Whitefish, MT / October 30, 2014 / Wastewater treatment plants (WWTPs) are a conundrum of sorts as they are critical to public health, but energy intensive, making them expensive and often bad for the environment because of greenhouse gases and criteria pollutants that are created in the treatment processes. These plants account for up to 4 percent of the energy used in the U.S. with about 25% of total operating costs of a WWTP stemming from electrical requirements because of the constant demand in the complex treatment process. The range of pollutants are wide, considering that not only do WWTPs plugged in to the electricity grid contribute to pollution related to traditional energy generation at power stations, but also the treatment process itself can generate a variety of pollutants, including nitrous oxide, which has a 300-fold stronger effect than carbon dioxide. The growing emphasis on renewable and alternative energies and government mandates to reduce emissions has companies and municipalities searching for solutions to save money and meet environmental initiatives.
According to the American Biomass Council, there are about 1,500 of the 3,500 major WWTPs operating anaerobic digesters. Anaerobic digestion is a process where naturally occurring bacteria break down waste in an oxygen-free environment, converting it to biogas and inorganic fertilizer. This biogas usually contains about 60%-70% methane, 30%-40% carbon dioxide and trace amounts of other gases. Most of those WWTPs don't use the biogas that is created, though; they flare it, which produces another pollutant, nitric oxide. According to the Environmental Protection Agency, biogas systems were being used at 104 WWTPs in 2011, but were technically feasible at 1,351 additional sites and economically attractive, meaning a payback on investment within seven years, at up to 662 of those sites.
Rather than flaring the biogas, some WWTPs are now employing Combined Heat and Power (CHP, cogeneration) strategies as a means of making their own energy on-site, lowering operational costs and cutting pollution. CHP systems are built upon the premise of generating two types of energy from a single source (i.e. natural gas, propane, biogas), capturing waste energy in electricity generation and repurposing it for other energy needs, thus maximizing efficiency and minimizing pollutants by displacing utility grid power. Companies like Clarke Energy, an authorized distributor and service partner for General Electric Power & Water (NYSE: GE), FuelCell Energy (NASDAQ: FCEL) and Tecogen (NASDAQ: TGEN) are leading players in the space.
FuelCell Energy, a designer, manufacturer and operator of ultra-clean fuel cell power plants, points out on its website the tremendous waste of source fuel happening today at WWTPs. The company notes that the 90 percent of large-scale WWTPs in the U.S. that don't use the biogas created are "literally flushing almost 1,500 MW of renewable fuel cell energy down the drain, which could be used to power over 1.2 million homes." To add a little more color as to just how much digester gas is produced at a large WWTP, the Fountain Valley WWTP and Huntington Beach WWTP that are part of the Orange Country Sanitation District in California together produced 1.4 billion cubic feet of digester gas from anaerobic digestion in 2013.
As the company explains, Direct FuelCell(R) (DFC(R)) power plants combine fuels such as natural gas or biogas with oxygen from the ambient air to efficiently generate power electrochemically, reducing nitrogen oxide, sulfur dioxide and particulate matter emissions to near nil. The DFC(R) stationary fuel cell power plants utilize carbonate fuel cell technology and provide continuous power where the power is used, including both on-site applications and electric grid support. This technology creates a "loop" in the WWTP system. The methane is used to generate electricity, with the heat from the fuel cell captured and used to heat the sludge in the anaerobic digester to facilitate the digestion process, which creates more methane, and so on.
With internal combustion engines (which can also be fueled with biogas) at the core of a CHP system, the process is similar, with a portion of the heat from the engine captured and repurposed to heat the sludge, for power aeration air, for pumping equipment and more. In most cases, WWTP are required to have a back-up fuel source readily available, as downtime is not an option.
