Water and Resource Recovery Center_Cogeneration ProjectMasterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Water & Resource Recovery Center - Cogeneration Facilities
DATE: July 23, 2011
Dubuque
Prigtd
All- America City
111'
2007
On November 1, 2010, the City Council approved the engineering services agreement
between the City and Strand to provide planning, design, and construction phase
engineering services for the cogeneration project. Strand has completed the planning
phase and is nearing completion of the design phase of the project. The project
currently includes the installation of electrical generation equipment (microturbines) that
will use biogas from the anaerobic digestion facilities and produce electricity, as well as
heat recovery equipment that will further recover energy as heat to improve the overall
alternative energy recovery efficiency from the biogas.
On January 27, 2011, Strand provided the attached Water & Resource Recovery Center
Cogeneration Facilities report to the City. Strand has recommended that three 200 -
kilowatt (kW) microturbines (600 kW total) be installed in lieu of the initially proposed
400 -kW system (two 200 -kW microturbines). If a 400 -kW system were installed initially,
a future 200 -kW microturbine would cost approximately $390,000 ($1,950/kW)). In
comparison, the additional cost to initially install a 600 -kW versus a 400 -kW system is
approximately $181,000 ($905 /kW), or roughly 50% Tess expensive on a "per kW" basis.
The 600 -kW system would not have significant additional structural, mechanical,
electrical, or HVAC costs compared to the 400 -kW system because the cogeneration
room and piping would basically be the same except for an additional hot water pump,
piping, and electrical work needed for the third heat recovery module.
The Iowa DNR has informed the City that there is a potential that this project may
receive principle forgiveness of 20% of the project costs, which could reduce the project
cost by about $500,000. At this time, however, there is no guarantee for this grant
funding. In addition, a $200,000 rebate from Alliant Energy is likely for the project.
One additional consideration is that the current major W &RRC project only included one
boiler for process and building heat — normally, two boilers are provided. That project
assumed that this cogeneration project would be implemented and the heat recovery
from the cogeneration project would provide the required process and building heat, and
the original boiler would be used as a back -up source of heat. Should the cogeneration
project not be implemented, a second boiler at the W &RRC is strongly recommended,
which would cost in the range of $150,000 to $250,000 to install.
On a cash flow basis, assuming the 600 -kW system is installed and the 20% principle
forgiveness and $200,000 rebate applies, the project's cash flow is slightly positive at
about $15,000 per year.
Full utililization of the capabilities of three microturbines would provide a positive cash
flow of $126,500 per year. To fully utilize the available generation capacity, the City
would need to develop partnerships to receive additional biodegradable material, for
instance, the Dubuque Metropolitan Area Solid Waste Agency, grocery stores,
hospitals, etc.
The funding plan for the up to $2.7 million capital project was intended to be any left
over funds from the approximately $5 million project contingency. The results of the
arbitration to determine the allocation of costs related to the mercury spill at the plant
will go a long way to determining the possible availability of those funds.
The reason to begin the process now is to increase the chances the City will qualify for
forgiveness of 20% of the SRF loan through the EPA.
Water Pollution Control Plant Manager Jonathan Brown recommends City Council
approval of the April 2011 Water & Resource Recovery Center Cogeneration Facilities
report submitted by Strand Associates, Inc., approval to submit the plan to the Iowa
Department of Natural Resources for possible low- interest loan funding through the
State Revolving Fund, and approval to complete the design services for bidding of the
cogeneration in the fall of 2011. This submittal would not require the City to borrow
funds through the State Revolving Fund, nor would the City be obligated to bid the
project or award a contract. However, submittal of this information is required if the City
wishes to be eligible for State Revolving Fund low- interest borrowing and a potential
20% principle forgiveness for the project.
concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Jonathan Brown, Water Pollution Control Plant Manager
2
•1
Masterpiece on the Mississippi
TO: Michael C. Van Milligen, City Manager
FROM: Jonathan Brown, W &RRC Manager
SUBJECT: Water & Resource Recovery Center — Cogeneration Facilities
DATE: July 15, 2011
INTRODUCTION
Dubuque
bikd
AA- AmedcaCity
Hill,
2007
This purpose of this memorandum is to seek concurrence with the April, 2011 Water &
Resource Recovery Center (W &RRC) Cogeneration Facilities report submitted by
Strand Associates, Inc. (Strand), to approve its submittal to the Iowa Department of
Natural Resources (Iowa DNR) for possible low- interest loan funding through the State
Revolving Fund (SRF), and to approve the continuation of the project to complete the
detailed design phase of the project to enable the project bidding documents to be
completed by the fall of 2011. This submittal would not require the City to borrow funds
through the SRF, nor would the City be obligated to bid the project or award a contract.
