mton/year

“ISWA 2005”
World Congress and Exhibition
Cost Standardization
for Methane Capture
Projects in Sanitary
Landfills
Gabriel Blanco, Estela Santalla
Facultad de Ingeniería
Universidad Nacional del Centro de la Provincia de
Buenos Aires
Targets
 Cost standardization for three alternatives of captured
biogas use:
 Combustion of biogas without energy use
 Thermal energy production for replacing packaging or natural gas
 Electric power production
 Estimate of economic indicators from standardized
costs
 Net Present Value
 Internal Rate of Return
 Sensitivity analysis according to:




Project scale (from 30,000 to 400,000 ton/year)
Electricity sale price (from 0.013 to 0.06 u$S/kWh)
Gas sale price (from 0.001 to 0.003 U$S/m3 NG)
CERs sale price (between 5 and 8 U$S/ton CO2e)
Considered costs
Construction site
Capture and
Extraction
Transport for
direct use
Transport and
treatment
Electric
generation
equipment
Design and
Engineering
Operation and
maintenance
Project cycle for
CDM
Standardized Costs of
Capital, Operation and
Maintenance
Determining standard costs in US$/(ton/year) from
costs of capital, operation and maintenance of:
 projects in Denmark, Poland, Uruguay,
Indonesia, Latvia and Argentina
 SL pre-feasibility studies in Colombia, Brazil,
Peru, Uruguay and Mexico
Comparison with standard costs of:
 U.S. EPA
 IPCC
Standard costs:
Torch combustion
std CC (U$S/ton)
30
25
20
15
10
5
0
0
200.000
400.000
600.000
ton/año
ton/year
800.000
1.000.000
Standard costs:
Thermal energy*
std CC (U$S/año)
30
25
20
15
10
5
0
0
200.000
400.000
600.000
800.000
1.000.000
ton/año
ton/year
*Note: In all cases, a 5,000-meter gas pipeline has been considered
Standard costs:
Electric power
std CC (U$S/ton)
60
50
40
30
20
10
0
0
200.000
400.000
600.000
ton/año
ton/year
800.000
1.000.000
Economic
indicators
From standardized costs
Other parameters taken
into account
 CERs transaction costs (US$ 85,000)
 JE CDM verification costs (US$ 5,000/year for
21 years)
 Base sale price of electric power (0.0126
US$/kWh)
 Base sale price of gas (0.0005 US$/MJ)
 Base sale price of CERs (US$ 5)
 Discount rate (15% annual)
 Useful life of the project (21 years)
Torch combustion
2,000,000
Costo de
Capital
capital
Cost
1,600,000
1,400,000
1,200,000
1,000,000
Costo de
O&M
OyM
Costs
800,000
600,000
400,000
200,000
miles de ton/año
mton/year
500
450
400
350
300
250
200
150
100
0
50
y OyM
capitalCosts
Costos
Capital
andde
O&M
1,800,000
Torch combustion
TIRF vs ton/year and CER
25%
20%
CER=U$S 5
TIRF
15%
10%
CER=U$S 6
5%
CER=U$S 7
0%
CER=U$S 8
-5%
-10%
0
100
200
300
400
mton/year
m
iles de ton/año
500
600
Thermal energy production
2,500,000
0.0030
Cost
0.0020
1,500,000
0.0015
1,000,000
0.0010
500,000
0.0005
mton/year
miles
de ton/año
500
450
400
350
300
250
200
150
0.0000
100
0
COE US$/MJ
0.0025
2,000,000
50
O&M and
y OyM
capital Costs
deCapital
Costos
Costo de
Capital
capital
Costo
O&Mde
OyM
Cost
COE
Thermal energy production
TIRF vs ton/year and CER
30%
TIRF
20%
10%
CER=U$S 0
0%
CER=U$S 5
-10%
CER=U$S 6
-20%
CER=U$S 7
-30%
CER=U$S 8
-40%
0
100
200
300
400
mton/year
m iles de ton/año
500
600
Thermal energy production
TIRF vs ton/year and MJ value
Thermaltérmica
Energy
Energía
35%
30%
25%
0.0005 U$S/MJ
TIRF
20%
15%
0.0015 U$S/MJ
10%
0.0020 U$S/MJ
5%
0%
0.0030 U$S/MJ
-5%
-10%
0
100
200
300
400
m iles de ton/año
mton/year
500
600
Generation of electric
power
0.060
0
0.000
miles
de ton/año
mton/year
Costo
de
Capital
capital
Cost
COE US$/kWh
0.010
500
1,000,000
450
0.020
400
2,000,000
350
0.030
300
3,000,000
250
0.040
200
4,000,000
150
0.050
100
5,000,000
50
y OyM
capital
Costos
Costs
Capital
andde
O&M
6,000,000
Costo
O&M de
OyM
Cost
COE
Generation of electric
power
TIRF vs ton/year and CER
10%
5%
CER=U$S 0
0%
TIRF
CER=U$S 5
-5%
CER=U$S 6
-10%
CER=U$S 7
-15%
CER=U$S 8
-20%
-25%
0
100
200
300
400
mton/year
miles de ton/año
500
600
Generation of electric
power
TIRF vs ton/year and kWh value
Generación
eléctrica
Electric Generation
25%
20%
0.0126 U$S/kWh
TIRF
15%
10%
0.020 U$S/kWh
5%
0.040 U$S/kWh
0%
-5%
0.060 U$S/kWh
-10%
-15%
0
100
200
300
400
mton/year
miles
de ton/año
500
600
Compared
alternatives (I)
CER=U$S 5
0.0126 U$S/kWh
0.0005 U$S/MJ
15,00%
10,00%
Torch
Combustión
Combustion
en antorcha
TIRF
5,00%
Energía
Thermal
Energy
térmica
0,00%
-5,00%
Energía
Electric
Power
eléctrica
-10,00%
-15,00%
0
100
200
300
400
mton/year
miles de ton/año
500
600
Compared
alternatives (II)
CER=U$S 5
0.040 U$S/kWh
0.002 U$S/MJ
25,00%
20,00%
Torch
Combustión
Combustion
en antorcha
TIRF
15,00%
10,00%
Energía
Thermal
térmica
Energy
5,00%
0,00%
Energía
Electric
Power
eléctrica
-5,00%
-10,00%
0
100
200
300
400
mton/year
m iles de ton/año
500
600
Concluding Remarks

Cost standardization is a useful tool for conducting pilot studies of capture
projects and usage of LFG.

For electric generation projects, only projects over 350,000 ton per year are
economically feasible for the present kWh values and CER values of US$ 5.
This value is reduced to 70,000 ton per year for values of 0.04 US$/kWh and
to 150,000 ton per year for CER values of US$ 8
Thermal energy production projects start being economically feasible from
100,000 ton per year for present gas and CER values.
In this context, combustion of captured biogas (without energy recovery) is
the most sustainable alternative for projects under 100,000 tons per year and
CER values of U$S 5/ton CO2e.
In order for the electric power production to be feasible in small projects
(under 100,000 ton per year) kWh either values over US$ 0.04 or CER values
over US$ 8 are required.




The commercialization of Certified Emission Reductions can make the
economic gap reduce considerably, even though for small and medium-scale
projects commercialization CER values over U$S 8 per ton CO2e are
required.
Facultad de Ingeniería
Universidad Nacional del Centro de
la Provincia de Buenos Aires
Gabriel Blanco, Estela Santalla
Av. Del Valle 5737
(7400) Olavarría
Argentina
TE / Fax: 54-2284-451055
[email protected]
[email protected]