lisa lee morgan, aia, leed-ap president + ceo calor energy
Post on 15-Jan-2016
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Financial AchievabilityOf
Anaerobic Digestion Projects
Lisa Lee Morgan, AIA, LEED-AP President + CEOCalor Energy
The AD Process – “Basic” Feedstocks Digestion Outputs
CO2
CH4
Liquids
Solids
Gaso o o o o o o o o o o o o o o o o o o o o
o o o o o o o o o o o o o o o o o o o o o
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Digestate- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Key Revenues + Costs Feedstocks Digestion Outputs
CO2
CH4
Liquids
Solids
Gaso o o o o o o o o o o o o o o o o o o o o
o o o o o o o o o o o o o o o o o o o o o
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Digestate- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
$ Disposal $ $ Land $
$ Technology $ $ Offtake $
First Cut Rule of Thumb
Rule of $140
Revenue of$ / Ton of Waste
Revenue of$ / Megawatt-hr
Revenue of$ / Ton Fertilizer
$140
Feedstock $$$
Feedstocks
L T Contract with Organic Waste Producer
Payment from Waste Producer
Savings by Waste Producer
Community Viability
Charlotte San Francisco
Feedstocks BTU Spectrum
Food Waste Ag Waste Animal Waste WW Waste
BTU ContentLOW HIGH
Raw, unprocessed, undigestedProcessed, digested, excreted
Feedstocks Disposal FeesEntity Type Feedstock Disposal
Costs/TEnergy Needs
Dairy/Hay Farm Dairy Waste, Crop Waste, Manure
$30-40 On site power;Truck fuel
Municipal Household food waste; household garbage
$26-50 Utility PPA
Animal Processing Animal FOG, parts, fluids $60-75 On site power;Hot water
Waste Water Treatment
Biosolids 2% $30-50 Bio-Dryer;On site power
Food Processing Pre-consumer food waste
$45-60 On site power;Hot water
Feedstocks Project Models
PURISTS : Harvest Power – Investor-owned AD Facilities
MIXED BAGGERS : Columbia Biogas – Community-owned AD Facilities
Designed to maximize gas quality and financial yield Pre-consumer food waste only No contaminants, paper, body wastes Formula: 2/3 hi-cal food waste + 1/3 green waste Vancouver: $65/Ton + $150/MWh + $20/Ton = $235
Designed to maximize community participation Pre- and Post-consumer food waste Formula: 1/3 food + 1/3 FOG, beer, milk + 1/3 green, grocery Expensive pre- and post-treatment Portland: $55/WTon + $70/MWh + $20/Fton = $145
Heat Exchanger
Digestion Process - “Basic”
Fluids
Mixing Rods
Digestion Reactor
Biogas
Solids
Feedstock In
Pretreat to Pulp
Heated Pulp
Gas Storage
Digestate
Digestion $$$Digestion
Land Purchase or Option to Purchase
Reliable Technology + EPC Selection
Preliminary Engineering+ Financial Analysis
Tax Incentive CPA Opinion
Regulatory Approvals + Permits
Model Example
Tax EquityInvestor50% Cash100% Tax Incentives90% / 5% OwnerBal Sheet = Insurance
Developer5% OwnerProject ManagerTeam Lead
MunicipalWWTF5% / 95% OwnerElectricity userOperations
“NC Digester Group, LLC”
Lender50% Cash15 yr @ 5%secured
EPCEngineering/Procurement/Contractor
Utility: MWh
Heat: MMbtu
Fertilizer: Ton
Waste: Fees