However, submittal of this information is required if the City wishes to be eligible for
SRF low- interest borrowing and a potential 20% principle forgiveness for the project.
BACKGROUND
On November 1, 2010, the City Council approved the engineering services agreement
between the City and Strand to provide planning, design, and construction phase
engineering services for the cogeneration project. Strand has completed the planning
phase and is nearing completion of the design phase of the project. The project
currently includes the installation of electrical generation equipment (microturbines) that
will use biogas from the anaerobic digestion facilities and produce electricity, as well as
heat recovery equipment that will further recover energy as heat to improve the overall
alternative energy recovery efficiency from the biogas.
DISCUSSION
On January 27, 2011, Strand provided the attached Water & Resource Recovery Center
Cogeneration Facilities report to the City. Strand has recommended that three 200 -
kilowatt (kW) microturbines (600 kW total) be installed in lieu of the initially proposed
400 -kW system (two 200 -kW microturbines). If a 400 -kW system were installed initially,
a future 200 -kW microturbine would cost approximately $390,000 ($1,950/kW)). In
comparison, the additional cost to initially install a 600 -kW versus a 400 -kW system is
approximately $181,000 ($905 /kW), or roughly 50% Tess expensive on a "per kW" basis.
The 600 -kW system would not have significant additional structural, mechanical,
electrical, or HVAC costs compared to the 400 -kW system because the cogeneration
room and piping would basically be the same except for an additional hot water pump,
piping, and electrical work needed for the third heat recovery module.
The opinion of probable project cost for the project depends on whether a 400 -kW or
600 -kW system is installed, as well as the level of principle forgiveness and utility
rebates that may be applicable to the project. The Iowa DNR has informed the City that
there is a potential that this project may receive principle forgiveness of 20% of the
project costs, which could reduce the project cost by about $500,000. At this time,
however, there is no guarantee for this grant funding. In addition, a $200,000 rebate
from Alliant Energy is likely for the project. The range of potential project costs and
anticipated annual debt service payment (20 -year loan at 3.0% interest is assumed) is
summarized in the table below.
Scenario
Principle Forgiveness
+ Rebates
Total Loan
Amount
Annual Debt
Payment
400 -kW System
$0
$2,500,000
$168,000
400 -kW System
$700,000
$1,800,000
$123,000
600 -kW System
$0
$2,700,000
$181,000
600 -kW System
$740,000
$1,960,000
$134,000
The annual value of electrical production in the early years of operation is estimated to
be approximately $223,000 based on an average electrical production of about 400 kW
and 7 cents /kWH. The estimated annual maintenance costs are $87,000.
One additional consideration is that the current major W &RRC project only included one
boiler for process and building heat — normally, two boilers are provided. That project
assumed that a near future cogeneration project would be implemented (the subject of
this memorandum), and the heat recovery from the cogeneration project would provide
the required process and building heat, and the original boiler would be used as a back-
up source of heat. Should the cogeneration project not be implemented, a second
boiler at the W &RRC is strongly recommended, which would cost in the range of
$150,000 to $250,000 to install
On a cash flow basis, assuming the 600 -kW system is installed and the 20% principle
forgiveness and $200,000 rebate applies, the project's cash flow is slightly positive at
about $15,000 per year (see below):
Electrical Savings: $223,000
Annual Debt Service: ($134,000)
Annual Maintenance: ($87,000)
Boiler Cost Avoidance (debt service): $13,000
Net Cash Flow: $15,000 /year
2
If only the $200,000 rebate is available and the 600 -kW system is installed, the cash
flow is slightly negative at $22,000 /year. However, the electrical savings should
increase over time as the City finds additional sources of waste that can be digested to
provide more biogas and electricity. Therefore, the net cash flow should improve within
a few years.
Full utilization of the capabilities of three microturbines at 600 -kW would offer the
following cash flow
Electrical Savings:
Annual Debt Service:
Annual Maintenance:
Boiler Cost Avoidance (debt service):
Net Cash Flow:
$334,500
($134,000)
($87,000)
$13,000
$126,500 /year
The following table was as presented to council in June 2010 which shows the impact of
plant improvements on the rate structure. These projections were made using the
production from the use of two microturbines at 400 -kW.
