TAMRMS#: B06
8.2
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Waste to Energy
Presented by: Regan Lefebvre, Senior Manager of Utilities
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RECOMMENDED MOTIONS
recommendation
1. That the following motion AR-19-402 passed by Council on November 18, 2019 be rescinded:
That the Project Charter entitled “Pilot Scale Waste to Energy”, provided as a confidential attachment to the November 18, 2019 agenda report entitled “Waste to Energy”, is approved, conditional of 75% funding from third party sources and contingent on acceptable agreements being executed; and that the proposed budget be funded by a commitment of a maximum of $1,000,000 from the Stabilization Reserve
2. That Project 419762, "Pilot Scale Waste to Energy" be closed and the unused funds be uncommitted within the Stabilization Reserve.
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PURPOSE OF REPORT
The purpose of this report is to provide an update on the Pilot scale Waste to Energy project and to present a recommendation for Council’s consideration to close the project and allow allocated funds to become uncommitted.
ALIGNMENT TO PRIORITIES IN COUNCIL’S STRATEGIC PLAN
Strategic Priority #2: Economic Development: Enhance business/commercial growth.
Strategic Priority #4: Infrastructure Investment: Identify and build needed capital assets.
Strategic Priority #6: Environmental Stewardship: Explore innovative environmental and conservation opportunities.
ALIGNMENT TO LEVELS OF SERVICE DELIVERY
N/A
ALIGNMENT TO COUNCIL DIRECTION OR MANDATORY STATUTORY PROVISION
On November 18, 2019, Council passed the following motion (AR-19-402):
That the Project Charter entitled “Pilot Scale Waste to Energy”, provided as a confidential attachment to the November 18, 2019 agenda report entitled “Waste to Energy”, is approved, conditional of 75% funding from third party sources and contingent on acceptable agreements being executed; and
That the proposed budget be funded by a commitment of a maximum of $1,000,000 from the Stabilization Reserve.
BACKGROUND AND DISCUSSION
This project, for the design and construction of a temporary gasification facility to evaluate waste to energy as a landfill diversion alternative for St. Albert's municipal solid waste (MSW or brown bin waste), originally received conditional approval from Council on November 18, 2019 (AR-19-402). The budget of $1,000,000 from the Stabilization Reserve was conditional upon 75% funding from third party sources and contingent upon acceptable agreements being executed.
In October of 2019, following an RFP for a pilot scale waste to energy plant, the successful proponent was the team of ONEC Construction, Sureway Construction and IQ Energy. The ONEC Team provided a lump sum price to construct a thermal gasification unit and decommission it after one year of operation. The excess heat would be wasted during the pilot but could be utilized by neighbouring buildings at a commercial scale facility. The excess syngas would be wasted during the pilot but could be utilized to produce RNG or electricity at a commercial scale facility. IQ Energy projected that the remaining glass, metal and ash/char could be sorted and separated and recycled with a projected 90% landfill diversion rate. The proposal was dated October 15, 2019 and was valid for 90 days.
Including incidental costs, Administration projected a cost of ~$4,200,000 to commission a one year pilot for this technology.
Administration investigated numerous grant programs and applied for four grants. Three of these applications were unsuccessful (the fourth with FCM is on hold pending additional information). Feedback received was that Waste to Energy is not a provincial or federal priority for grant funding and the temporary nature of the project also made it less of a match for grant programs.
Administration approached several other municipalities in the Edmonton region to partner on the project. Support was expressed and the City of Edmonton offered $150,000 of land space, office space and utilities at the Edmonton Waste Management Centre as an "in kind" contribution. However, no other municipality has offered to contribute funds towards the project.
To date, $55,831.00 has been spent on design and permitting. The design builder completed a 60% design and all applicable City of Edmonton permits have been obtained.
As a result of policy work by the EMRB under the Solid Waste Collective and recent discussions amongst municipalities within the region, there was renewed interest from regional partners in possibly participating in the pilot program. This was discussed at a meeting of regional CAOs on December 21, 2021. However, none of the renewed interest is anticipated to result in additional financial commitments without a substantial business case.