Production ExampleFeedstock In:FOG in per hour 5.72tons/hr
Wet Biosolids in per hour 4.71tons/hrResidue for disposal 7.63tons/hr
Thermal Energy:AD-DRANCOs (2) Waste Heat 0.0MMBtu/hr
Gensets (2) Waste Heat 25.0MMBtu/hr
Total Waste Heat 25.0MMBtu/hr
Dryer operation 17.7MMBtu/hr
Heat losses 1.0MMBtu/hr
Excess thermal energy 6.3MMBtu/hr
Electric Energy:
Energy input to each Genset 42.1MMBtu/hr
Heat Rate of Gensets 8,530Btu/kWh
Number of Gensets 1Gens
kWh operation - gross 4,932kWh
kWh Belt dryer 575KWh
kWh operation - net 4,357kWh
MWh produced - net 4.357MWh
WWTF Baseload 1.357MWh
Excess power to grid 2.0MWh
Alternative Energy:
Compressed NG Potential 9000GGE/day
Tax IncentivesProject Cost Basis 12,350,000Federal Tax Credit 1,235,000NC Tax Credit Yr. 1 864,500MACRS Dep'n Yr 1 After Tax Value 821,275
(a) 2,920,775Year 1 Capital Outlay to 2015 Tax Incentives Return 24%
Year 2-6 Tax IncentivesNC Tax Credit Yrs 2-5 3,458,000Tax Dep'n Yrs 2-6 After Tax Value 3,285,100
6,743,100
Total Return Years 1-6 Σ(a) 9,663,875Capitay Outlay to 2015 Tax Incentives Return 78%
Output $$$Outputs
Gas>Electricity: Utility or On Site PPA
Gas>CNG: Utility or Local Transport PPA
RECs or RINs Contract
Fertilizer/CompostContract
Outputs 101
Biogas -> Electricity/CHP
Gas Clean Up
BiogasStorage
Digester
Electric Generator
PowerGrid
Gas Fueled
750-1000
BTU/FT3Boiler
Gas Fueled Industrial
Steam Users
Outputs 201
Biogas -> Transportation Fuels
Gas Clean Up
BiogasStorage
Digester
Natural GasPipeline
900-1000
BTU/FT3
BottledCompressed
NG (RNG)
Compressor
CNG Vehicles
Outputs 301
Digestate -> Fertilizers
Nutrient-Rich Liquid Fertilizer
Liquids
Compost Rows
Highly Enriched Organic Fertilizer
SolidDewaterDigester Digestate
Storage- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Annual Cash FlowINCOMEDisposal Fees for FOG 50,000 Tons/yr $ 60.00 $ 3,000,000 Disposal Fees for Biosolids 41,245 Tons/yr $ 10.00 $ 412,450 Heat to Dryer 155,052 MMBtu/yr $ 3.50 $ 542,682 Electricity to WWT User 11887.32 MWh/yr $ 70.00 $ 832,112 Electricity to Utility - avoided cost 26280 MWh/yr $ 55.00 $ 1,445,400 Fertilizer/Compost 6683.88 Tons/yr 15 $ 100,258 Annual Income $ 6,332,903
EXPENSE15-year loan @ 5% 15 5% loan $ 6,175,000 $ 586,000 Operation - Maint contract 12 mon $ 150,000 $ 1,800,000 Waste collection, transport 12 mon $ 150,000 $ 1,800,000 Insurance LS $ 500,000 Taxes 0.006 rate $ 6,175,000 37,050
$ 4,723,050
PROFIT $ 1,609,853 RETURN - ANNUAL 13%
Investor/Lender Expectations Feedstocks Digestion Outputs
L T Contract with Organic Waste Producer
Land Purchase or Option to Purchase
Gas>Electricity: Utility or On Site PPA
Payment from Waste Producer
Reliable Technology + EPC Selection
Gas>CNG: Utility or Local Transport PPA
Savings by Waste Producer
Preliminary Engineering+ Financial Analysis
RECs or RINs Contract
Tax Incentive CPA Opinion
Fertilizer/CompostContract
Regulatory Approvals + Permits
Community Analysis
Rule of $140 ?
Maximize what ?
Feedstocks?
Technology ?
Outputs ?
Questions?
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