Impact of Plant Upgrade and
Operating Budget on Sanitary
Sewer Rates
FY
2011
FY
2012
FY
2013
FY
2014
FY
2015
FY
2016
Base Bid
11%
15%
15%
15%
15%
3%
Alternate 1B — Final Clarifiers
0%
0%
0%
0%
+1%
0%
Alternate 2 — HPO System
0%
0%
0%
0%
-1 %
0%
Alternate 6 — Septage Receiving
0%
0%
0%
+1%
+1 %
0%
Microturbine System
0%
0%
+1%
+2%
+1%
0%
Total Rate Increase of Plant
Upgrade
11%
15%
16%
18%
17%
3%
i
As an option, to constructing the cogeneration project now, the City could wait until the
end of the current project and then determine how much of the contingency is still
available to fund the cogeneration project. This is a viable alternative, but Council
should be aware that the 20% principle forgiveness funds may not still be available. In
addition, the plant would need to rely on only one boiler, which would not have a
backup. Should an emergency situation materialize at the plant that necessitates
bringing in a portable boiler, these costs would be in the "tens of thousands of dollars"
range per event.
Related to green house gas (GHG) impacts, the estimated GHG reduction resulting
from the conversion from incineration to anaerobic digestion at the W &RRC is about
830 tons /year of CO2 equivalent. The additional GHG reduction resulting from
3
1
cogeneration, which typically is calculated as electrical energy cost avoidance, is about
2,200 tons /year of CO2 equivalent. This is based on 400 kW of electrical generation,
operating 90% of the time, as well as a conversion of 1.37 Ibs CO2 equivalent per kWH.
Based on review of the study findings, I concur with Strand's findings. We also concur
that it is in the City's best interest to bid the cogeneration facilities project as a 400 kW
system (two 200 kW microturbines), with the third 200 kW microturbine (600 kW
system) as a bid alternative. This will provide some flexibility should the project bid
costs be higher than anticipated.
In order to secure the necessary funding prior to project initiate, Strand recommends
that this report, along with the forms included in the attached packet of information, be
submitted to the Iowa DNR to put the City in a position to be eligible for a low interest
loan funding.
ACTION REQUESTED
This memorandum requests City Council approval of the April 2011 Water & Resource
Recovery Center Cogeneration Facilities report submitted by Strand Associates, Inc.,
approval to submit the plan and required forms to the Iowa DNR for potential SRF
funding, and approval to complete the design services for bidding of the cogeneration in
the fall of 2011. As discussed in the introduction this submittal would not require the City
to borrow funds through the SRF, nor would the City be obligated to bid the project or
award a contract. However, submittal of this information is required if the City wishes to
be eligible for SRF low- interest borrowing and a potential 20% principle forgiveness for
the project.
If desired, Strand is agreeable to presenting its findings to the City Council at either a
work session or a future Council meeting.
Attachments
cc: Gus Psihoyos, City Engineer
Jenny Larson, Budget Director
Ken Tekippe, Finance Director
Steve Sampson Brown, Project Manager
4
STRAND
ASSOCIATES, INC.
E N G I N E E R S
910 West Wingra Drive
Madison, WI 53715
Phone: 608- 251 -4843
Fax: 608 - 251 -8655
Office Locations
Madison, WI
Joliet, IL
Louisville, KY
Lexington, KY
Mobile, AL
Columbus, IN
Columbus, OH
Indianapolis, IN
Milwaukee, WI
Cincinnati, OH
Phoenix, AZ
www,strand.com
April 22, 2011
Mr. Steve Sampson Brown, P.E.
City of Dubuque
50 West 13th Street
Dubuque, IA 52001
Re: Water Pollution Control Plant Cogeneration Facilities
Dear Steve,
Enclosed are five copies of the final Water Pollution Control Plant (WPCP)
Cogeneration Facilities report, which is being submitted to the Iowa Department of
Natural Resources to qualify this project for low interest loan funding.
Based on the recommendations of this report and the City's concurrence with the
direction of the project, we are proceeding with detailed design of the microturbine
cogeneration system at the Dubuque WPCP.
Please call with any questions.
Sincerely,
STRAND ASSOCIATES, INC,®
Randall A. Wirtz, 'Ph ./D,f, P.E.
Enclosure: Repor
R:\MAD \Documents'Reports \ Archive \201 I \Dubuque, IA\WPCP Cugen .Fac,1154.033.raw.jan \Rcpoll \Cogeneration Reporl.rev.4 -2I -I I.docx \4/22 /201 I
Report for
City of Dubuque, Iowa
Water Pollution Control Plant Cogeneration Facilities
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I hereby certify that this engineering document was
prepared by me or under my direct personal supervision
and that I am a duly licensed Professional Engineer under
the laws of the State of Iowa.