Tecogen is a technology company with a particular expertise in cogeneration systems. The company manufactures, sells and services high efficiency, ultra-clean CHP products, including natural gas engine-driven cogeneration, air conditioning systems, and high-efficiency water heaters for industrial and commercial use. Business has been steady, with Tecogen disclosing a series of new orders in October taking its backlog of orders to around $15 million. In the last two weeks, a third Tecochill® natural gas-powered chiller was sold to a major US-headquartered manufacturer of home fixtures for a retrofit of its existing plant in Reynosa, Tamaulipas, Mexico. Tecogen also sold three of its InVerde(R) INV-100 Ultra CHP units to a major museum on the west side of Manhattan and signed a long-term service agreement to maintain them. The units will reduce energy costs and cut criteria pollutants to near-zero levels while slashing the museum's annual carbon output by more than 1,461 tons of CO2.
In addition to its CHP sales, Tecogen has developed and sells "Ultra," a brand-agnostic retrofit emission reduction system for CHP systems. The Ultra system widens the air-fuel control window by nearly four times and can nearly eliminate NOx and criteria pollutants without the need for complex additional controls or frequent maintenance.
With respect to WWTPs, the Ultra system poses a new solution to the old problem of erratic emission control. The bottom line is that while many studies have shown the benefits of CHP at WWTPs, it's not without its challenges to further reliably reduce emissions, as spikes in the criteria pollutants nitrogen oxide and carbon monoxide are commonplace. California, always a trendsetter for controlling pollutants, is vetting processes to control the release of greenhouse gases and criteria pollutants at WWTPs as part of meeting a goal to add more than 10,000 MW of CHP capacity by 2030 (including 4,000 MW by 2020), reducing NOx emissions by 65% over the next 10 years and reducing CO2 equivalent by 6.7 million metric tons by 2020. The California Energy Commission, in partnership with the U.S. Department of Energy, is conducting a trial at the Eastern Municipal Water District (EMWD) in Perris, California on Tecogen's Ultra technology to control digester emissions from a Caterpillar (NYSE: CAT) engine, with the goal to consistently maintain NOx gas below 11 ppm and carbon emissions below 250 ppm. Since the beginning of the trial in August 2013, the data through March of 2014 shows the Tecogen technology to hold these key pollutants beneath desired levels on a continuous basis.
The Ultra system was previously only available only for select rich-burn natural gas engines – which dominate the CHP market at WWTPs – but that has now been expanded with the sale of an Ultra system to the aforementioned EMWD in Southern California. The system will be a larger scale version of Ultra, this time applied to a 48-liter engine to be fueled by biogas extracted from an anaerobic digester at the District's Moreno Valley Regional Water Reclamation Facility. This will be the first time the Ultra system has been utilized for a biogas (or biofuel) application.
Incidentally, Tecogen reported another milestone on October 23 with the sale of an Ultra system to a Fortune 500 industrial customer for application to a natural gas emergency generator, marking Tecogen's first foray into the emergency power market. The plans are to retrofit one of the customer's systems for testing at Tecogen's factory and if performance specs are met, retrofit other generators operating at the customer's Southern California facility.
The vertical move to support biogas CHP units in addition to natural gas units comes at an opportune time for Tecogen as California is in the midst of tightening emission regulations on digester gas, which is going to force change by operators. By 2016, the South Coast Air Quality Management District (SCAQMD) Rule 1110.2 will mandate that biogas engines in Southern California operate at the more stringent pollution standards already in place for natural gas engines. California has incentivized its businesses, including WWTPs, to make the switch to alternative energies through several programs, including the Self-Generation Incentive Program (SGIP). SGIP offers cash incentives for the installation of clean and efficient distributed generation technologies installed on the customer's side of the utility meter, creating an opportunity for companies in the fuel cell and CHP business, as well as Tecogen's novel technology for emission reduction. From a broader view, bringing these technologies to more commercial applications within the WWTP business will likely serve as a major step in the right direction for horizontal expansion, such as backup schemes for remote power stations in the future. In the meantime, CHP is an attractive solution for WWTPs to lower costs, reduce grid dependence and curb emissions.
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