Assuming the pilot scale waste to energy project was capable of lasting 25 years with the same capital costs along with estimates for manpower, utilities, residuals disposal and current financing rates available to the City of St. Albert, the projected costs to process 2,000 tonnes of waste per year would be would approximately 5.5 times the current rate to dispose at landfill (with a range of 5.3 to 5.9 times the current cost). It is not expected to be economical for a facility of this size to capture the waste heat or syngas (for use as renewable natural gas, green fuel or electricity).
Extrapolating these costs with reasonable estimates for economies of scale, the projected costs for a City of St. Albert-scale facility processing 8,000 tonnes of waste per year (almost all of St. Albert’s brown bin waste) would be approximately 3.5 times the current cost to dispose at landfill (with a range of 3.3 to 3.9 times the current cost). At a facility of this size, it is still assumed that it is not economical to capture the waste heat or syngas (for use as renewable natural gas, green fuel or electricity).
Further extrapolating these costs for a regional scale facility able to process 50,000 tonnes of waste per year, the relative cost becomes approximately 1.6 times the current cost to dispose at landfill (with a range of 1.2 to 2.0 times the current cost). At a facility of this size, it is assumed that there would be a net benefit to capture the syngas (for use as renewable natural gas, green fuel or electricity). The beneficial re-use of capturing waste heat for neighbouring facilities would be expected to require additional capital investment and operational costs that would nullify the potential financial benefits, unless neighbouring facilities have considerable heating needs (ideally year-round) that would provide significant economies of scale.
The above costs for a regional scale facility are not meant to be taken as an accurate cost estimate on the financial viability of a waste to energy facility. This is simply an extrapolation using broad assumptions to demonstrate the approximate scale of a facility that would be needed before gasification or pyrolysis technologies would have the economies of scale to become potentially financially viable. Additional detailed analysis would be needed.
In addition, the above cost analysis does not take into consideration risks, such as:
• Production challenges (gasification facility can face considerable production challenges and downtime), or
• Premature failure of the facility before 25 years (City of Edmonton’s composter facility was expected to last 30 years and was demolished after only 17 years)
Gasification and pyrolysis are being considered as technologies for the future of waste because they are preferable to incineration and direct landfilling. However, facilities using these technologies need to be very large in order to achieve the construction, operations, and beneficial usage economies of scale needed to be considered cost comparable with direct landfilling. Even with grants, these are not technologies that the City of St. Albert can expect to make financially viable without additional partners, likely a regional partnership.
It is recommended that the "Pilot Scale Waste to Energy" project be closed. However, Administration expects to continue to investigate the potential for gasification and pyrolysis technologies at the regional level, such as the EMRB, as it is expected that they will eventually become a technically and financially viable alternative to direct landfilling.
STAKEHOLDER COMMUNICATIONS OR ENGAGEMENT
Notification would be provided to the design builder, the City of Edmonton and FCM.
Administration will continue to engage with potential technology providers and other regional municipalities on an educational basis to be prepared for the eventual viability of these technologies on a regional scale.
IMPLICATIONS OF RECOMMENDATION(S)
Financial: No further costs would be charged to the project and the remaining balance would be uncommitted within the reserve.
Legal / Risk: N/A
Program or Service: N/A
Organizational: The Pilot Scale Waste to Energy project would be closed.
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1
Revisit the Pilot Scale Waste to Energy Project with updated costs and a revised schedule from the vendor with plans for the City of St. Albert to proceed with the pilot with only the committed support from the City of Edmonton (no additional external funding towards the $4.2M expected cost)
Implication: This recommendation is expected to require a commitment by the City of St. Albert of at least $4.05M (capital costs would need to be renegotiated with vendor). The only benefits would be data results from the pilot that would only be useful if St. Albert were contemplating a regional scale facility with partners.
Alternative 2
Consider a competitive procurement for the use of an active demonstration facility, rather than a pilot, that St. Albert could utilize to gather similar data on the potential for St. Albert MSW to be for gasification and/or pyrolysis technology.
Implication: The data from the use of an demonstration facility would only be useful if St. Albert were contemplating a regional scale facility with partners. At this time, gasification and pyrolysis do not yet appear to cost competitive enough in comparison to landfilling to gather regional support.
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Report Date: January 31, 2022
Author: Regan Lefebvre
Department: Public Operations (Utilities)
Deputy Chief Administrative Officer (Interim): Diane McMordie
Chief Administrative Officer (Iterim): Kerry Hilts