FOR STRAND ASSOCIATE . , INC.®
/ /� ZZ
Randall
Number 6E/,7 Date
My license renewal date ~is - ecember 31, 2011
Pages or sheets covered by this seal: Entire Study
Prepared by:
STRAND ASSOCIATES, INC.®
910 West Wingra Drive
Madison, WI 53715
www.strand,com
April 2011
STRAND
ASSOCIATES, INC.'
f; hl( NF.ERtl
TABLE OF CONTENTS
Page No.
or Following
WATER POLLUTION CONTROL PLANT COGENERATION FACILITIES
Introduction 1
Projected Biogas Production 1
Electrical Generation Alternatives 1
Generation Device Evaluation 2
Opinions of Cost 3
Recommendations 5
TABLES
Table 1 Biogas Production Estimates 1
Table 2 Microturbine Nonmonetary Considerations 2
Table 3 Engine Generator Nonmonetary Considerations 2
Table 4 Energy Balance for Microturbines and Engine Generators 3
Table 5 Total Present Worth Summary (20 Year) 5
FIGURE
Figure 1 Solids Processing Building 5
APPENDIX —TOTAL PRESENT WORTH
APPENDIX
i
City of Dubuque, Iowa Water Pollution Control Plant Cogeneration Facilities
INTRODUCTION
The City of Dubuque Water Pollution Control Plant (WPCP) incinerators will be decommissioned, and
new anaerobic digestion facilities will be constructed as part of the current 2010 WPCP Modifications
Project. The anaerobic digestion process at the WPCP will produce significant quantities of biogas that
can be used as a renewable fuel. Three common end uses for digester gas are in a microturbine
combined heat and power (CHP) system, an engine generator CHP system, and in a boiler system.
The 2010 WPCP project included a boiler to utilize the biogas. This report further evaluates the
microturbine and engine generator alternatives.
The majority of municipal wastewater treatment plants (WWTPs) that employ anaerobic digestion use
biogas to replace or supplement natural gas for the heating needs of the digestion process as well as
for space heating in buildings. However, this typically only uses a portion of the total biogas produced in
the digestion process. CHP systems utilize all, or nearly all, of the biogas on a year -round basis to
generate electricity. During cold months, waste heat from the generators is captured and used to heat
the digesters and other buildings. During warm months, some of the waste heat would not be utilized.
PROJECTED BIOGAS PRODUCTION
The microturbines and engine generator alternatives were sized based on current average and future
design (year 2030) biogas production estimates of 165,000 cubic feet per day (f3 /day) and
303,000 f3 /day, respectively. The estimated biogas production rates for the current average, future
design, and future design with food residuals are shown in Table 1.
ELECTRICAL GENERATION ALTERNATIVES
A. Microturbines
Microturbines are gas turbines that burn methane mixed with compressed air. The hot pressurized
gases that result from combustion are forced out of the combustion chamber and through the turbine
wheel, causing it to spin and turn the generator. Microturbines provide relatively clean combustion and
low exhaust emissions, particularly of nitrogen oxide (NOx) components. Microturbines require a fuel
with a lower heating value (LHV) >450 British Thermal Units /standard cubic feet (BTU /scf) and at
pressures between 75 and 80 pounds per square inch (psi).
B. Engine Generators
Reciprocating gas engine generators for anaerobic digester gas are essentially natural gas engines that
have been modified to handle larger volumes of fuel because of the greater percentage of carbon
dioxide (CO2) in digester gas, and to accept higher levels of contaminants. A reciprocating, or internal
combustion (IC), engine converts the energy contained in a fuel to mechanical power. This mechanical
power is used to turn a shaft in the engine. A generator is attached to the IC engine to convert the
mechanical motion into power.
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Current Average
Gas Production (f3 /day) L 165,000
Future Design
Future Design With
Food Residuals
379,000
303,000
Table 1 Biogas Production Estimates
ELECTRICAL GENERATION ALTERNATIVES
A. Microturbines
Microturbines are gas turbines that burn methane mixed with compressed air. The hot pressurized
gases that result from combustion are forced out of the combustion chamber and through the turbine
wheel, causing it to spin and turn the generator. Microturbines provide relatively clean combustion and
low exhaust emissions, particularly of nitrogen oxide (NOx) components. Microturbines require a fuel
with a lower heating value (LHV) >450 British Thermal Units /standard cubic feet (BTU /scf) and at
pressures between 75 and 80 pounds per square inch (psi).
B. Engine Generators
Reciprocating gas engine generators for anaerobic digester gas are essentially natural gas engines that
have been modified to handle larger volumes of fuel because of the greater percentage of carbon
dioxide (CO2) in digester gas, and to accept higher levels of contaminants. A reciprocating, or internal
combustion (IC), engine converts the energy contained in a fuel to mechanical power. This mechanical
power is used to turn a shaft in the engine. A generator is attached to the IC engine to convert the
mechanical motion into power.
