how to prepare a successful wte project - danmark i...

How to prepare a Successful WTE Project

Visit from Poland to Denmark 24 September 2014 Nils Christian Holm Director Ramboll Waste to Energy

WTE PROJECTS - COMPLICATED BUT REWARDING

• Waste is complicated resource – and residual waste is a technically complicated fuel

• Complicated legal framework – WTE covers both energy and waste sectors

• Many stakeholders – many interests – significant economy

• Often political / ideological

• Many misconceptions about WTE

• Organization of the sector/project a complicated theme

• Many sellers of “new fantastic alternative technologies”

=> But once established WTE is a good solution

AGENDA HOW TO PREPARE A SUCCESSFUL WTE PROJECT?

Important themes on most WTE projects

• WTE planning process

• WTE vs. other solutions

• Institutional solution

• WTE Technical solution

• Procurement approach

• How to build public support

• How much does it cost

=> But first a bit about RAMBOLL

RAMBOLL ENERGY - WTE

- PART OF THE RAMBOLL GROUP

RAMBOLL IN BRIEF

• Ramboll is a leading

engineering, design and

consultancy company founded

in Denmark in 1945

• We employ close to 10,000

experts across 19 countries

and over 200 offices.

• Ramboll is the Nordic region’s

leading consultancy and

Europe’s fourth largest

consultancy with a significant

presence in India and the

Middle East

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ENGINEERING, DESIGN AND CONSULTANCY

• Ramboll works across six

Markets:

• Buildings

• Transport

• Energy

• Environment

• Oil & Gas

• Management Consulting

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February 2011

Ramboll WTE

RAMBOLL GROUP IN THE NORTH EUROPEAN REGION AND THE UK

Ramboll Group operate in a broad international context from 200 permanent offices across the globe.

.

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INTERNATIONAL PRESENCE

COUNTRY HEAD OFFICES 01 BELGIUM, Brussels

02 CHINA, Beijing

03 CYPRUS, Episkopi

04 DENMARK, Copenhagen

05 ESTONIA, Tallinn

06 FINLAND, Helsinki

07 GERMANY, Hamburg

08 GREENLAND, Nuuk

09 INDIA, Hyderabad

10 KINGDOM OF SAUDI ARABIA, Riyadh

11 NORWAY, Oslo

12 POLAND, Warsaw

13 QATAR, Doha

14 ROMANIA, Bucharest

15 RUSSIA, Moscow

16 SINGAPORE, Singapore

17 SOUTH AFRICA, Pretoria

18 SWEDEN, Stockholm

19 SWITZERLAND, Zurich

20 UAE, Dubai

21 UK, London

22 USA, New York

13 22 08 21 19 17 14 03 20 09

01 07 18 04 11 06 05

10

16 02 12 15

TOP 10 INTERNATIONAL DESIGN FIRMS BY REGION (EUROPE)

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TOP 10 INTERNATIONAL DESIGN FIRMS BY REGION (EUROPE) Ranking: revenue

Rank 2012 2011 1. 1. Fugro 2. 2. Jacobs 3. 3. Grontmij 4. 4. Ramboll Group 5. 6. Fluor Corp. 6. ** URS Corp. 7. 5. Aecom Technology 8. ** CH2M Hill 9. 7. Pöyry Group 10. 8. Arcadis Group

Source: Engineering News-Record (ENR). Companies are ranked according to total revenue for design services performed outside their home country during the previous year in $ millions. http://enr.com ** Firms not ranked last year

http://enr.com/

http://enr.com/

WASTE-TO-ENERGY

Ramboll WTE

• World-leading waste-to-energy

consultancy

• 35 ongoing waste-to-energy

projects

• >130 major waste-to-energy

projects completed

• Waste-to-energy projects in 29

countries

• In-depth knowledge of processes,

technologies and suppliers

• Dedicated experts and project

managers

Ramboll WTE

WASTE-TO-ENERGY EXPERTS

• 60 dedicated experts covering project management and all relevant

technical fields within M&E for waste-to-energy plants, including:

• Furnace/boiler

• Turbine/generator

• Flue gas cleaning

• Water treatment

• Electrical systems

• Control and monitoring systems

• Layout

• Also cover commercial issues such as procurement planning, risk analysis

and project structuring

Ramboll WTE

RAMBOLL WASTE-TO-ENERGY - from idea to reality

• New green-field facilities, addition of extra treatment capacity to existing

facilities or modification/addition of new equipment to existing facilities

• Traditionally structured projects as well as PPP schemes:

• Technical, environmental and financial analysis

• Conceptual design and layout

• Procurement planning and project structuring

• Management of the procurement process

• Preparation of tender documents,

bid evaluation and contract negotiations

• Owners Engineer / EPCM: Contract management, lot

design supervision, lot coordination, works supervision

and commissioning

• O&M support

WASTE-TO-ENERGY PLANT REFERENCES

HOW TO PREPARE A SUCCESSFUL PROJECT? - PROJECT DEVELOPMENT PROCESS

Important steps everytime

WTE PLANNING PROCESS THE DILEMMA – FOR EVERY PHASE

Ramboll WTE

=> Involve people with WTE experience!

1ST THEME: WTE VS OTHER SOLUTIONS

• Technology assessments – requires a multi-criteria analysis

• Proven technology!

• Robust (towards variations in waste)!

• Carbon footprint

• Environmental impact / LCA

• Economics – total cost of WM (including collection)

• Grate fired WTE is strong solution anywhere – and this is generally

what is being established.

• With good CHP - grate fired WTE is an even stronger solution –

environmentally and economically

• Often the main issue is misconceptions about grate fired WTE

• …and the world of waste is full of technology sellers with many

big promises….

=> So be very careful when choosing approach/technlology

Ramboll WTE

17 WHY EFW IN DENMARK?

• Landfill ban

• Proven and robust technology (grate fired facilities)

• Contribution to energy self-sufficiency

• Carbon footprint

• Always heat export. DH network determines size of plant.

• Very high energy efficiency

• Economically the best solution

18 ENERGY RECOVERY FROM WASTE

1 tonne of waste

2 MWh heat 2/3 MWh electricity

19 EXAMPLE: ENERGY FROM EFW IN DENMARK

3.5 million tonnes of waste incinerated

Electricity 1.5 million MWh

430,000 households

17% of all households

Heat 6.5 million MWh

360,000 households

14% of all households

20 DISTRICT HEATING IN COPENHAGEN

2ND THEME: INSTITUTIONAL SOLUTION

• What degree of private involvement?

• Design

• Build/construction

• Own

• Finance

• Operate

• Scandinavia: DB, (DBFOO)

• Germany: DB, DBO, DBFOO

• France: DB, DBO

• UK: DBFOO, (DBO) – supported by government grants (PFI)

• Poland: DB, DBFOO

• US: DBO

22 DBFOO (”PPP”) PROS AND CONS

• Pros

• Lower risk to the authority (but not ”no” risk)

• Public financing may not be possible

• Potentially more ”lean”

• Economy of scale through shared functions

• Cons

• Cost of funding is high

• Very complex contracts – very inflexible

• Transaction costs are high

• Off balance sheet?

• Value for Money?

=> Careful consideration is required

23 WTE ORGANISATION IN DENMARK

• Generally public inter-municipal companies

• Not-for-profit organisations

• Municipalities guarantee loans => very cheap financing

• Process plant procured competitively => good prices

• Projects are completed on time and on budget

• Availability is fine – 8000 hours

• Staffing levels are OK

• Operational cost are normal

• No municipal step-in has ever been required

=> Tipping fees are the lowest in Europe

Ramboll WTE

OSLO, NORWAY Inter-municipal company: Public ownership, finance and operation

• New waste-to-energy facility

• 160,000 tpa

• Consultant on M&E on all phases and aspects: From project planning to commissioning

• M&E in three DB lots

• Furnace/boiler + FGC: Von Roll

• Taken over end 2011

Contractors proposed design

HERTFORDSHIRE, UK 25 year DBFOO (PPP/PFI) residual waste treatment contract

• 270,000 tpa WTE facility.

