership.
Extensive pre-
processing occurs
at both facilities
to generate a
clean feedstock
for anaerobic
digestion. CMS/\
4.471.4 0d WOW: . . I „1f Sakti lit SEC hardy
Iod W. {drr Dan
xd DIrn04
fnrtIng;PYrgss
Ku I:'
Rsttlaima Prat*
Swim) arid ihrec.dal FocdkilxIg
RN. HMoarlaihe hrd nr,hr Pura
AkwArroavxu11fee Leis! .roe iglvrJY/.bFnwrtoID! „h,.'
roxIlliu6FfiPro
hider ?Kati
wR IU x Zi1/414315rh
14T-T:arsF,.
Trrri
(tiered
u;Ylark
rgs.Da,Gref&+FOGF
tiKla� I}ss'_ Ire'
Flow%
Mils Ica
Swry wol
Wee 60Ctb-a.:
{liar+ S. viw
Crdd4 rmahrr
Wide
?FRUuk
Apqn
•
ik6leklmr
!pinks Men 1PlldigF0.1
1
Ta
RetenrIN YCCrising
1 rKat'll 4i5rlaWMr
I '%rililkrre plki
Aelpufilmil
IFU Pump Pdrer.g
HPM - . Emgr
IF;F6n
0] Li
Qlln¢q
9V' $ rMaTgyF grmerdiar
Suuhber
Sack RiAgagn.
aid
1.1
al %WI
Nulaed9rxipr
to Dear
{llrVl►'04�
alternative to, or in addition to producing renewable
heat and power. The relative values of subsidy
programs have shifted more in favor of production
of vehicle fuel. However, the decline in the price of
credits in the Renewable Fuel Standard program
and continuing price uncertainty due to the current
Administration policies have engendered a wait -and -
see attitude for WRRFs planning energy projects a
few years away.
Performance -Based Contracting. Though
WRRFs have been reluctant, and, in some cases,
prohibited by charter, to engage in P3s in the past,
they are moving into performance -based contracting
for new projects that are outside their core area
of expertise. This is notably the case for energy
projects and, especially, RNG projects. Benefits of
P3s include accessing expertise not available in-
house, shifting risks, and (infrequently) accessing
private financing to circumvent tight public
financing for non -core projects and potentially long
and politicized approval processes.
Impediments
Among WRRFs that evaluated co -digestion, the
primary reason offered for not going forward is
the lack of enough economic return. Contributing
factors cited include uncertain feedstock supply and
revenues, low energy prices (which mean low energy
savings), lack of access to energy markets to sell
electricity or RNG due to stringent interconnection
standards or unfavorable energy tariffs, scale too
small to attain economics of scale, and lack of
incentive programs to provide financial support.
Many WRRFs cite use of payback periods
as a decision criterion. It is unknown how the
financial returns would have increased if a
net present value had been calculated over the
lifetime of the equipment rather than the shorter
periods many cited. Nonfinancial reasons offered
for no-go decisions include not -in -my -backyard
concerns and changing municipal priorities as
political leadership changed.
Facilities have suspended co -digestion because
of changes in feedstock supply availability or the
need to invest in additional equipment not planned
or budgeted for. These changes were reinforced by
market changes that reduced the economic returns
as compared to the condition at time of adoption.
For example, one utility known as a
nationwide leader in co -digestion, found itself
confronting a combination of aging equipment
and reduced tipping fees and digester capacity
limitations. This situation raised questions about
the cost-effectiveness of continuing to accept
HSOW. Facing requirements for both near -term
and long-term capital investments to continue co -
digestion and competing priorities for capital, the
municipality decided to suspend the co -digestion
program for the time being. The mayor stated the
city would consider "refining the program when
financing terms become more favorable."
In several other cases, facilities cited the loss
of their sole food waste source — typically a
local food processor that moved away — and
limited incentives to pursue a replacement. The
facilities were close to their generating capacity
32 WE&T I MARCH 2020 I WWW.WEF.ORG/MAGAZINE
► ► ► ► ► ► ► ► ► Co -digestion
and at risk of flaring or energy prices had plummeted since
the time of the initial investment.
Some WRRFs continue co -digestion but cut back on the
quantity of food waste feedstocks accepted. For example, failures
of combined heat and power (CHP) equipment or thermal dryers
for biosolids prevented facilities from effectively using the level of
biogas or biosolids produced at their prior scale of co -digestion. In
other cases, WRRFs experienced digester issues due to problems
with the quality of some of their feedstocks; some of the affected
facilities were considering future investments in pretreatment
equipment to resolve the feedstock quality issues.