Prepared by Strand Associates, Inc. ' 1
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City of Dubuque, Iowa
GENERATION DEVICE EVALUATION
A. Microturbines
Water Pollution Control Plant Cogeneration Facilities
The microturbine analysis includes two initial 200 - kilowatt (kW) Capstone microturbines with a potential
build -out to 1,000 kW (5 units at 200 kW each). The turbines and heat recovery units would be installed
in the Structure 75 (Solids Processing Building) Cogeneration Room. The 2010 WPCP Modifications
Project will provide a biogas cleaning and conditioning system, which includes moisture removal,
hydrogen sulfide removal, and siloxane removal facilities installed at the Anaerobic Digestion
(Structure 70) complex. For the microturbine alternative, a gas compression skid would be installed in
Structure 70 (Digester Building) to meet fuel pressure requirements for the microturbines. A summary
of the nonmonetary considerations related to microturbines is shown in Table 2. An energy balance of
the 400 -kW microturbine system is shown in Table 4.
Positives
Modular capacity expansion (flexibility).
Potential build -out to 1,000 kW within current space.
Unison is located in Dubuque and offers maintenance
contract for microturbines.
Microturbines and heat recovery modules will fit in
Cogeneration Room.
Negatives
Few manufacturers.
Requires_gascompression (electrical load).
Table 2 Microturbine Nonmonetary Considerations
B. Engine Generators
Similar to the microturbines, engine generators would be installed in the Structure 75 Cogeneration
Room. Engine generators do not require gas cleaning or conditioning in addition to that provided in the
WPCP Modifications Project. Therefore, the gas compression skid is not required. Initially, one engine
generator would be installed. The space available will accommodate two engine generators. The
engine requires an after - cooler radiator and engine jacket water radiator located outside for cooling.
Two gas engine generator options that operate at different speeds were evaluated. The Caterpillar
G3508 gas engine is a low speed, 1,200 revolutions per minute (rpm), heavy -duty engine. The
Caterpillar G3412 gas engine is a 1,800 rpm, normal -duty engine. The heavy -duty engine and
normal -duty engine have an electrical output rating of 390 kW and 450 kW, respectively. The
nonmonetary evaluation of these engine generators is summarized in Table 3. The engine generator
energy balance is shown in Table 4.
Positives
Negatives
Competitive suppliers
Cater•illar, Jenbacher, Waukesha, and others).
Remote - mounted after - cooler radiator and engine -water
radiator located outside; difficult to site at the WPCP.
Install one unit now at 390 or 450 kW
with potential build -out to two units.
Requires two 500- gallon oil storage tanks for fresh and
waste oil in the basement.
Robust and proven technology.
Greater overall efficiency than microturbines.
Space is very limited for generators and removal of
equipment would be difficult.
Table 3 Engine Generator Nonmonetary Considerations
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City of Dubuque, Iowa
Water Pollution Control Plant Cogeneration Facilities
C. Performance Evaluation
Table 4 compares the energy balances for the microturbines and engine generators at the current
average gas production. The energy input available to each device, based on the estimated current
average gas production rate and a 600 BTU /scf lower heating value, is 4,120 thousand British thermal
units per hour (MBH). The engine generators have greater heat recovery than the microturbines
because of heat recovery from the engine jacket water and exhaust, while the microturbines can only
provide heat recovery from the exhaust. The heating demand of 1,320 MBH includes biosolids heating
for the anaerobic digestion process as well as the heating load for Structures 70 and 75 during the
winter. If heat recovery were not employed, the heating demand would need to be provided through
burning of natural gas. During winter operations, the monthly value of natural gas would be
approximately $10,000 per month at a value of $1.00 per therm. The annual natural gas cost would be
approximately $90,000 without heat recovery on the cogeneration system. Since all of the
cogeneration devices provide adequate heat recovery for the anticipated heating loads, the anticipated
natural gas usage is zero under nearly all conditions. The electrical output is greater for the normal duty
engine because of the higher electrical efficiency and higher rated output.
OPINIONS OF COST
A. Microturbines
The installed opinion of capital cost for a 400 kW microturbine system is approximately $823,000.
Additionally, the gas compression skid system has an opinion of capital cost of approximately $265,000
installed. The opinion of annual operation and maintenance (O &M) cost is approximately $87,000 and
includes routine maintenance (9 -year factory protection plan), overhauls, and the compression skid
electrical use. The gas cleaning costs for sulfur, siloxanes, and moisture removal were not included in
this annual O &M cost because the cost will be equal for the three generator alternatives.