• Technical advisor for HCC on the procurement of the contract.

• District Heating ready

• Contract signed: 2011

• Commissioning: 2014

Ramboll WTE

LINCOLNSHIRE, UK 20-year DBO contract

• 150,000 tpa green-field waste-to-energy facility.

• Technical advisor/owners engineer for LCC on: OBC, planning design, procurement, construction, commissioning and operation.

• Contract signed 2011

• FCC with CNIM


3RD THEME: WTE TECHNICAL SOLUTION

A number of important design choices needs to be made on every

project, i.a.

• Size of and number of unit(s)

• Size of bunker

• Type of boiler and steam parameters

• Type of flue gas cleaning

• Flue gas condensation

• Heat pumps

• NOx removal

• IBA

Driver of economy and environmental performance

=> Must be carefully optimized - everytime

Ramboll WTE

SYSAV, MALMÖ, SWEDEN

• Two new units and retrofit of two existing units

• 2 x 210,000 tpa + 2 x 96,000 tpa

• 4 M&E lots

• Detailed design of civil works

• Supplier: Martin/LAB/MAN


• Commissioning: 2008 + 2003

• Ramboll services: Owners engineer - from project analysis and planning to commissioning

AMAGER RESSOURCECENTER COPENHAGEN, DENMARK

• Green-field WtE facility, close to the city centre

• Capacity: 2 x 240,000 tpa

• Energy output: 400,000 MWh electricity and 1,000,000 MWh heat per year


• Very low environmental impact

• Ramboll services: Owners Engineer from project analysis and planning to commissioning

• M&E procurement completed


4TH THEME: WTE PLANT PROCUREMENT APPROACH

Owner/operator must decide how to procure the facility

• EPC: Engineering-Procurement-Construction (Turnkey)

• Owners Engineer

• EPCM: Engineering-Procurement-Construction-Management

• Few Lots: 2-5 M&E Lots + Civil Lots

• Many Lots: 20-50 M&E Lots + Civil Lots

• EPCM contractor/advisor

• Pros and Cons in terms of costs, risk and influence over design

and quality

=> Important decision for the owner/operator

Ramboll WTE

TAQA, ABU DHABI, UAE

• Green-field WtE facility

• 1 million tpa – turnkey contract

• Ramboll services to TAQA

• Owners Engineer

• Conceptual design

• PQ, Tender, Contracting

VAASA, FINLAND • Green-field waste-to-energy

facility

• 160,000 tpa

• From project analysis and

planning to commissioning

• 3 M&E lots + civil works


FORTUM, STOCKHOLM, SWEDEN

• Brown-field waste-to-energy facility

• 240,000 tpa

• 18 M&E lots and civil works


• Ramboll services: EPCM contractor

• Client: Fortum

LUCERNE WTE • New green field 200,000 tpa WtE plant

• CHP: The plant will produce electricity

as well heat - as mainly for paper

production.

• One of only two ongoing new-build

projects in Switzerland.

• Ramboll services: EPCM – general

engineer


5TH THEME: HOW TO BUILD SUPPORT FOR WTE? MANY STAKEHOLDERS !

Waste-to-Energy

Plant

Authorities

Local/Provincial Govt.

Urban/Regional planning

Environmental authorities

Health authorities

Traffic authorities

Waste sector

Waste generators

Waste recycling companies

Waste collection companies

Other treatment plants

Landfill operators

Community

Environmental NGOs

Nature/wildlife NGOs

Community groups

Neighbouring citizens

Scavengers

Energy sector

Power producers

Power distribution company

Industries selling heat/power

District heating company

Power/energy consumers

36

May 2008

5TH THEME: HOW TO BUILD SUPPORT FOR WTE?