Successful WRRF Strategies
A successful business strategy for co -digestion will create
value and will manage the associated risks. However, the
specifics will vary for each utility because a successful strategy
Table 3. Solutions to Co -Digestion Impediments and Risks: Creating Value and Managing Risks
Access to Financial Capital
• Scarce financial capital (high debt load)
• Low priority for "non -core -wastewater"
projects
Feedstock: Operations and Economics
• Variable and uncertain quantity, quality
and price (tip fees) of feedstock supplies
• Landfill tip fees for food scraps are lower
than costs to supply food scrap slurry
Energy: Operations and Economics
• Cogeneration equipment difficult to
maintain, prone to shutdowns
• Access for selling electricity to the grid
may be constrained
• Access for injecting RNG into pipeline
may be constrained
• Cost savings/revenues maybe low and/or
uncertain due to
o Low energy prices
o Tariffs with high fixed and demand fees
• Air permits may be required when biogas
is used for incineration, drying, boilers,
co -generation
Biosolids: Operations and Economics
• May not have capacity to handle an
increase in biosolids with current
management options
• Accepting food waste may change quality
of biosolids, e.g., increase nutrient
loading in biosolids (as well as effluent)
• Evaluate potential for use of internal capital reserve funds.
• Explore availability of incentive program grants and loans.
• Consider below -market Clean Water State Revolving Fund loans.
• Consider a Public -Private -Partnership to provide financing.
• Link co -digestion investments with capital projects needed to comply with regulatory
requirements or implement needed maintenance/upgrades.
• Highlight the full set of financial, environmental and community benefits.
•
•
•
•
•
Conduct a market assessment of potential feedstock supplies, and implement a program
for market development and supplier retention.
Leverage regulations for more stringent requirements for FOG, liquid industrial wastes,
and food scraps to attract more suppliers.
Encourage solid waste agencies to enforce recycling mandates.
Encourage solid waste agencies to establish pricing across generator disposal options that
incentivizes recycling scraps.
Diversify food waste sources to avoid reliance on a single anchor supplier.
Explore new supply options for preprocessed food scrap slurries:
o Private market sources, including Waste Management, Divert, Grind2Energy,
as well as regional solid waste companies
o Collaborations with solid waste agencies
o WRRF onsite depackaging and slurrying
Use feasibility studies, pilots, and/or demonstration projects to evaluate facility impacts of
feedstocks before full implementation.
Invest in onsite pretreatment equipment to reduce operational challenges and O&M costs.
Establish long-term contracts where possible (most likely when supplier does
pretreatment), establish collaborative customer relationships when not — to ensure a
reliable supply and to reduce contamination.
•
•
•
Explore all energy products and onsite use/external sale options, taking into account
evolving market access, tariff structures, and incentive programs, including the following
products:
o Heat (onsite boilers, thermal dryers to produce Class A biosolids)
o Electricity
o Pipeline injection of RNG
o RNG for vehicle fuel production for local government fleets, direct sales,
or through RNG brokers
Diversify products and/or product outlets (onsite use and market sales).
Build in equipment redundancy to provide resiliency during downtime for maintenance.
Consider public -private partnerships to provide expertise and assume risks.
Negotiate Power Purchase Agreements, setting long-term prices.
Negotiate as a class with utilities/regulators for better contract terms.
• Impose air quality performance standards on private energy developers.
• Develop a collaborative approach with regulators.
• Optimize feedstock types and solids processing to manage impact on quality and quantity
of biosolids produced. Not all cases of co -digestion result in additional biosolids, it will
depend upon the relative share of co -digestion feedstock.
• Evaluate opportunities for producing new products for nutrients.
WWW.WEF.ORG/MAGAZINE I MARCH 2020 I WE&T 33
► ► ► ► ► ► ► ► ► Co -digestion
Focused on
achieving energy
neutrality, and
more recently
sending electricity
to the grid and
injecting RNG into
a utility pipeline
on its property,
Victor Valley Water
Reclamation
Authority
(Victorville,
Calif.) has used
public -private
partnerships (P3)
for its energy
development
projects, and is
the one case study
example of using
P3s for financing as
well as construction
and operations
because financing
capacity was
stretched thin due
to facility upgrade
projects. WWRA
staff photo
needs to be tailored to the utility. This tailoring
needs to take into account policy and market
environment, long-term mission and strategic
goals, organizational culture, and resources. As a
result, we do not offer a simple menu of business
case options or economic rules for revenues or
costs. Instead we provide concepts to lead custom
decision -making.
The right context is necessary to have a
successful co -digestion program. Every list of
essential elements for a successful co -digestion
program includes the need for a co -digestion
champion in the utility or municipal government.
Our research identified four other critical needs:
• enough site space for vehicles to deliver
feedstocks and for other equipment needs,
• a business mindset to resource recovery,
• a visionary utility board or municipal decision -
makers who will support projects beyond the
core wastewater mission that make economic
sense to ratepayers, and
• a location with access to a sufficient supply of
feedstock at a good price.
The first is a feasibility constraint; the next two
are additional organizational attributes, ones that
are associated with a UOTF orientation. The final
one pertains to the potential for achieving scale
for the program and generating revenues or cost -
savings; a corollary is locating in an energy market
where it is possible to generate energy cost -savings
and/or energy revenues.