Annual O &M costs for the microturbine system assume that a Tong -term maintenance contract is
entered into with an authorized Capstone service provider. Preliminary proposals for a maintenance
contract were obtained and included in the annual O &M costs. The maintenance contract includes
routine maintenance as well as major equipment overhauls approximately every 5 years or
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i Heavy -Duty Engine
Generator
(390 kW)
Normal -Duty Engine
Generator
(450 kW)
Microturbines
(Two 200 kW)
Electrical Generation Potential (kW)
390
422
398
Gas Production Energy Available (MBH)
4,120
4,120
4,120
Heat Recovery (MBH)
1,770
1,980
1,650
Average Heating Demand (MBH)
1,320
1,320
1,320
Adequate Heat Recovery
Yes
Yes
Yes
Electrical Efficiency
33%
35%
33%
Thermal Efficiency
44%
48%
40%
Table 4 Energy Balance for Microturbines and Engine Generators
C. Performance Evaluation
Table 4 compares the energy balances for the microturbines and engine generators at the current
average gas production. The energy input available to each device, based on the estimated current
average gas production rate and a 600 BTU /scf lower heating value, is 4,120 thousand British thermal
units per hour (MBH). The engine generators have greater heat recovery than the microturbines
because of heat recovery from the engine jacket water and exhaust, while the microturbines can only
provide heat recovery from the exhaust. The heating demand of 1,320 MBH includes biosolids heating
for the anaerobic digestion process as well as the heating load for Structures 70 and 75 during the
winter. If heat recovery were not employed, the heating demand would need to be provided through
burning of natural gas. During winter operations, the monthly value of natural gas would be
approximately $10,000 per month at a value of $1.00 per therm. The annual natural gas cost would be
approximately $90,000 without heat recovery on the cogeneration system. Since all of the
cogeneration devices provide adequate heat recovery for the anticipated heating loads, the anticipated
natural gas usage is zero under nearly all conditions. The electrical output is greater for the normal duty
engine because of the higher electrical efficiency and higher rated output.
OPINIONS OF COST
A. Microturbines
The installed opinion of capital cost for a 400 kW microturbine system is approximately $823,000.
Additionally, the gas compression skid system has an opinion of capital cost of approximately $265,000
installed. The opinion of annual operation and maintenance (O &M) cost is approximately $87,000 and
includes routine maintenance (9 -year factory protection plan), overhauls, and the compression skid
electrical use. The gas cleaning costs for sulfur, siloxanes, and moisture removal were not included in
this annual O &M cost because the cost will be equal for the three generator alternatives.
Annual O &M costs for the microturbine system assume that a Tong -term maintenance contract is
entered into with an authorized Capstone service provider. Preliminary proposals for a maintenance
contract were obtained and included in the annual O &M costs. The maintenance contract includes
routine maintenance as well as major equipment overhauls approximately every 5 years or
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City of Dubuque, Iowa Water Pollution Control Plant Cogeneration Facilities
40,000 hours. The present worth costs for the microturbine alternative includes these future major
overhauls over the 20 -year design life of the facilities. Microturbines have a nominal life expectancy of
approximately 10 years. However, the maintenance contract approach essentially provides new
equipment as the microturbines reach the end of their useful life.
To sell electricity to the local power utility in the future, electrical paralleling switchgear will be required.
The switchgear is not required to operate the microturbines for plant electrical use and, therefore, was
not included in the project cost opinion. For future grid connection, space for this gear is available in the
Cogeneration Room or below this room in the basement.
B, Engine Generators
The opinion of installed costs for the heavy -duty and normal -duty Caterpillar engines are $1,119,000
and $844,000, respectively. Annual O &M costs for the heavy -duty engine and normal -duty engine
system alternatives are estimated to be $81,000 and $123,000, respectively, based on information
provided by the manufacturer and local representative. The normal -duty engine has a greater O &M
cost than the heavy -duty engine because it operates at higher speeds, which requires more frequent
overhauls and routine maintenance. As with the microturbines, the gas cleaning and conditioning costs
were not included in the O &M costs.
The engine generators require a paralleling switchgear for plant electrical use, which adds
approximately $204,000 to the opinion of capital cost. This switchgear for the engine generator could
also allow for a future connection to the electrical grid.
Annual O &M costs for the engine generator alternatives are based on "$ per kilowatt hour (kWh)" level
costs provided by equipment suppliers. These O &M costs are $0.025 /kWh for the heavy -duty engine
and $0.035 /kWh for the normal -duty engine. These annual costs include routine maintenance as well
as engine overhauls approximately every 5 to 7 years and are included in the 20 -year present worth
costs for these alternatives. With proper maintenance and overhauls, the engine generators have a life
expectancy of 15 to 20 years or more, especially the heavy -duty generators. We have assumed the
generators would not need to be replaced within the 20 -year design life for these facilities.