Plan carefully

Consider all stakeholders

Select only the site after a careful screening

Be open – believe in your project – be offensive - not defensive

Involve local people/layman and let them talk

Low emissions

High energy efficiency – if possible

High quality

Create a landmark – nice architecture

Ramboll WTE

ISLE OF MAN • Green-field waste-to-energy

facility:70,000 tpa

• 25 year DBO contract

• Clients Representative - from

project analysis and planning to

project follow-up and supervision

of O&M

• Supplier: Babcock Borsig Power

/Seghers


Contractors proposed design

HERTFORDSHIRE, UK • A PFI residual waste treatment contract.

• DBO reference case: 270,000 tpa WTE facility.

• Technical advisor for HCC on the procurement of the contract.

• District Heating ready

• Contract signed: 2011


GLOUCESTERSHIRE, UK

• Green-field waste-to-energy facility

• 185,000 tonnes of waste annually

• Energy output: 85,000 MWh

electricity per year

• From management of procurement

process to commissioning


AMAGER RESSOURCECENTER COPENHAGEN, DENMARK

• Green-field WtE facility, close to the city centre

• 2 x 280,000 tonnes of waste annually

• Energy output: 400,000 MWh electricity and 1,000,000 MWh heat per year


• Ramboll services: From project analysis and planning to commissioning

• M&E procurement completed


KARA/NOVEREN, ROSKILDE, DENMARK

• New 200,000 tpa waste-to-energy CHP unit

• Brown-field site

• EPCM/Owners Engineer from project analysis and planning to commissioning and take-over on M&E plant

• Three M&E lots. Contracts April 2011

• Suppliers: Martin/LAB /MAN


UDDEVALLA, SWEDEN • Green-field waste-to-energy facility

• 88,000 tpa

• M&E in three lots

• Supplier: Fisia Babcock Env./Fisia Babcock Env.

• Commissioning: 2008 Status: In operation/final phase of commissioning

• Ramboll services: Owners engineer - from project analysis and planning to commissioning

Ramboll WTE

TAS, DENMARK • New waste-to-energy facility

• 80,000 tpa

• M&E in 3 DB lots

• Supplier: BWV/Simatek


• Consultant on M&E and civil works on all phases and aspects: From project planning to commissioning

Ramboll WTE

West Palm Beach, Florida, USA

• 1 million tpa turnkey contract

• Greenfield project

• Ramboll services: Strategic Engineering advisor on the owners engineer team

• Commissioning 2014-2015

6TH THEME: HOW MUCH DOES IT COST?

It depends!

• Key drivers of tipping fee

• CAPEX: • Size

• Technology

• Particular civil cost

• Options for cheap local sourcing of equipment/supplies

• OPEX • Technology

• Unit costs

• Sale of energy – heat and power – production, market and price

• Funding cost – 3% OR 9% WACC?

• Denmark: 20(-50) EUR/ton

• UK: 60-120 EUR/ton

• Sri Lanka - ~0 EUR/ton

46 SOURCES OF ENERGY REVENUE IN DENMARK

1 tonnes of waste

2 MWh heat 2/3 MWh power

47 THE IMPACT OF ENERGY SALES ON THE GATE FEE - EXAMPLE

0

20

40

60

80

100

120

140

No energy

production

Production of

power only

CHP production

$/t

onne e

xcl. t

axes 2/3 MWh/t x 50 $/MWh

2 MWh/t x 30 $/MWh

LESSONS LEARNED

When preparing the greenfield investment for new WtE plants:

• Go through all the planning steps

• Choose a design based on state-of-the-art, proven technology:

grate furnace

• If possible use / sell all the energy (district heating, industry, cooling,

desalination etc.)

• Go for a substantial scale of operation (capital cost, operating cost

structure, higher energy efficiency)

• Think carefully about building public support

• Consider the institutional structure early on.

Ramboll WTE

VISIT OUR WEBSITE: WWW.RAMBOLL.COM/DK

THANK YOU FOR YOUR ATTENTION!

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