A successful business strategy typically will
evolve over time, adding additional projects that
build on past successes. As a WRRF learns from
experience and improves the economics of resource
recovery over time, the strategic questions evolve.
For example, for AD capacity, the focus evolves from
identifying excess capacity, to rationing capacity to
the highest value sources, and, finally, to examining
the potential for co -digestion to support expansion
in AD capacity. For energy, the focus evolves from
achieving onsite energy neutrality, to breaking down
barriers to accessing the power grid, or exploring the
potential for supplying RNG to the market.
Best practices for the design of a successful
business strategy include the following.
Demonstrate that the project will not
compromise facility compliance with its
environmental permits. Central to the mission of the
wastewater sector are its important responsibilities
for public health and environmental quality.
Violation of those responsibilities can result in
substantial financial penalties.
Leverage available drivers in sync with WRRF
mission. Drivers include regulatory policies
pertaining to disposal of wastes, which can be a
source of feedstocks; market -based opportunities
to generate revenues and cost savings from
biogas use and biosolids management; policies
providing financial support to support investments
in sustainability; and utility and community
commitments to environmental quality and
community service.
34 WE&T I MARCH 2020 I WWW.WEF.ORG/MAGAZINE
► ► ► ► ► ► ► ► ► Co -digestion
Incorporate strategies to address
financial risks. Risk management
strategies include diversifying sources
and product outlets, establishing long-
term contracts, building in equipment
redundancies to allow for scheduled
or unscheduled maintenance
requirements, establishing long-term
contracts for purchasing feedstocks
or selling products, and using public —
private partnerships/contracts to share
operating risks (as well as construction
risks) with the private sector.
Employ a life -cycle perspective,
considering revenues and costs from
the time of initial investments through
replacement investments. It is critical
to assess whether the utility can
establish the operational and financial
capacity to support the program
over the long-term. This requires a
life -cycle perspective because the full benefits of co -
digestion typically will not accrue until the WRRF
has achieved a mature program with a balanced set
of feedstock supply and AD, energy generation, and
biosolids management capacity. Further, identifying
the full costs necessitates delineating capital
requirements over the life cycle of initial investment,
maintenance, and upgrades.
WRRF Solutions for Co -Digestion
Impediments and Risks
The findings from successful and unsuccessful
co -digestion programs highlight the importance of
conducting long-term planning and adopting risk
management strategies. Table 3 (p. 33) provides a
set of solutions to various impediments and risks
WRRFs may face, including access to capital and
the operational and economic risks associated
with feedstocks, energy, and biosolids. (The report
also includes solutions to impediments related to
making the business case to stakeholders outside
and inside the utility.)
Organizations in the innovation ecosystem
can be instrumental in finding solutions.
Two key sets of partners bear highlighting. A
range of partners in the private sector and in
municipal solid waste agencies are offering a
new product line — food scrap slurries suitable
for WRRF feedstocks — to address untapped
opportunities. Also, project developers are
offering P3s with performance -based contracts
that can provide guaranteed cost savings and/
or revenues for energy or feedstock projects
outside the core treatment mission, and further
that can supply private capital as an alternative
to municipal financing.
Evaluate, Implement
Co -digestion at WRRFs can be successful where
there is a fit with the organization culture, support
from the utility decision -makers for projects
outside of the core mission area, and market and
policy opportunities to create economic value. It
is important to recognize that co -digestion does
not fit all contexts. In some places, too many of
the essential elements may be missing. Evaluating
the business strategy thoroughly will provide a
strong basis for deciding whether a co -digestion
project should move forward. Even if the life -cycle
economic potential is not favorable at the moment,
a proper assessment may provide insights for what
needs to change and how to create a path toward
future co -digestion. '•
Carol Adaire Jones, Ph.D., is a Visiting Scholar
for Environmental Economics and Policy at the
Environmental Law Institute (Washington, D.C.)
and Co -Lead of its Food Waste Initiative. She was
the Principal Investigator on the WRF study. She can
be reached atjones@eli.org.
The Environmental Law Institute gratefully
acknowledges the Water Research Foundation's
financial and administrative assistance in funding
the project through which this information was
discovered, developed, and presented.
Co-authors of the WRF report were Co -Principal
Investigators Craig Coker (Coker Composting &
Consulting, Troutville, Va. ), Ken Kirk (former
Executive Director of National Association of
Clean Water Agencies, Santa Fe, N.M.), and Lovinia
Reynolds (ELI, Washington D.C.).
As a joint solid
waste/wastewater
agency, the
Sanitation Districts
of Los Angeles
County (LACSD)
developed an
extensive food
waste recycling
program, motivated
in part to facilitate
compliance by
its solid waste
stakeholders with
the state food
scrap recycling
mandate. With
an eventual goal
of handling 310
tonne/d of food
scraps, it has
developed a
diversified set of
sources including
private solid
waste haulers.
The program also
created its own
food scrap pre-
processing facility
at its Puente Hills
landfill. LACSD
WWW.WEF.ORG/MAGAZINE I MARCH 2020 I WE&T
35