C. Total Present Worth
The 20 -year total present worth (TPW) analysis for the evaluated devices is included in the Appendix
and summarized in Table 5. The engine generators have greater structural, mechanical, and electrical
costs than the microturbines because of the remote - mounted heat exchangers, paralleling switchgear,
switchgear control room, and engine cooling water piping. The heating, ventilating, and air
conditioning (HVAC) costs are greater for the microturbines because these require supply fans and
ductwork to provide the cooling and combustion air.
The electrical savings for each device is based on $0.07 kWh and the estimated current average gas
production rate. This is expected to be a conservative estimate of electrical savings since biogas
production is expected to increase throughout the life of the facilities. In addition, the cost of electricity
may increase at a faster rate than the overall inflation rate accounted for in the total present worth
analysis, which employs an effective discount rate of 4.375 percent. If the cost of electricity increases at
a rate faster than inflation, the electrical savings would be higher.
Prepared by Strand Associates, Inc.® 4
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City of Dubuque, Iowa
Water Pollution Control Plant Cogeneration Facilities
Each alternative is expected to operate 8,000 hours a year to account for maintenance downtime.
Based on this analysis, the microturbine alternative has the lowest TPW and the normal -duty engine
generator has the second lowest TPW, though these values are considered approximately equal at this
stage of planning.
Total Project Cost
Annual O &M
Annual Electrical Savings
Total Present Worth (20 year)
Heavy Duty
Engine Generator
,(390 kW)
$2,387,000
$81,000
($218,000)
$585,000
Normal Duty
Engine Generator
X450 kW)
$1,745,000
$123,000
($236,000)
$259,000
1 See attached TPW of each alternative (Appendix) for details
Table 5 Total Present Worth Summary (20 Year)
Microturbines
J400 kW)
$1,921,000
$87,000
($223,000)
$197,000
RECOMMENDATIONS
A. Generation Device
Based on the evaluations of the microturbines and engine generators, microturbines are recommended
for digester gas utilization at the Dubuque WPCP. The microturbines and normal -duty gas engine have
similar opinions of total present worth. However, space constraints and system layout within the Solids
Processing Building favor microturbines over engine generators. In addition, service for the
microturbines is anticipated to be provided from a local service firm, which should improve service
response for future equipment issues and decrease downtime.
B. Preliminary Design
Figure 1 presents a preliminary layout for the microturbines in the Solids Processing Building
(Structure 75) Cogeneration Room. The microturbine room is required by code to have a 2 -hour
fire -rated wall to separate this space from the rest of the building. A stud wall inside the Cogeneration
Room will separate the microturbine air intake on the south side of the room from the heat exchanger
side. Combustion and cooling intake air will be ducted down from the existing louvers at the top of the
structure to the intake space. On the heat exchanger side, an exhaust fan will control the room
temperature. The microturbines will be accessible with a manufacturer - provided cart, which allows for
removal of microturbines during servicing or overhauls.
Additional 200 kW microturbines and heat exchangers can be added as gas production increases. At
the estimated gas production rate for future design with food residuals, the microturbines could
generate approximately 930 kW, which matches the build -out space of five 200 kW units,
Prepared by Strand Associates, Inc.® 5
R:WIAD1 Documents \Reports\Archlve\2011 \Dubuque, IA \WPCP Cogen.Fac.1154.033.raw.jan \Report \Cogeneration Report.rev.4- 21- 11.docx \4/22/2011
City of Dubuque, Iowa Water Pollution Control Plant Cogeneration Facilities
C. Recommended Alternative Considerations
The following alternatives are provided for the City's consideration.
1. With respect to the microturbine system, there is a relatively significant cost incentive to
install 600 kW of generation capacity (three 200 kW units) rather than 400 kW of
generation capacity (two 200 kW units). The total opinion of capital cost of the 400 kW
system is approximately $1,921,000, or $4,800 /kW. In comparison, the total opinion of
capital cost for the 600 kW system is approximately $2,149,000, or $3,600 /kW. The
addition of the third 200 kW microturbine adds approximately $228,000 to the capital
costs, or $1,140/kW of added capacity. The 600 kW system would not have significant
additional structural, mechanical, electrical, or HVAC costs compared to the 400 kW
because the Cogeneration Room and piping would largely be the same except for an
additional hot water pump, piping, and electrical work for the third heat exchanger. In
addition, having a third microturbine will reduce the overall maintenance downtime on
the cogeneration system, since a standby unit can be brought online when another unit
is down for maintenance. We recommend requesting a Bid Alternative in the Bidding
Documents to include a third 200 kW microturbine.
2. Locating the microturbines and heat recovery modules outdoors would reduce structural
and HVAC costs of the project. However, this alternative would provide a less ideal
location for maintenance and servicing.
3. Rather than a 2 -hour fire -rated wall constructed at full height to the roof, a 2 -hour
fire -rated structural ceiling over the Cogeneration Room could be considered. This
option would provide additional usable space above the Cogeneration Room. To support
the ceiling, structural columns may be required. These may have service clearance and
layout conflicts, and this option would increase the cost of the project.
4. Even though it is not required by code, the City may elect to install a fire suppression
system in the Cogeneration Room to protect the high -cost equipment.
Prepared by Strand Associates, Inc.' 6
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APPENDIX
TOTAL PRESENT WORTH
City of Dubuque WPCP
Heavy -Duty Caterpillar Engine
Discount Rate 4.375%
20 year TPW
ITEM Initial Capital Future Capital Service Replacement 20 yr Salvage Salvage Value
Cost Cost Life Cost (P.W.) Value (P.W.)
Heavy Duty Engine 1,119,000 1,119,000 20
Oil Storage Tanks 14,000 14,000 20
Paralleling Switchgear 204,000 204,000 20
Subtotal $ 1,337,000
Structural 122,000
Mechanical 160,000 20
Electrical 200,000 20
HVAC 68,000 20
Subtotal $ 1,887,000
Contractors General
Conditions @ 10% 189,000
Construction Costs 2,076,000
Contingencies @ 15% 311,000
Total Capital Costs $ 2,387,000 $ $ $
Present Worth $ 2,387,000 $ $
Operation Costs (Annual)* 81,000
Electrical Savings (Annual)* (218,000)
Total $ (137,000)
Present Worth of O &M $ (1,802,000)
Summary of Present Worth Costs
Capital Cost 2,387,000
Replacement
O &M Cost (1,802,000)
Salvage Value -
TOTAL PRESENT WORTH $ 686,000
* Based on current annual average conditions
S;\ MAD \1100 -- 1199 \1154 \033 \Spr \Total Present Worth Analysis- DBQ.xisxA -1 ALT ENG1 390 kW
City of Dubuque WPCP
Normal -Duty Caterpillar Engine
Discount Rate 4,375%
20 year TPW
ITEM Initial Capital Future Capital Service Replacement 20 yr Salvage Salvage Value
Cost Cost Life Cost (P.W.) Value (P.W.)
Normal Duty Engine 611,000 611,000 20
Oil Storage Tanks 14,000 14,000 20
Paralleling Switch Gear 204,000 204,000 20
Subtotal $ 829,000
Structural 122,000
Mechanical 160,000 20
Electrical 200,000 20
HVAC 68,000 20
Subtotal $ 1,379,000
Contractors General
Conditions @ 10% 138,000
Construction Costs 1,517,000
Contingencies @ 15% 228,000
Total Capital Costs $ 1,745,000 $ - $ $
Present Worth $ 1,745,000 $ $
Operation Costs (Annual)* 123,000
Electrical Savings (Annual)* (236,000)
Total $ (113,000)
Present Worth of O &M $ (1,486,000)
Summary of Present Worth Costs
Capital Cost 1,745,000
Replacement
O &M Cost (1,486,000)
Salvage Value -
TOTAL PRESENT WORTH $ 259,000
* Based on current annual average conditions
S;\ MAD \1100 -- 1199 \1154 \033 \Spr \Total Present Worth Analysis- DBQ.xlsxA -2 ALT ENG2 450 kW
City of Dubuque WPCP
Capstone Microturbines
Discount Rate 4.375%
20 year TPW
ITEM Initial Capital Future Capital Service Replacement 20 yr Salvage Salvage Value
Cost Cost Life Cost (P.W.) Value (P.W.)
Microturbines 823,000 823,000 20
Compression Skid 265,000 265,000 15 139,000 177,000 75,000
Subtotal $ 1,088,000
Structural 72,000 20 -
Mechanical 100,000 20
Electrical 160,000 20
HVAC 98,000 20
Subtotal $ 1,518,000
Contractors General
Conditions @ 10% 152,000
Construction Costs 1,670,000
Contingencies @ 15% 251,000
Total Capital Costs $ 1,921,000 $ 139,000 $ 177,000 $ 75,000
Present Worth $ 1,921,000 $ 139,000 $ 75,000
Operation Costs (Annual)* 87,000
Electrical Savings (Annual)* (223,000)
Total $ (136,000)
Present Worth of O &M $ (1,788,000)
Summary of Present Worth Costs
Capital Cost 1,921,000
Replacement 139,000
O &M Cost (1,788,000)
Salvage Value (75,000)
TOTAL PRESENT WORTH $ 197,000
* Based on current annual average conditions
5;\ MAD \1100 -- 1199 \1154 \033 \Spr \Total Present Worth Analysis - DBQ.xlsxA -3 ALT MT 400 kW